Ladies and Gentlemen, good day and welcome to JB Pharma's Q1FY26 earnings conference call as on 31 July 2025. 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 call, please signal an operator by pressing Star then zero on your touch tone phone. I now hand the conference over to Mr. Jason D’Souza, Executive Vice President at JB Pharma. Thank you. Over to you sir. Thank you. Rayo. Welcome to the earnings call of JB Pharma. We have with us today Nikhil Chopra, CEO and Whole-time Director, Kunal Khanna, President of Operations, and Narayan Saraf, the CFO at JB Chemicals & Pharmaceuticals Limited. Before we begin, I would like to state that some of the statements in today's discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q1 FY2026 results presentation that has been sent to you earlier. I would like to hand it over to Mr. Nikhil Chopra to begin the proceedings of the call for his opening remarks. Thank you, Jason, and welcome to all of you on today's call. Let me begin by addressing the significant strategic development that was announced recently. On June 29, Torrent Pharma announced its intention to acquire control in the stake of KKR in JB Pharma. This will be followed by a merger of JB Pharma with itself. The transaction creates a diversified healthcare platform with deep capabilities in chronic and international CDMO segment. I will briefly share the highlights of the transaction with all of you. Torrent first acquired a 46.39% stake for a cash consideration of INR 11,917 crore as per specified SPA. This will trigger the mandatory tender offer where the price has been fixed at INR 1,639.18 per share. This will be followed by the merger of the two companies with Torrent being the surviving listed entity. Once the scheme is effective, the transaction remains subject to CCI and other regulatory approvals which have to come in place. Meanwhile, coming back to JB's performance for the quarter, business is as usual at JB and I'm glad to share that JB 's operating momentum continues to impress. The business is amongst the fastest growing in India within the Indian pharma market. During quarter one, overall revenues increased by 9% to INR 1,094 crore with operating EBITDA excluding non-cash ESOP and one-off charges grew by 13% to INR 330 crore. Our net profit showed a 14% increase to INR 202 crore. Given enhanced margins and cost alignment, the gross margins during quarter one came in at 68.3%, growing 210 bps year on year. This followed consistent cost optimization initiatives, a favorable business mix, and pricing growth. Operating EBITDA margin stood at 30.2%, higher by 120 basis points year on year and once again re-emphasizing our focus on profitable growth. Just to also share with you, 30.2%—our EBITDA margins are the best up till now that we have reported. I shall now turn attention to our domestic business. The domestic business delivered 14% growth year on year to INR 678 crore during quarter one FY2026. As per IQVIA, we showed 13% growth for quarter one FY2026 relative to 9% increase shown by the industry. Within domestic business, as per IQVIA, our chronic portfolio continued its growth trend, achieving 15% growth year on year. Quarter one also showed acute business increasing by 12% year on year. The ophthalmology portfolio has also delivered a growth of 19% improvement year on year as per IQVIA data. Our leading brands and their franchises continue to perform well and continue to outperform the market growth. Our acquired portfolio is growing from strength to strength. As per MAT June 2025, Sporlac as a franchise has grown to INR 146 crore as compared to INR 70 crore in June 2022. As a comparison, when we had just acquired the portfolio, Sporlac also recently entered the top 300 brands list in the country. Azmarda is now a INR 75 crore brand and present in one of the fastest growing segments in cardiology, that is heart failure. The Razel franchise has performed well in a short period and for the first time has crossed INR 100 crore as a franchise as per IQVIA at June 2025. This is a significant development considering the franchise was INR 69 crore as per June 2023 IQVIA. Across whether we talk of Sporlac, we talk of ophthalmology, we talk of Razel, we talk of Azmarda, all our franchises continue to deliver very good performance. I shall now turn attention to our international operations. During quarter one, we saw 2% growth to INR 416 crore led by our CDMO business. In the international operations, the CDMO business showed 8% improvement year on year to INR 115 crore. Given sustained momentum, the business has an attractive development pipeline of products of global significance with its key partners. International Formulations saw revenue of INR 283 crore from INR 290 crore previously, while branded export business recorded growth for a quarter in FY 2026, and the other businesses, i.e. Russia, U.S., and South Africa, remained flat or marginally declined for the quarter. For the CDMO business, the first commercial quantities of new products such as iodine, liquid throat- spray, variants of immunity, lozenges in Asia Pac and EU markets have already been dispatched, which we have been talking about earlier in our commentary in the investor call. This is what we wanted to share, the detail that this is the progress that we have made in the world of CDMO business. With new products now being dispatched in some of the Asia Pac and EU markets, we are expecting three to four important new launches in the next 12 to 18 months. JB continues to remain focused on driving top-line momentum, cost optimization, and organization efficiencies. The sustained emphasis on the domestic and CDMO business will continue supporting both growth and profitability, backed up by strong financial foundation and deeply execution-oriented culture. We are well equipped to steer confidently into the next phase of our evolution. I would like to now hand over to our CFO Mr. Narayan Saraf for his views. Over to you Narayan. Thank you, thank you Nikhil. Welcome everyone to our Q1 FY26 earnings call. I will now take you through the financial highlights. Revenues for the quarter stood at INR 1,094 crore, reflecting a 9% year-on-year growth. The domestic to international business mix was 62% and 38% respectively. The domestic business delivered revenues of INR 678 crore, growing 14% year-on-year. Heated by traction in chronic, ophthalmology, and acute portfolios, international business grew 2% year-on-year at INR 416 crore. CDMO segment grew 8% year-on-year to INR 115 crore, and we expect the momentum to continue. The international formulations business declined by 2% year-on-year to INR 283 crore. Other businesses of Russia, U.S., South Africa were impacted while exporting branded generics grew. The API vertical grew 38% year-on-year with revenues at INR 18 crore. Gross margins for the quarter came in at 68.3% versus 66.2% in Q1 FY25. This expansion of 210 basis points was aided by price growth, cost optimization efforts, and favorable business mix. Operating EBITDA excluding ESOP cost and one-off impact due to proposed merger scheme was at INR 330 crore, marking a 13% year-on-year increase. Operating margin excluding ESOP costs and one-off improved to 30.2% versus 29% in Q1 FY25, thereby reflecting 120 basis points improvement. Batch margin excluding one-off impact is at INR 214 crore, improved to 19.6% versus 17.6% in Q1 FY25, marking a 21% year-on-year increase. On the cost front, employee benefit expenses increased 16% year-on-year to INR 194 crore. ESOP cost was at INR 14 crore versus INR 12 crore last year, same quarter. Other expenses increased by 16% to INR 252 crore due to one-off charges of INR 15 crore on account of the proposed merger scheme. Depreciation increased 5% year-on-year to INR 43 crore versus INR 41 crore in Q1 FY25. We remain sharply focused on advancing top-line growth, driving disciplined cost management, and enhancing operational efficiency across our diverse portfolio. Our domestic and CDMO businesses continue to serve as key growth and profitability engines, reinforcing the strength of our multi-segment strategy. With the core enablers of sustainable growth now firmly established, we are well positioned to capitalize on our future opportunities. I am confident in our organization's ability to deliver consistent value creation for our shareholders and stakeholders in the years to come. With that, I conclude my opening remarks. I now request the moderator to open the forum for the Q&A session. Thank you very much. Sure. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and 1. Ladies and gentlemen, to ask a question at this time, please press star and 1 on your touchstone telephone. A question that's just come on the wall. It's on the international business. What is the overall outlook of the international business for the year, and how do we see all the three, the international formulation, the CDMO, and the API business playing out? CDMO, as we have been guiding earlier, should grow between 12%- 14%. Quarter one, the results were at 8%. We have good visibility of order book for CDMO for quarter two. In terms of the growth perspective, our average run rate this year will be around INR 120 crore. That is what we had guided earlier. Next year, this figure would be ranging between INR 140 crore-INR 150 crore. CDMO continues to be on a good weekend. Our branded generic business declined for the quarter. If you look at the overall trend of the business, second half the business ramps up. There also, we have good visibility of order book for quarter two. By end of quarter three, you should see that business growing at high single digit. That is what the visibility we have got for our international rest of the world family generic business. On the domestic business, the follow-up question which is therein is that we've seen a very strong 14% growth. Do we see this growth rate continuing for the remaining part of the year? Yeah, if you look at the recent trends and the last quarter also, our growth has been fueled by major brands and the key franchisees of those brands. Our volume growth has been 350 bps higher than the market. While the market volume growth as per MAC June was close to 1.5%, we had registered 4% plus. We will continue to see these growth trends with all our key brands fueling the growth. We should be in the range of 12- 14% with 300 to 350 bps higher than the market. We can take the questions back in the queue. Sure. Before we take the next question, a reminder to participants that you may press Star and one to join the question queue. The next question is from Rashmmi from Dolas Capital. Please go ahead. Thank you for the opportunity. Just one question again on the export business. You have mentioned that the export branded business has clearly declined, mainly in the Russia, South Africa, and the U.S. market. If you can explain that in each market, what has exactly happened and why this quarter is. Specifically for these markets. Russia, the season was slightly slow, and anyway most of the, if you look at the trends, the actual demand pickup usually happens from H2 onwards. September onwards, we will see a good demand pickup. South Africa, there have been some private and large institutional accounts where there has been slightly muted growth. With some of the grants kicking in, we see a good positive trend coming in H2 for us. While it was slightly slow to start with, we have good order visibility as we see our business for the next four to six months. There was some slight pricing pressure for two of our key molecules. All of that will be neutralized as we see into the remaining part of the year. These were the key reasons. We do see all these markets picking up in the next two quarters, which will help us drive high single digit growth going forward. Would you mind just giving a quarterly run rate? You know what is the run rate generally we have, you know, for U.S. We generally don't get into those kind of segment-wise disclosures. Okay. Another question is on Azmarda. Now the sales are back at around INR 75 crore. You know, how is the profitability over there? With the intense competition and all, are we able to improve the profitability as well? If you can comment more on that. That particular project, surely as the sales. Increase, we do see better operating leverage kicking in, which helps the profitability of the plant. As we had mentioned, our first target almost six months back was to steadily hit 120,000 - 125,000 units per month, and we have reached that scale. The market reflection is also showing growth and closer to double-digit growth. We will continue to be on that path for the next three to four months. Our target is to reach 140,000 units going forward. Okay. One last question on the integration expenses we have seen. Just a clarification. We have seen INR 15 crore integration expenses in the Torrent result also, which is included in other expenses, and the same thing. The total integration expenses spent was around INR 30 crore, am I correct? Yes, INR 15 crore is the cost which we are. We can comment only on our expenses. Which is INR 15 crore. Okay, thank you. That's it for my part, just before we take. The next question, we have one more question that's on the wall. The acute portfolio has rebounded pretty strongly in Q1. Would we see this momentum continue to sustain in the next few quarters? Within the Equip portfolio, if you look at what I shared earlier, Sporlac as a brand has performed very well. It has been growing at a pace of high teen growth. Land Tech and Metrogyl as a franchise, if you look at IQVIA figures, also has been flat for the quarter. The entire growth was driven by the work that the teams have done in the quarter in the world of Probiotic and the newer versions of Probiotic and equally some of the versions of our eye drops. Majorly in the world of active portfolio, i.e., moxifloxacin in combinations and anti-allergics and pain eye drops, they have also performed well. Our ophthalmology and Sporlac business have shown high teens growth, and Rantac and Metrogyl have been flat for the quarter. Great. Just another question and we'll go back to the queue. Gross margins have come up pretty high at 68%. How do we see gross margins playing out in the remaining part of the year? We hold our guidance where we are looking at the GCS in the range of 67% for the full year. We will continue to hold that guidance of 67%. Can we go back to this view, operator? Sure. Thank you. Participants who wish to ask questions, please press star and one to join the question queue. The next question is from Sumit Gupta from Centrum. Please go ahead. Hi, good afternoon. Am I audible? Yes, yes. Now you're not audible. Now you're not audible. Sumit, we can't hear you. Is it fine now? Yeah, yeah. Can you tell us the split of the domestic growth in volume price? Domestic growth is 14%. Price is around 7% and volume is also 10%. Pardon? 14% is the growth of domestic business, out of which price and volume are 7% each. Okay. With respect to the margin guidance on the operating EBITDA front, do you still maintain this 27% to 29% for full year? Yeah. Yes. Yeah, if you look at the guidance that we had given at the starting of the year, it was 27% to 29%. Yes. Historically, to see and track us, our guidance, we always want to be at the top percentile of our guidance. That will continue to be there for the year. Sure. Lastly, on the API business, it witnessed a strong growth of nearly 40%. Can you highlight what drove this and how should we see this business over the next, let's say, two to three years? We have always maintained for us API's priority more from captive consumption perspective. This growth is largely coming in from some of the demand which was pushed last year because of higher inventory for our key products. Nothing substantial or significantly has changed. Last year was a slightly slow year for us. From a Q1 perspective, it was also operating on a slower base. No substantial or significant changes per se or upside on the demand front. Okay. Was there like any particular molecule which you can highlight? No, we have always been largely, a lot of hard demand has been kicking in from diclofenac API, which we tend to export a lot, and that output has been positive for us in Q1. Sure. Thank you all the way. Thanks. Thanks. Just one more question that's come on the wall. The ophthalmology business has rebounded. Has recorded very strong growth at 19% as per IQ here. Is this the reason primarily because of the new product launches or is it because of the historic old color? In fact, if we look at our portfolio, the overall chronic and acute, the historic legacy portfolio which we were carrying have all registered significant growth. Brands like Vigamox, Vigadexa, Travacom have all been registering double-digit 12%, 13%, 14% growth plus. This growth has largely been a function of our acquired portfolio registering very strong demand in the market. When we started off, this business was trending at close to INR 40 crore quarterly run rate. Now we are close to INR 50 crore. We will keep on building on this portfolio which we have. New launches have happened, they are contributing. It's going to take some time before they become a significant contributor to the overall portfolio. Couple of additions in ophthalmology. Today we have a field force of 100. We cover around 14,000 ophthalmologists. The market has been growing at low single digit. We've been the fastest growing company today in the ophthalmology segment, growing at 19%. Today we are sixth ranked company. Our expectation is that probably nine months to a year from here we should be in top five. Good. Just the last question. We'll get back to the queue which is on the wall. In terms of the other income which is at INR 15 crore, what is the reason for it and how do we see operating cash flows for the entire year and for the quarter? Yeah. The reason of Saga income being INR 15 crore is because we had the surplus cash which we have invested into our treasury policy, which has yielded us good returns. The cash flow, we clearly expect the yearly cash flow to operating EBITDA in the range of 75% to 78% for the full year. 26. We can go back to the queue. Sure. Participants who wish to ask questions, please press star and 1 on your touch-tone telephone. Ladies and gentlemen, to ask a question, please press star and 1. The next question is from Gaurav from Ant. Please go ahead. Thank you. Good afternoon. This quarter we've seen almost 16% year-on-year growth in staff cost. Have there been any salesforce expansions that you've undertaken this quarter? No, there has been no major expansion in the field. It's mainly because of the yearly improvement and the field incentive that we have provided. This would be the new base going forward, right? Yeah. Okay. In terms of the acquisition consummating, what do you think are the major milestones for the JV management to deliver? That acquisition kind of concludes within this fiscal year. I think, Gaurav, whatever is stated in the press release is as much as what we can state, which is already out there. I think beyond that will be very difficult for us to comment. For us as JB, it is business as usual. Okay. Any guidance on the India business? We've delivered very strong growth, 14% on a year-on-year basis. We've said that we would deliver 300 to 400 with outperformance to the market. Do we see the market growth coming up to 10% and this 14% being delivered on a full year basis? For us, the market should go 8%- 10% depending upon the base variability. As guided earlier, we should be able to go 300 to 400 bps better than the market. Clarice continues to be there. Okay, sir. All the best. Thank you. Thank you. Participants who wish to ask a question, please press star and 1. Just before we take the next question on the CDMO business, the question which has come in is how do we see Q2 playing out, which is a low base, and also looking at Q3, Q4, which is a high base. Do we see CDMO back to double digit growth? CDMO is what has been shared earlier. Our average run rate for H1, that is Q1 and Q2, should be at around INR 120 crore, which we should be able to deliver. For H2, the run rate should be close to INR 130 crore. Gradually, we'll start next year with an average limit of around INR 140 crore-INR 145 crore. That is where we stand. By end of the year, as guided earlier, our CDMO gross from the vote should be between INR 12,000-INR 14,000 for the year. Thank you. Yeah, we can go back to the queue. Thank you. Participants who wish to ask questions, please press star and 1. Next question is from Akshaya Shinde from SMIFS Limited. Please go ahead. Thank you for the opportunity. I have just one question. Any development you want to share in export formulation business with respect to ROW market expansion? In raw market, basically we have filed a lot of products over the last two years. The first phase of the pipeline getting approvals should essentially kick start from September, October of this year, which are going to be 8- 10 molecules across 14- 16 key markets. There will be launch quantities, which should ideally start flowing in from Q4 of this financial year. Full commercial annualized benefit we should start seeing accruing in financial year 2027. We have done these new launches over three phases. The first phase of pipeline starts getting approvals now. The second phase of our pipeline starts getting approvals from H2 of next financial year. This will keep happening for the next two to three years, which should be significant value addition to our raw markets. Thank you. Can you hear us? Yeah, that is helpful. Thank you. Thank you. We'll just take one more question that's on the wall. Cilacar T has entered into the top 100 brands in the country in the month of June. How do we see the performance of this brand and do we see this entry into top 100 in MAT very soon? What are some of your thoughts here? Yeah, we are very hopeful that the fact that it's entered in the top 100 for a month's time, we should be able to continue to see the momentum because it's a franchise which is growing at almost 20% plus we hold leadership position in this franchise. We have done a lot of work in the area of diabetic hypertension and created a very niche position for +ARB in this particular segment. The market therapy shaping work continues, which is expanding the market, and we being a market leader are seeing good results on that. We are very confident that in the near future, very soon we will see this top 100 reflection as part of the MAT reflection as well. Thank you. We can go back to the queue. Thank you. Ladies and gentlemen, to ask a question, please press star and one on your touchstone telephone. Next question is from Gaurav D from Antique, please go ahead. Thank you. What would be the R&D spend for this quarter, and what would be the same number for 4Q and 1Q of last year, please? It's very negligible for us, just about close to 1% and it's pretty much in line with what it was in Q1 of last year as well. This would be mostly towards international formulations, essentially. Yes, a significant part of it goes towards international formulations. As we mentioned, you know, we have been working a lot on building our international pipeline, which are being registered across three phases. A substantial part of this goes towards building up that pipeline. Okay, sir, thank you. I have one last question on the wall which is on the Razel franchise. Razel has recorded extremely strong growth in this year and ever since it has been acquired. How do we see this portfolio playing out over the next two to three years? We see these strong growth rates continuing. We are fairly confident that this momentum which we have built on the brand post its acquisition, it will continue. As mentioned earlier, it was reflecting INR 60 crores almost 24 months during the acquisition. It is close to INR 100 crores. A lot of these combinations which we are working on on Razel brand and the single molecule, we have been able to build the momentum on that. This patent has been a good value addition which allows us to further drive productivity with our core cardiologist fiber base which includes cardiologists as well as consulting physicians. The work which we are trying to do on the lipid side with this brand has yielded positive results. This will continue to grow at the same pace as what we have seen over the last 12 months. Great, thanks. I think I don't see that there are any more questions that are left. I just would like to hand it over back to Nikhil Chopra for his closing remarks. Thank you. Thank you all for attending the conference call. Business continues to be as usual at JB, which I shared earlier. Once again, re-emphasizing the fact. Figures close to INR 1,100 crore top line. That is what we could report for the quarter. Best in class India growth 14%. That is what we could achieve. Operating EBITDA excluding one-off INR 330 crore, PAT INR 214 crore. That is excluding one-off, which is growing at 21%, 68.2% gross margin, and 30.2% operating EBITDA margins. That is how at least we could achieve these all figures for the quarter. We will continue to be a value accretive company for our stakeholders and shareholders. Thank you all for showing the confidence in us. Thank you once again. Thank you. Thank you very much on behalf of JB Pharma. That concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines. Thank you.