Ladies and gentlemen, good day and welcome to the Torrent Pharmaceuticals Q3 FY 2023 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 and then 0 on your touch-tone telephone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhir Menon. Thank you, and over to you, sir. Thank you. Good evening and welcome to quarter three FY 2023 earnings call. Quarter three registered revenue growth of 18%, led by strong growth in the branded generic markets and steady performance of the generic markets. Branded generic markets constituted 70% of the total revenue base. The growth in the branded generic markets were primarily driven by new launch momentum, performance of the top brands and integration of acquired portfolio. In terms of financial performance during the quarter, the revenues were INR 2,491 crores, up by 18% on year-over-year basis. Operating EBITDA was INR 724 crores with operating EBITDA margins at 29.1%. There is a one-off impact on gross margins by around 0.6% for the quarter due to under absorption of manufacturing costs as there was a temporary stoppage of manufacturing in the month of October for around 15-20 days for carrying out cleaning validation of certain equipments as a follow-up to the US FDA audit. Today the board of directors has approved an interim dividend of INR 14 per share. With this, I would request Aman to give you some insights from India business. Thanks, Sudhir. India revenues at INR 1,259 crores grew by 17% and included revenues from the integration of Curatio Healthcare. As per the AIOCD dataset, Torrent's growth in Q3 was at 12% in line with the IPM growth of 12%. Our growth was aided by new launch performance, particularly in the chronic segment, performance of our top brands and strong growth of the Curatio portfolio. At the end of the quarter, Torrent has 19 brands in the top 500 of the IPM, with 13 brands now more than INR 100 crore sales as of December 2022. Our field force has been further expanded, and MR strength now stands at 5,300. This is inclusive of the Curatio divisions. Our base business MR strength stands at 4,700, which has also been expanded in the current quarter. For YTD December FY 2023, revenues were INR 3,728 crore, up by 15%. We expect the India business to continue its growth momentum backed by new launch performance, top brand performance, increase in field force productivity of the expanded field force and continued performance of the acquired portfolio of Curatio Healthcare. I'll now hand over to Mr. Sanjay Gupta for the international business. Thanks, Aman. Let's start with our biggest branded generic business outside of India, which is Brazil. Brazil revenue was at INR 248 crores, up by 36% on a YOY basis. Constant currency revenue was at BRL 159 million, was up by 17%. As per secondary dataset, Torrent's growth is 19% versus a branded generic market growth of 13% for the quarter ending November 2022. On a NAP December 2022 basis, Torrent's growth is at 15% versus a BGX market growth of 12%. Strong contribution to growth has come from our CNS franchise and the generic business, which now contributes about 14% to our Brazilian revenues. We have launched six products in the last 12 months. The two biggest markets are for desvenlafaxine and rivaroxaban, where our market share in prescriptions in the month of December is at 8% for desvenlafaxine and 9% for rivaroxaban. Our plans to increase our coverage of CNS in cardio markets from the current 19% to 25% by 2025 are on track. This year we have received seven approvals. There are 10 products pending approval with Anvisa, and we would be filing an additional 10+ products before the end of this fiscal year. IQVIA projects a retail market growth of 11% in 2023 and 2024, and we should be growing at a rate higher than this. Moving on to Germany. Our German revenues were INR 241 crores, up by 1% on a YOY basis. Constant currency revenue were at EUR 29 million, up by 4%. We have started growing again, thanks to the start of business of some new tenders that were won earlier in the year, as well as four new launches in Q3. For the coming year, we anticipate single-digit growth coming from tender wins, some of which have been realized already. In 2022-23, we would have launched more than 10 new products in Germany. The new products help us compensate the pricing pressures due to increased competition in the market. On the US side, US revenues were at INR 291 crores, were up by 24%. Constant currency revenue was at $55 million, up by 13%. We have received OAI classification for our Indrad facility. For Da and the Indrad facility, we continue to wait for the US FDA inspection. Future outlook of the US business is linked to our ability to get new products on the market. We expect to file about five to six products in the current fiscal year. As of December 31, 2022, 48 ANDAs are pending approval with the US FDA. To conclude, while the BGX markets shall continue to lead the growth, Germany shall continue to witness steady sequential recovery. For the Indrad facility, we are actively engaged with the regulator for resolution of issues at their earliest. Operator, we can now open the call for Q&A please. Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star 2. Participants are requested to use handsets while asking a question. Anyone who has a question may enter star 1. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Saion Mukherjee from Nomura Securities. Please go ahead. Yeah, hi, good evening. Sir, can you know, indicate the growth without Curatio? What is the organic growth for India in this quarter? The base business growth is 12%, and the reported growth that we have is 17%, so the remainder 5% is coming from Curatio. Okay, thank you. On the, you know, Indrad facility, is there any communication, you know, that you received from the FDA? What's your outlook there in terms of, you know, timeline? If you can indicate what's the level of contribution from that side to the overall revenues. What we have received is a letter stating the status of the facility as OAI. The agency kind of will take some official action in a time period of 45-90 days from the date of the letter, which was day before yesterday. The official action ranges from a regulatory meeting or a warning letter or something of that sort. We shall wait for them to decide before committing further. An Indrad revenue contribution is... We haven't disclosed the revenue by plant so far, right? Correct. Correct. We, at time, maybe, I can come back to you on that. Okay. Okay. Thank you. Thank you. We'll take our next question from the line of Damayanti Kerai from HSBC. Please go ahead. Hi, thank you for the opportunity. First on India, can you split the base India growth into volume, price and new launches contribution? Related question is what I understand a price increase has been the significant driver for India sales this year. From this high base of price increase, how should we see growth scenario in coming year? The AIOCD growth is 12% for Torrent in Q3. Out of that, volume is 0.2, price is 8.1 and new products is 3.5. This 8.1 is against 7% of the market price growth. It's pretty much in line with the market growth. We think this range will continue. This has been pretty much our MAT range for price increase. We think next few quarters also this should continue. Okay. Coming quarters also, 7%-8% price increase is your range, right? That's right. That's right. Okay. On the new launches, can you comment on some of the key launches which have supported this 3.5% contribution? I think in the past we have roughly up to 2.5% contribution from new products. Yeah. The new launch contribution is calculated on a trailing 24-month basis. In this period we have launched a relatively high number of brands in the chronic segment. Recently the launch has been of Sitagliptin, as shared last quarter, where we continue to be the number 1 franchise of the newly launched brands. We should be doing roughly around INR 4.8-5 crores a month based on AIOCD. This is strengthening our market share in diabetes. Similarly, in CNS we had launches this time last year in the Pregabalin franchise, which continue to do quite well and remained the number 1 market share. These are the key three, four launches that are adding the incremental new product growth. Okay. That's helpful. Second is Curatio integration. Can you talk about the progress which you have done since integrating the portfolio to your India business? You mentioned you have a separate team and then you have added on people, et cetera. A few more color would be helpful. The business is on track. It's been two and a half months in the quarter that we've got the sales from Curatio. October 14th is when we had integrated. Two and a half months of sales in Q3. Pretty much continuing the same division, same strength in the business. We have started realizing synergies on the cost front in distribution where there were overlapping cost, let's say, distribution and CFA warehouse setup, which has all been merged, and some back-end functions which were overlapping. This synergy has started playing out. I think about 3% to 4% margin improvement is already seen in the first quarter. Top line delivery continues as per the ongoing performance. We think this should sustain. I would say better to wait another quarter at least, Q4, once we have the entire quarter under our performance, we can share further insights into the performance of Curatio. Okay. That's helpful. My second question is on Germany. You mentioned now the supply has started for the new tender. This tender is for, What period? Do you anticipate any more tenders coming in, say, next, two or three quarters? In Germany how it works is the tender duration is two months, and usually you win some tenders and they start six months later. What happens is that the Q3 increase in sales we flagged a few months ago and saying that we had tenders which would start in Q3. Subsequently, each quarter we win a few tenders and which is what has led me to tell you that we expect single digit growth next year. Okay, that's helpful. Thank you. All the best and get back in touch. Thank you. Thank you. Our next question is from the line of Sumit Gupta from Motilal Oswal Securities. Please go ahead. Hi, good evening. Just want to know on the price revision update on the U.S. markets. What kind of? Mr. Sumit, sorry to interrupt. If you're in a hands-free mode, can you switch to handset and speak? Your audio is not very clear. Hello? Yeah, better. Okay. Thank you, sir. I just want to know on the price revision update in the U.S. markets. What kind of trajectory that you are seeing? Year-on-year, we are seeing high single digits. Okay. Okay. What is the capacity utilization overall? Overall, it depends upon the plant. Baddi is a multi-country plant, right? Much more than The Hague. Baddi capacity utilization is in the high 70s. For The Hague we are more in the mid-50s, 55, 56% range. Okay, wonderful. Thank you. Thank you. Our next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, thank you for taking my question. Just, again, focusing back on the Curatio acquisition, right? You talked about costs and synergies, but, I remember in our, you know, acquisition call, we talked about revenue as well. At some point of time, we look at the top five brands, Tedibar, Atogla, to all of that, and to see where they are priced with respect to market, and if necessary, take price increases. Is that something that we... It's early to comment about that, or we think we have selectively started doing that as well? That's also started. Already one round of price increase, which was already taken before the acquisition. That was to offset the increased raw material cost. That has been reflected, and that new stock will be on the market in this quarter, so that should also start reflecting. Otherwise, I mean, revenue, Curatio revenue growth was about 20% for the quarter, the Curatio standalone. The growth is pretty much on track. Sir, I thought, you know, we were expecting to go faster related to that segment, right? Maybe it's too early days for the two and a half months, you think, for this 20% growth? I was under the impression that, you know, the segment is growing maybe 20% and Curatio is probably growing faster. I think, the segment that we specifically are covering, which is the prescription-based PDL, this is significantly faster than that. Either case, next quarter should give a better picture. I think this, mid to high teens growth is something that we feel is sustainable, for this portfolio. Rest will be the levers that we mentioned earlier, which should start playing out probably by end of, the next financial year. Got it. Very helpful. We're on the financial side. What is the kind of debt position now after the deal? If you could just reiterate some of the cash flow numbers that we are generating and how we plan to kind of reduce debt over time. Yeah. Shyam, I think by 31st March 2023, the net debt position should be around, INR 4,300. Mm-hmm. As per the repayment schedule, next year we should be repaying roughly INR 1,200. Probably in FY 2025, a major chunk of the cash flow will get allocated towards the prepayments of all these loans. Got it. Largely some internal records, right? Essentially we are going to divert. What about CapEx? Sorry, I think that's the other question I had. Okay. Of course you're gonna repay. What is the rest of the operating cash flows going towards? Right. Roughly you can say the EBITDA should be close to around INR 3,000, let's say. Mm-hmm. Which, the conversion to operating cash flow should be 80%, which is INR 2,400. Mm-hmm. CapEx over the next three years on an average should not be more than INR 250, max INR 300, I would say, per annum. Got it. Thank you. Have a good day. Thank you. Our next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Hi, good evening. Thanks for the opportunity. Just trying to understand gross margin better. Q2 gross margin is a little down versus 2Q, while our higher gross margin business, India and Brazil, have done really well. Can you explain that? Prakash, I don't know if you've heard the opening speech where I had explained. Sorry. What I said is, there's a one-time impact of gross margin by 0.6% for the quarter, and which is primarily because of under absorption of the manufacturing overheads in the month of October. Wherein immediately after the USFDA audit, which ended on 28th of September, there had to be some cleaning validation of certain equipments, which had to be done as a follow-up to the USFDA audit. Because of that, there has been a under absorption of overhead, which has impacted the gross margin by 0.6%. Any other reason? I mean, because Brazil also done fairly well, which is a higher gross margin business. No, no other reason, Prakash. This is only one time impact, which we have seen. What do you attribute this Indrad facility, you know, the 483 has come again and now the OAI, it had warning letter status earlier. So, and we've seen other facilities where other companies also seeing, you know, observations coming back. I mean, it's been three, four years now. What's really, you know, that as a company or as an industry, we are missing it. You're right, Aman. As far as this recent OAI is concerned, we are still working on it, right? I mean, trying to get in touch with the US FDA to understand better. It will take couple of weeks, I would say, for us to get a better hang of what would be the next thing which we should be looking at. Maybe, post one to two weeks, we'll have a better clarity to give you some feedback on that. Okay. And one more for you on the interest cost side. You mentioned INR 3,000 crores in debt with 80% conversion. you know, the debt repayment should be much higher than the INR 1,200 crores you talked about, or how do you think it, you know? That's a conservative number or it's a realistic number? It's a scheduled repayment which is there for the next year. I agree, yeah. I mean, if there's additional cash which is there on the balance sheet, it will be used for prepayment of the loans to the extent whatever is possible. I was saying was even if I take a scheduled repayment, which is happening next year of INR 1,200 crores, that should end most of my previous acquisition funding. Therefore, FY 2025, whatever cash flows are getting generated, considering the growth over the next two years, most of that can be allocated for prepayment of Curatio loans. Okay, thank you. Lastly for the, you know, if you can also give some color on the market formation of sacubitril valsartan. Understand not many players have come in, or it's too crowded as we're seeing in other diabetes products like Vilda, Sita, et cetera. Or still market is getting formed? The market is still getting formed. I think the matter is still sub judice, would want to wait till this little further clarity. Okay. You expect that in next three, six months? Should be. Hopefully within this next six months. Okay, great. Thank you so much. Thank you. Our next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Hi, thanks for taking my question. On the other of the markets, there's been a pretty strong growth in this quarter, INR 290 crore or so INR 240-250 crore you've been doing. Any particular drivers for this growth in the quarter? I don't think, Nitin. It's been quite a good quarter, I would say. There are one or two geographies where there were some incremental opportunities which were seen which we were able to take it. That's the reason for ROW the growth is little higher. Otherwise, even a country like Mexico is doing fine, I would say, growing double digit for almost last four to five quarters. heights high double digit. Yes, I mean, to a certain extent, there was some incremental opportunity which had come in quarter three, in I would say Russia, basically, which has helped in getting such a strong growth. This shouldn't be... We should not take this as a base to model the solid numbers on the side. No, Russia is a very small market for us, Nitin. Okay. Although there's, yes, I mean, possibly 1% or 2% contribution to the overall incremental growth, but not major, I would say. Can this 290, can you take it as the calls are up, can you take the 290 as a base for the business or from a modeling perspective? Nitin, it's a little difficult for me to give any guidance on that. Maybe two quarters or three quarters, if that number is sustaining, then possibly I can confirm that. I think it's better to wait for one more quarter to see whether this number is sustaining. Okay. Nothing as of now which can indicate that this can go up or down now, so. Okay. Gotcha. Maybe on the Curatio costs, on H&A and staff costs, I mean, we've built in only one and a half months of these costs, right? Some more costs we should consider in for next quarter? No, it's almost two and a half months, which has been factored. Okay. Not major, even if you take a full quarter, I would say. Okay. Actually can this overfront be largely now and all the costs are basically the base? I would think so. Lastly on Brazil, it's been mentioned that, you know, the market growth now guided to about 10% for the next couple of years. Is that correct? Yeah. IMS projects generally next five years, 8%-12% growth. Next two years is projected at 11%. Okay. Given the fact that we are in the process of launching multiple new products, we should be in a position to constantly outpace the market. Correct. We have three growth drivers. Essentially, last one year, we've increased the number of CNS reps. That has given a good momentum to our CNS franchise. Genex business is doing very well. Thirdly, the new launches. What proportion of the business is derived right now from the new launch in Brazil? Fourteen. 14%? Yeah. Okay. Thank you. Thanks. Thank you. A reminder to our participants, if you wish to ask a question, you may enter star and one. We'll take our next question from the line of Neha Manpuria from Bank of America. Please go ahead. Thanks for taking my question. Sandhu, on the Brazil business, we saw, you know, a good, step-up in this quarter. I, you know, I heard the comment that you mentioned, but it's fair to assume that there is, you know, this number is sustainable and as we launch new products, we should continue to see growth in this space? Neha, the previous two quarters local currency growth had been 8%, and essentially that growth was on the lower side, but IMS was showing this mid-teens growth, which is the underlying growth of the business. Q1 is, in Brazil generally gets impacted because of Q4. You know, there's overstocking from the wholesalers. Q4 of last year was showing a growth of 21%. Yeah, Q1 is a little bit impacted number. Q2 we had some shelf stock adjustments because of which primary sales were on the lower side, but IMS sales continued in mid-teens. I would say that double digit, you know, north of 10%, to is given the market growth and we should be reasonably higher. I would tell you that it looks like this is the trend. Understood. Did I hear correctly that you are planning to file 10 more products by the end of fiscal 2022? We would file a total of 10 plus products in this fiscal year. Oh, okay. The 10 pending, this includes part of the filings, right? It includes. No, the 10 we have as of today. Okay. Okay. Understood. By the end you'll have probably 20 products pending for approval. Yeah. I would say at least 16 to 17 products, maybe 20. Okay. By when should we start seeing commercialization? Is it anywhere from approval timeline now like in Brazil? Has it improved? Yeah, yeah, yeah. It's usually now 24 months. What you would see is five, at least... It's quite heavy to launch branded generics. I think what you would see generally is 4-6 products a year. Okay. Understood. Okay. Fair enough. Thank you so much. Thanks. Thank you. A reminder to our participants, if you wish to ask a question, you may enter star and one. We take the next question from the line of Krishnendu Saha from Quantum Mutual Fund. Please go ahead. Hi. Thanks for taking my question. Just understanding the 24% growth in the U.S. is mostly from the third party filings, is it? No, no. This growth is because of base impact. If you go back to the same period last year, the sales were on the lower side, $31 million. While generally for the last year, I would say six, seven quarters our sales have been $35 million. That particular dip in the same period last year is what results in the percentage growth this year. I see. May I know how many products do we have in the market actually? In that, so we sell about 55 products. 55. products in the- Mr. Saha, I'm sorry to interrupt, but your audio is not very clear. Could you repeat your question? Can you hear me now? Yes. Can you hear me now? Yes, sir. How many products do you have in Brazil itself? In Brazil we have about 22 products. Sir, did you get my answer? It's about 22. Mr. Saha, are you still there? Hello? Hello? Yes. I answered your question and we have about 22 products. Yeah, yeah, I got that. Thank you. Thank you. Just on the digital front, how much of our revenue will be on the OTC front in India right now? Right now, would be a small percentage, because. With the acquisition also. With the acquisition, that's right. Yeah. Any percentage you could give us? We'll be able to share better next quarter because there's only two and a half months. The idea is to focus on the Rx piece first and then ramp up the OTC for the acquisition as well. Okay. Thank you. Thank you for it. Thank you. Any participant who wishes to ask a question may enter star and one. We would also request participants to please use handset mode to ask a question. The next question is from the line of Cyndrella Carvalho from JM Financial. Please go ahead. Thanks for the opportunity. Just wanted to know your thoughts on US market, because of Indrad now. How do you see or what is your thought process and in terms of getting a new launch into the market, what is the plan going ahead? Any changes that you intend to make, any third party sourcing, any other thoughts that you can help us understand? Sure. you know, the way it kind of is a setback for the organization. We would have greater visibility 45-90 days down the line, right? As the range of options before the FDA is quite wide. Depending upon the decision they make, we are kind of building up various scenarios as to what is the best way forward. I would say that it looks challenging to bring new products to the U.S. market in the near term, especially because of what happened in Indrad, but also that we have not yet had the inspectors come over to Dahej. We are waiting for that inspection to happen. As of today, I'm sitting on 55 filings for the U.S., out of which, you know, I think 19 are from Indrad and 16 are from Dahej. There's a lot of filings from these two facilities. If, as with the passage of time, the value of these filings gets depreciated. We'll have to kind of decide how we want to proceed, but I won't be able to share that with you today. It's sufficient to say that we are in the scenario building phase depending on how the FDA outcome goes. I think, Cyndrella, the only thing I wanted to add to what Sanjay said, so Dahej, we have enough capacity now. It's quite underutilized. If things go positive as far as Behraj re-inspection is concerned, many of these products which are there in Indrad can really shift to Behraj without an issue because the filings for getting approval for all these products have already been done or it's just waiting for submission, and this would take a very short time to get an approval. Additionally, we are also looking at some of the CMO options for certain high volume products, which we initiated to optimize the overall cost and be more competitive. There are options which we are looking at at least for the existing product base. As Sanjay said, you know, the new product filings which have been done from Indrad, that's something which, we need to, understand, whether something can be salvaged, out of that plant. This is very helpful. Thank you so much for that. One more question is on the Indian derma space. You mentioned that the Rx market you will be focusing first. What is, if any, thoughts that you can share in terms of strategy that you are going in, for the dermas, specifically for the Curatio acquisition? If you could highlight, our strengths, what are we trying to build up, will be helpful. Thank you so much. Yeah. We had mentioned in the last call that Curatio has a strong presence in pediatric derma. We also have a very strong presence in the south and west markets. There is a lot more opportunity in the north and east markets, but those markets are just smaller in size compared to the south and west. There is still quite a bit headroom for increasing the share in these regions as well. Overall, while the existing markets will continue to grow, we can add a reasonable share from the non-covered markets, which we'll be taking up probably in the next couple of quarters. All the brands, the top five brands are continuing to do quite well as of now. We believe that, the top three brands, whether it's Tedibar or Atogla, they continue to see more and more market share gain even in the Rx space. Hopefully that should continue in the same range of growth for the next couple of quarters. The additional initiatives should add to the incremental growth. Thank you so much. Thank you. Our next question is from the line of Tushar Manudhane from Motilal Oswal. Please go ahead. Just on this inspection at Indrad. What triggered the inspection? Basically, will that also help in getting the other site inspected? One site is not linked to the other. This inspection is actually a follow-up on the inspection which happened in March of 2019. It is a second inspection post observations which were made in 2019. Okay. Basically we still kind of wait for the other sites to get inspected. Yeah, yeah. That's independent of this site. Maybe the issue which maybe you have highlighted this site is kind of taken care of at the other sites so that if at all the inspection happens, it doesn't recur. Absolutely. Even the observations this time at Indrad are not the same as the ones from last time, right? They're not repeat observations. Okay. Okay. How much of the growth block, so to say, is associated for the US business? I understand that it's a multi-purpose or multi-variety site, but roughly how much of the growth block can be called out for US business? At Indrad plant? Combining Indrad, Dahej, both. I think, around 45%-50%. Oh, okay. That's dedicated for U.S. Correct. Correct. All right. Thank you. Our next question is from the line of Kumar Saumya from Ambit Capital. Please go ahead. Yeah. Thank you. I just have two quick questions. What was the Forex loss during the quarter? Forex loss during the quarter was roughly INR 40 crores. Okay, thank you. Thank you. Our next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Just one more OCD question. Question on that depreciation and interest costs also are largely factored in the transaction for me. Amortization costs for two and a half months, yes. Interest costs for two and a half months, yes. Okay. you know, in terms of cost optimization measures, are there anything that we can look forward to from a various cost sets perspective here? Absolutely right. I mean, what we said is, so we've applied for this merger scheme, right, between Curatio and TPL. Once the merger is happening, maybe two or three or four months down the line, then, the synergy value will start coming in. Additionally, procurement synergies also are likely in the next financial year. Procurement synergy plus as the PCPN increases from this base, should be further lever some margin expansion for the next, at least, two to three years. I mean, if it is from a Curatio perspective, I was also interested if except Curatio, I mean, are there levers in the business you improve, you know, support business except Curatio or profitability? Are there any levers you're working on? Nitin, if I tell you anything, wouldn't be a scientific calculated number. What I can tell you is that it's a continuous process in trying to find out whatever cost efficiency is possible. That happens in a very continuous way, I would say. The only thing I recollect now is that the freight expenses which had gone up substantially since quarter three of last year, they're still to normalize, I would say by 0.5%, 0.6%. That's one lever definitely going forward. The increase in freight expenses which had happened in quarter three of last year, at least, what we see is last one or two quarters started falling actually. There's still some amount of recovery which is pending, which should happen probably over the next two to three quarters. That's something which could be certain. Otherwise, on an overall basis, we keep on working on whatever cost efficiency is possible. Thank you. Thank you. Our next question is from the line of Saion Mukherjee from Nomura Securities. Please go ahead. Yeah, thanks. A follow-up. Sudhir, on following up on the, you know, the cost pressures. On the raw material side, any trend you are seeing, you know, with China reopening, any color or any trend you want to highlight? No, Saion, I mean, the input cost increases, it was not a significant impact as far as we were concerned. Nothing much to talk about from that perspective. If I recollect, you know, when the cost had started moving up, we said that the impact could be roughly 0.5%-0.7%. Not nothing significant, I would say. Okay. One more question? You mentioned about one-off cost this quarter, 0.6%. That's around INR 150 crores. I'm just wanting to understand how would you ascribe this? You mean the lower revenues because of the shutdown that affects it? No, no. 0.6 is roughly, Saion, I think 12-15 crores, not 1. Okay. Okay. Okay. Uh, so- I'm sorry. Yeah. Yeah. INR 12-15 crores. Yeah. Saion, I mean, just to put it in a very simple way, whatever direct costs you incur, right, for manufacturing has to be balanced with the revenue, right? There has to be a cost revenue matching. How does that happen? You have to inventorize all this cost on your manufacturing, right? There's a balancing in by way of inventory or when it is sold, it is balanced by way of sales, right? Mm-hmm. What happens is, you determine on an annual basis, the per unit cost for each product. What typically happens is when you manufacture, let's say only 50% instead of 100%, the cost absorption is only 50% on the inventory, right? The rest 50% is not getting absorbed. That's a one-time cost which comes and sits in your P&L. Okay. That's what has happened in October. Basically, after the US FDA audit was completed on 20th of September, there was a shutdown which was taken for almost 15-20 days in the month of October, for doing all those cleaning validation of equipments and stuff. Okay. Understood. Just one last question, if I can, on the U.S. I mean, you know, we have a delayed resolution. I mean, in both in Indrad and Dahej. How should we think about U.S. revenues given the price erosion and new launch from other facilities? If you can, you know, give some color around expectations in U.S. market. I think it's too early, Saion. I think one is the price erosion year-on-year, which Sanjay spoke, right? I mean, high single digit. That's something we believe should be the worst case as far as base business is concerned. Okay? Mm-hmm. From a new product perspective, at least from Dahej and Indrad, those things cannot come in until at least for Dahej, if the re-inspection is happening and getting cleared, then possibly, yes. Till that point in time, there's no visibility of the new product coming in. There are few external products which will come, maybe couple of them, over the next two years, but not significant revenue contributor is what I can say. At the most, I would say U.S. would be flattish to declining sales for the next one year. Okay. Okay. Thank you. Yeah. Thank you. Our next question is from the line of Prashant Kothari from Pictet. Please go ahead. Yeah. My first question is on the India, one of the thesis is that, during COVID time, the diagnosis of patients increased, and that should have picked up in the last one year, probably more space, more patients. Do you see that happening? Do you think that can become a, you know, stronger relative for us in the coming years? Yeah. Compared to last couple of quarters, we are seeing an increase in the chronic growth trend. I think on a MAC basis, the chronic market grew at about 8%-9%, which in the quarter is 11%. Sequentially, you can see that it's increasing. We do believe that it may stabilize at this 11%-12% level, but it does provide a significant volume opportunity for a player like us who's already got this much contribution from the chronic business. Okay. Okay. Thanks. On this, U.S. API thing, you mentioned that, you can shift products from Indrad to Dahej. Was this comment in regards to the existing drug classes or was it for the new product launches? For the existing for sure. Subject to Dahej getting clear is what I said. Same way for the new product which have been filed from Indrad. A parallel filing can happen for the same product from Dahej. For the filings which have been made, let's say a few years ago, I don't think we will make the investment to shift them. For forthcoming filings, yes. Okay. For existing large products coming out of Indrad, you can shift them onto Dahej in case Dahej is clear. That is correct. Understood. All good. Okay. Thank you so much. Thank you. Our next question is from the line of Prakash Agarwal from Axis Capital. Please go ahead. Prakash, your line is unmuted. Please go ahead with your question. Yeah. Apologies. couple of clarifications. One, you mentioned on Germany, you already started to see Q and Q, with, you know, the corrective action and the new tenders, et cetera, that you won. How do we see the fiscal 2024? I mean, do we see a mid-teen kind of growth given the low base and then normalize to high single digits? How do you see this business for next two years? Prakash, what I have is visibility on the basis of the tenders which we have won. And you know, we have a strategy in place to win more tenders every quarter, right? What I indicated is, as of today, for next year, mid single digit is something that I have visibility to. If I win additional tenders, it could be high single digit to close to double digit. But that is right now not in the bag. Okay. Okay. What's in the bag is mid-single digit? Correct. Despite the low base. The base is EUR 29 million per quarter. Okay. Which is I think almost close. Which is I think at some point we crossed 31, but not more. Okay. Fair enough. Secondly, I think, Sudhir mentioned giving example of INR 3,000 crore EBITDA. I mean, if I deconsensuse my numbers, et cetera, it's, you know, 10%, 12% higher. It's a rough number you're guiding or it is a Yeah. Yeah. An approximately INR 3,000 I said. Yeah. If that is the number, then this is the way to look at it, what I was trying to... Okay. If I look very broadly next year, India, Brazil and other ROW markets, 70% of your branded generic, you know, business is good to grow, 10%, 12%, 13%. Is that fair assumption to build models? I would think so. On, on the margin side, you see levers for, you know, margin expansion given profitability of Curatio will increase, plus costs are coming down. Would that be fair? I would think so, Prakash. I mean, what we have been seeing is, because of this branded generic pieces, there are one or two levers which keep on coming every year, provided other things remain constant, right? One is the price increase driven gross margin improvements, and the other is the operating leverage, which should continue, I believe. Okay. Plus the Curatio upside, on the margins, yeah. Yeah. Perfect. Lastly for Aman. For next year if you see India, you know, I mean, last year you mentioned about, you know, the CNS launch, one in diabetes, one in cardio. So how is the pipe looking in terms of decent sized brands which you plan to launch, which gives us confidence of 12%-13% growth? The upcoming financial year won't have as many launches as the previous year in terms of numbers. There are a few significant opportunities in diabetes which will still be there, but numbers will definitely be lower. Instead the focus will be on increasing the traction and size of the recently launched brands. There is still enough headroom for us to continue the new launch momentum in the next year from the existing launches. You mean the line extension, et cetera? No, even the recently off-patent launches that have been done. The new launches take time to gain reasonable scale. Like for example, we've done INR 5 crore now of sitagliptin in about six months, INR 5 crore monthly. We would hope that maybe by the end of next year we cross INR 100 crore overall. And that should continue growing at a high rate. That contribution should continue to increase on the new launches. The new year, next financial year, we will not have as many number of launches, that new contribution will probably be lower than the previous year. I'm just trying to dissect it here. 12%. We would again see about, say, 8% price and about 3% kind of new products and maybe 1%-2% volume. Yes. That should be doable in the next year. Okay. Okay. Great. Thank you. Thank you. Our next question is from line of Krishnendu Saha from Quantum Mutual Fund. Please go ahead. Just a follow-up on the last question I asked. If I do remember correctly, a couple of years back, we had a 36 odd or 40 odd products in, what do you call, in Brazil. Right now we're at 22. I was wondering that, this is the fact that we'll be having some supply procurement benefits for acquisition. I believe that we also had a 3-year manufacturing contract with them, if I'm right. Could you just elaborate on these two, please? So on the first part, Brazil, we have more approvals, but we focus on 22 products which are in our lead build brand category. Essentially the idea is to follow the model which has worked well for us in India, which is to build large brands and invest behind those that have the potential to grow. And we have taken a series of brands into a kind of automatic mode where we don't promote them and we kind of let them just continue on the base that they have because it's not worth putting money and resources behind them. I would say 22 brands are actively promoted and invested behind in Brazil. These are the focus products then. Yeah. Lead build products as we call them inside the company. Thank you. The rest are more in the maintain or, you know, I would say, category. Then your second question was what? We had a sourcing agreement for acquisition in India. We spoke about the fact that we'll be having some sourcing benefits next year. How do we see that link to we have a sourcing agreement for three years with a third-party company? That would not be for all products. For the full portfolio there is still enough headroom for finding alternate suppliers and getting better pricing. Just the last question. The EBITDA margin is far better than our overall company. That's what I realized last time on the call. Is it, I mean, not far better than the overall current part? Yeah. What we said is it's not diluted to the overall margins of Torrent Pharma, which would mean that Curatio has similar margins. That was the thing that was spoken last time. Thank you. Thank you for the clarification. Thank you. Thank you. Our next question is from the line of Kunal Randeria from Nuvama. Please go ahead. Hi, good evening. Just 1 question. Any visibility can you kind of give us on Revlimid launch timelines? We are not in the initial phases, for us it's a little bit of a distance on. Yeah, it's not in the next 12 months. Got it. Should I assume that it's nothing to do with plant issues? No, no, it's not made at Torrent. It's made at a third party. Okay, perfect. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now request Mr. Sanjay Gupta to add a few closing comments. Over to you, sir. I would just like to thank you for your interest in Torrent and for joining today's call. For any additional questions, please feel free to call our investor relations group. Thank you very much and look forward to hearing from you soon. Bye-bye. Thank you, members of the management. On behalf of Torrent Pharmaceuticals, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.