Welcome to Aurobindo Pharma Q1 FY 2024 earnings call. Please note that all participants line will be in listen-only mode. There will be an opportunity for you to ask questions after the opening remarks. Please note that this conference is being recorded. I now hand the conference over to management for opening remarks. Thank you. Over to you. Thank you, Vandit. Good morning. A warm welcome to our Q1 FY 2024 earnings call. I'm Deepti Thakur from the investor relations team. We hope you have received the Q1 FY 2024 financials and the press release that was sent out on Saturday. These are also available on our website. I would now like to introduce my senior management team on the call with us, represented by Dr. Satakarni Makkapati, CEO, Aurobindo Biosimilars, Vaccines and Peptide Businesses; Mr. Yugandhar Puvvala, CEO, Eugia Pharma Specialties Limited; Mr. Sanjeev Dani, CEO and Head, Formulations, Aurobindo Pharma Limited; Mr. Swami Iyer, CEO, Aurobindo Pharma USA; and Mr. S. Subramanian, CFO. We will begin the call with the summary highlights from the management, followed by an interactive Q&A session. Please note that some of the matters we will discuss today are forward-looking, including, and without limitation, statements relating to the implementation of strategic actions and other affirmations on our future business, business development, and commercial performance. While these forward-looking statements exemplify our judgment and future expectations concerning the development of our business, a number of risks, uncertainties, and other important factors may cause actual development and results to vary materially from our expectations. Aurobindo Pharma undertakes no obligation to publicly revise any forward-looking statements to reflect in future events or circumstances. With that, I will hand over the call to Mr. S. Subramanian for the highlights. Over to you, sir. Thank you. Good morning to all, warm welcome to this earnings call. The quarter has been robust in top line and margin expansion due to overall performance improvement across the business segments. We will now discuss the results for the Q1 of fiscal year FY 2024, declared by the company. For Q1, the company registered a revenue of INR 6,850 crore, with an increase of 9.9% year-on-year and 5.8% quarter-on-quarter. The EBITDA before Forex and other income grew by 19.3% year-on-year and 14.9% quarter-on-quarter to INR 1,151.4 crore. EBITDA margin for the quarter was at 16.8%. Net profit increased by 12.8% quarter-on-quarter to INR 570.8 crore. EBITDA margin before R&D is 22.5% for the quarter, against 21.8% of the last quarter. In terms of the business breakdown, formulation business in Q1 FY 2024 witnessed a growth of 6.6% quarter-on-quarter to INR 5,817.2 crores and contributed around 84.9% of the total revenue. API business contributed around 15.1% and clocked a revenue of INR 1,033.3 crores for the quarter, registering a growth of 14% on a year-on-year basis, led by improved demand for support key products. For the quarter, the revenue from US formulation increased by 11.2% year-on-year to INR 3,304.1 crores. On a constant currency basis, US revenue increased by 4.2% year-on-year basis to $402.2 million. We have received final approval of 19 ANDAs and launched 15 products in the quarter under review. We have filed 12 ANDAs, including 1 injectable, during the quarter. The total number of filings at the end of June 2023 is 814. Revenue for Aurobindo Pharma USA, the company marketing oral products in USA, has increased by 11.8% quarter-on-quarter. Revenue of Eugia Injectable in US business increased by 11.7% year-on-year and 11.4% quarter-on-quarter to $80.1 million for the quarter. The total Eugia Specialty business in US, including the Specialty OSD, amounts to $91 million. During the quarter, the Eugia performance in various fiscal parameters are better than the last quarter. Globally, Eugia Pharma Specialties has achieved a sale of $122 million on a pro forma basis. We have a total of 169 injectable ANDA filings as on 30th June 2023, out of which 130 have received the final approval, and the other 39 are under review or have tentative approval. The company, as on 30th June 2023, has 814 ANDAs filed with the USFDA on a cumulative basis, out of which 613 have final approval and 34 having tentative approval, including 8 ANDAs, which are tentatively approved under the PEPFAR, and the balance 167 ANDAs are under review. For the quarter, Euro Formulations revenue clocked at INR 1,836.8 crore, an increase of 18.6% year-on-year growth. In base currency terms, the EUR clocked a revenue of EUR 205.4 million, against EUR 188.8 billion of last year Q1. For the quarter, growth markets increased by 12.9% year-on-year to INR 486.1. This includes PLI incentive of INR 40 crore against INR 63 crore of last quarter. For the quarter, ARV Formulation clocked a revenue of INR 190 crore. Gross Margin for the quarter was marginally lower at 53.9% against 54.7% of last quarter. mainly due to business through product mix. Around 6.6% drop can be attributed to lower other operating income, mainly the export benefits on account of timing issues. EBITDA margins have gone up due to improved operating leverage. Capacity utilization for major businesses have gone up well in this quarter. R&D expenditures are INR 387.6 crore during the quarter, which is 5.7% of the revenue. As on date, out of 18 US FDA regulated units, 17 units are having classification of VAI, and only 1 unit is under warning letter. Net CapEx for the quarter is $95.3 million, out of which PLI CapEx is $34 million. The PLI cumulative CapEx for Pen-G till June amounts to $160 million. The average USD INR exchange rate is 82.15 in Q1 FY24, against 82.196 in Q4 FY23. The average finance cost for the quarter was at 4.7%, mainly due to having multiple currency loans. The business generated a free cash flow of $29.5 million during this quarter, before the PLI investments and investments in new markets. As a result of the strong cash flow generated during the quarter, the net cash position, including investments at the end of June, was $178 million. The gross debt is $644 million. Outlook. Our financial performance in Q1 was on the back of a positive business environment in key market, as well as our continued focus on driving growth and efficiency. We remain committed to strong execution in the coming quarters, while adhering to the highest quality standards. Some of the key highlights for the coming quarters are summarized below. Quarter one clearly indicated the price for now a bit flat. We remain optimistic about Q2 in terms of the margins. Our endeavor is to achieve an internal target of 18+% EBITDA for the year, plus margin on special product. We are on track. PLI facilities and investments are targeted to be completed before 1st April 2024. Commercialization of some of our other new projects in China and India by Q1 FY 2025. With the above actions, including commercialization of PLI and other projects over a period of time and stabilization of the manufacturing processes, EBITDA margin is expected to cross 20% based on the current market conditions. BoD, the board of directors, have decided to explore the possibility of restructuring of Eugia vertical. Acquisition of ANDAs and market authorization based on market opportunities, thereby reducing the registration periods. Progression of our biosimilar pipeline and other commercialization starting from FY 25 onwards. Continuing CapEx related to debottlenecking and maintenance, thereby increasing the manufacturing capacity and efficiency. This is all from my end. My colleagues will give more clarity on it in our Q&A session. We are happy to take your questions now. Thank you. Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask questions, please raise your hand from the participant tab on your screen. Participants are requested to use headphones or earphones while asking the question. The first question is from Damayanti Kerai. Hi, good morning. Thank you for the opportunity. Subra, sir, clarity on margin outlook. You said by Q2, we should be crossing 18% margin, and for full year, it should be ahead of 20%, right? No, I never said. For the year is 18% plus special product. I made it very clear. For special products, not, not on the console basis. Console basis, when I meant the special product, as of date, Revlimid, Mr. Yugandhar will be talking about it when he's addressing the queue. Excluding that, I will be targeting around 18% for the year. Okay, okay. Excluding Revlimid, 18%+ and, post, Revlimid launch in, second half, it could be in 20%+? No, I have not said that. I said for the year, 18% plus, excluding Revlimid, plus whatever margin on Revlimid, we will be- Okay, okay. Got, got it, sir. Got it. Thanks. Sir, you talked about Eugia vertical restructuring. Can you talk bit of more, like, what is going to change and how, how we should look at that vertical? If you recall, last year we made an attempt to do the restructuring of Eugia vertical by carving out it to a separate entity, due to market conditions and slowdown in the US FDA inspections at that particular point of time, we have put it on hold. we are now targeting, put it on hold and terminated the process. Now we are planning to start the process. How it will take a shape, we'll come to know maybe in the next one or two months. The decision has been taken only day before, I mean, on 12th of August only, we'll come to know it clearly in the next two, three months. Okay, my last question is, Europe has seen a very good pickup. What has led to strong performance? Are we seeing better supply, especially the injectables to Europe now? Yeah. Damayanti, the real driver of the performance has been orals. Because of our broad product portfolio and excellent customer coverage, we are in a better position to gain market share when the competitors have shortages. This has resulted in our better performance and better margin also. driven by orals, as you said, market conditions are more conducive, which is. Exactly. Exactly, yeah. The injectables will get a full blast when we start getting supply from Pfizer. Okay. Okay, thanks. I'll get back in the queue. Thank you. The next question is from Neha Manpuria. Yeah, thanks for taking my question. you know, just wanted to get some color on, you know, the US business. We have done very well quarter-on-quarter, particularly, on the oral solid business, but that does not seem to reflect in our Gross Margin s. I mean, Gross Margin s were still pretty okay, you know, quarter-on-quarter. you know, was there any one-off in the US business? Also, what would be the impact of the Puerto Rico shutdown, and how should we think about that, you know, for the subsequent quarters? Swami? Hi. Thanks, Neha. Subra, can you talk about the Gross Margin? Yes, I will talk the Gross Margin. Yes. Okay. You want to take that first, or I can go ahead? No, I will do it next, after revenue. Yeah. There, from the US side, there have not been any one-off, which has been negative. That's number one. Number two, the Puerto Rico, again, whatever has happened, Subra can give more color, but, I think there's been no impact. There'll be no impact right now, because we had some revenues, which is marginal, and the bottom line, the profit for that is very minimal. Subra can give probably more color on that, too. Otherwise, we hope to redo the facility, and we'll get back into business quickly. Neha, let me address the Gross Margin issue which you have raised here. The first point, if you really see the press release, is the API business overall grown by 1.6%, but really we have grown on the beta-lactam by 12.8%, and the non-beta-lactam degrown by 17.3% this quarter. I'm talking about the external sales. As ever, the beta-lactam Gross Margin s are lower, and the non-beta-lactam Gross Margin s are higher. It, there was a business mix, I mean, there was a product mix, product category mix within the business of API, right? Second, Europe, Europe business has done extremely well. While the Europe Gross Margin s are lower compared to the overall corporate Gross Margins, but they have done well, so it's slightly pulled down. Having said that, the increase of the gross, the increase of the European business has led to increased operating leverage, which has helped in improving the overall margin of the company. The third point is, in terms of the export benefits, clearly, we, we are entitled for INR 200 crore in a year. I mean, as per the last guideline, I mean, official or unofficial, I don't know, the last May, and last proposal, which has been circulated, which is under discussion. Every company is entitled to around INR 200 crore, and we have accrued INR 40 crore because of we have to meet certain eligibility criteria. With the enrollment coming in this quarter and next quarter, we will be able to achieve that, and the year as a whole, we are targeting to achieve INR 200 crore. Overall, the 0.6% drop is attributed to the drop in the export benefits. It's a timing issue, right? As I said, with the, the improved capacity utilization and the operating leverage, et cetera, we are poised to achieve the 18% EBITDA margin, and the EBITDA also move up. The last point, which you have talked about, is the Puerto Rico. Puerto Rico, the, practically we are having a, zero EBITDA, et cetera, with a shutdown and restructure the entire plant and other things with the. We are likely to, in the immediate term, we are likely to see a EBITDA margin improving by 0.5%. By 0.5%, yeah. Does it answer your queries, Neha? Puerto Rico, what was the sales contribution to the US business? Was it, you know, $20 million-$25 million? Typically, they contribute around, around, in and around 15%-20%, anywhere between, anywhere between 15%-20%. Per quarter? Yeah. This is the annual. Last year as a whole, if you have really seen the press release which we issued to the stock exchange, if I recollect, our contribution for the last year was around $52 million. Okay. This sales for the time being will go to 0. We should incorporate that. There is no impact on the profitability, rather the overall- Understood. EBITDA margin goes up. Okay, understood. So for the injectable business, you know, Yugandhar, could you give some color in terms of what we are seeing there? You know, how much of the quarter-on-quarter improvement is essentially existing business, you know, market share gains, product disruption, and how sticky do you think the situation could be, you know, going forward? In fact, like, it is a general growth, Neha, in terms of, overall, injectable business, mainly in US. It is quite sticky in terms of, I think there's a general improvement. Now, like there's no one-offs, and there's no one-off opportunities or anything which has driven this number. It's a general growth across molecules, and probably, like, driven by better market conditions and good tailwinds. Do we expect to see incremental benefit in the short term because of the Pfizer plant damages? I don't think so, because it is mainly the damages as is to the warehouse- Mm-hmm. ... and not to the manufacturing facility. In general, what we will see is probably a, there'll be a one, two months of delayed supplies from Pfizer. That extent, we might get some small business gains, but we don't expect significant things changing. We do have overlapping portfolio between that particular plant and with us, only thing is we have not seen anything which is significant. Got it. Thank you so much. Thank you. The next question is from Shyam. Yeah, good morning, and thank you for taking my question. Just first one on the US run rate quarterly, so we have reached $400 million, I think, after, like, maybe 2+ years. Just want to understand how the base business performance will likely continue, or how what's the outlook for the base business for the US? If you could also talk about pricing erosion. You know, we've been hearing commentaries about improving price erosion, so how should it pan out for the remainder of the year? Also, in terms of whatever you can share on Revlimid, you I thank you, Subra, sir, for giving the separate margin guidance, so that, that's helpful. Just how should we look at that as an opportunity as well for us? Subra, I can take this question. Yeah, yeah. If you talk about Revlimid. First, let me take the two questions. Thanks, Shyam. First, let me address your question on the growth in the US. We, we had a volume-led strategy in the US, and we have delivered strong underlying growth through our business by leveraging our global scale. You know, we have large manufacturing facilities, and this comes in very useful. A demand for our portfolio, the portfolio of products is quite sturdy, and we had strong growth of, in volumes during this quarter. We are building our strong track record, and we are well positioned for a stronger year across a broad range of products. Swami, sir, all the dollar revenue growth, let's assume, is it all coming from volume and price is stable? How, how do you classify this pricing part? Yeah. Let me go to the second point you raised about the prices. I would say the prices are stable now. We have seen continuation of that. We saw some during the last quarter, and this Q1 has been somewhat similar. The outlook, Swami sir, do you think it'll now last for the, for the remainder of the year? Yeah. What, what's driving this, stability? I did mention about the outlook. I said that we are building on a strong track record, and we are progressing well with our pipeline. We have also augmented a bit with some NDA purchases. We believe that we would have a decent growth going forward. Got it, sir. Helpful. Subra sir, on the Revlimid? I think Yugandhar is the best person to answer. Yeah, I think, Shyam, let me put it this way, we do, we treat Revlimid as one of opportunity, and so we will just keep that, and I'll answer that as well. See, at our overall level in US, we have moved from 70-80 to this quarter, we have touched 90. Overall, Eugia as a global entity, like, we have touched $122 million. Our endeavor is to make it $100 million+ for US and overall to $130 million. That takes us to almost a $500 million entity. That's our endeavor for this year. That is excluding Revlimid. Revlimid, whatever comes, it, we will launch it from October 1, that's the settlement date. We will treat that as a one-off opportunity, and whatever comes, it comes. I just want to add 1 point. Whatever Yugandhar said, $500 million, you need to look at it against the $411 million dollars, which the, which the Eugia business achieved on a pro forma basis last year. Sure. Subra sir, thank-thanks for that, and Yugandhar sir. I think my question, just on the second piece which is coming to, was on the glo- the Eugia. Global sales has done better than, say, I know $10 million has increased in the US, but I remember the run rate was $100 million overall, or $110 million, maybe I'm wrong, last quarter. That has moved to this $120 million. Revlimid, we don't have elsewhere in the world, right? We are only US. Can you clarify that? Revlimid, we do have elsewhere, but only thing is US dynamics, pricing dynamics are different from rest of the world. We have launched Revlimid in Europe last year itself, but the pricing dynamics in Europe are completely different. US, you know, it is completely different. The opportunity in US is much bigger than rest of the world. Revlimid, it is there all across. Wherever there is a patent expiry, we did launch, but in case of US, it is percentage-based settlements for various generic companies. We'll be launching based on our settlement date with the innovator. Yugandhar, my question was the non-US global Eugia. How has that grown QOQ? That was the question, and what is driving it? Yeah, it's basically like, I think you are bang on, because we used to be in the midst of around $100 million-$110 million for last few quarters. That has gone up to $122 million now. Our endeavor is to grow that business to $130+ million, starting from next quarter. That's our endeavor. We wanted to grow that business, that is what Subra said, that excluding Revlimid, last year sales at a pro forma level was $411 million. We, our endeavor is to make it $500+ million for this year. Got it, sir. Thank you, and all the best. Thank you. The next question is from Kunal Dhamesha. Hi, thank you for the opportunity. First one on the Eugia business. When you say restructuring, is it that the out of U.S. business is still not included in the entity, and hence we are putting it as a pro forma? No, no. We are trying to bring it to the law. No, U.S. entity has been fully part of the Eugia already under Carver, with effect from April 1, 2022. There are some small, I mean, like Canada, no, we are in the process of moving because those are all depending upon the regulatory approvals for move the product from Aurobindo to Eugia. Those are all the markets, small markets. The major markets have been achieved. Europe has been achieved, the U.S. has been achieved, which is around 90%-93% has already been achieved. Probably 4%, 5% is what pending, which we will complete it this, I think, over a period of next 3, 4 months time. Okay, sure. The entire injectable and specialty business globally should come under that bucket? Already it is, more or less 98% is already coming- Yeah. under the Eugia balance sheet. Okay. Okay, perfect. Perfect. You know, we had this guidance of $650 million-$700 million, and, we are saying $500 million for this year. Are we still sticking to $650 million-$700 million, and now that, within this $500 million we have excluded Revlimid, so within that $650 million-$700 million also we'll be excluding Revlimid? How to think about it? No, in fact, Kunal, like, I stopped giving that guidance that was given 2 years back, and we said this, based on the current market conditions, we will see how it, how the business, actually grows. Mm-hmm. That INR 600 crore-INR 650 crore, like, we stopped giving that guidance. Mm-hmm. first thing is, like, we will treat these as two different things. One is, how do we grow the base business? Mm-hmm. That is the 500, how we can go to 550 and on, plus Revlimid. Together, it might be 600, 650, it might happen, but only thing is, at this juncture, we stopped giving that guidance. Okay. Sure. Then, you know, just on the US generic side, I think we have grown sequentially by almost around 9%, at least in the INR terms. I think you have said the price erosion has been trade off or pricing has been flat. Would that be the same assumption you would be making when you'll be giving the 18% EBITDA margin guidance for the full year? In terms of... I think I'll ask Swami also to respond to this, but what we have seen, at least in the last quarter, is almost negligible, price erosion. We expect probably the next two, three quarters to span out the similar way for the overall injectable and specialty business. Swami, in case if you want to just talk about the other business. Yeah, sure. The price erosion, like I said, has leveled off and it's stable now, the price are stable, I mean. We think that this would continue giving, given all the supply disruptions, and the customers wanting stable supply of our product, we, we believe that this would continue. As far as the Gross Margin or the EBITDA is concerned, I think Subra can answer that better about whether 18%, or what exactly is factored in. Yes, sure. Kunal, we have given very clear clarity. As on date, it is 16.8%. Right. Right? Mm-hmm. With the export benefits, et cetera, coming back to, it's a timing issue, which I said, which will add to another 0.5%. Mm-hmm. I also said Puerto Rico will add another 0.5%. If you really see the adjusted EBITDA, it's already 17.8%. Thank you. Actions have been taken already, right? Mm-hmm. Going forward, if the price remaining flat and we are able to improve the operating leverage, et cetera, we will certainly cross that 18 benchmark which we have put a target on ourself, even though we have not given it as a guidance, right? We will certainly. Mm. be able to achieve it. It's our strong belief. Sure, sure. The last one, sir, from my side, on the PLI scheme. I believe that our PLI capacity for Pen-G is roughly half of the India, you know, usage. If I have to kind of put it relative to, let's say, the global consumption, where that would feature? I think, That is not possible to know. Everything will go to India, et cetera, we do not know. Secondly, the plant which are putting it is predominantly for Indian market and the rest of the world market as on date, because we are not going to wait for the necessary regulatory approval from the various regulatory agencies. What we are trying to look at it is the Indian capacity estimated, even though there is no authentic information, estimated around 20,000, and we have put a capacity of 15,000, and out of that, our consumption will be around 40%-45%. This is what- Okay. Also we said, it will take some time to ramp up properly, because it is not that you put the button, next day, all the material, 15,000 tons, will come like that. We will gradually ramp it up, by which probably next year, mid of this, maybe by October, November, we'll get the full ramp up, et cetera. It's too early to talk about that. We have to first integrate the entire processes and establish the yields and other things. Probably, as I said, probably we'll get a clarity in the month of February. Sure, sir. Thank you. I have more questions. I'll get back in. Thank you. The next question is from Surya Patra. Yes, thank you, sir. Thanks for taking my question. Just the first question on the overall injector, injection business, the legacy injection business. I think we are seeing the, this quarter is the strongest quarter so far. And generally, Q1 is a relatively lean quarter compared to other quarters. Are we or is it fair to believe that the ramp-up subsequently in the subsequent quarter, what we are likely to see, that will lead to a kind of a meaningful, strong double-digit growth for the injectable business? If yes, what is driving this, sir? Is it new product launch, or it is a price improvement situation, or it is the, the one-off, one-time kind of supply benefit that you might be getting? What is the outlook here in the injectable business? Yeah. So here, like, I think I explained this previously, like, yeah, it is, it's a start, it's a decent start for the year, we expect that it will ramp up further. If you just see, like, 122 into 4, it should be 488, but we are saying it, we wanted to hit 500+ for this year. That's our endeavor. But it has nothing to do with the current shortages. It is a general growth in volumes and H2 launches and the launches for this year. It's a general overall performance of the business, but has nothing to do with the current shortages in the US market. Any pipeline-related confidence that you are having for your expectations? If yes, then if you can share the key product opportunities that you are targeting, apart from the Revlimid, let's say? Yeah. It is, it is, there are no, no blockbusters. In fact, we, we have done, we have been doing, and we expect that we will continue to do well on new product approvals and launches. We wanted to maintain that 20-plus launches track record for Eugia business. It will be a timing issue in terms of when each product ramps up, but it will be a general, overall trend, no blockbusters. Got it. Just on the Revlimid, because what we have witnessed for a couple of your Indian competitors, so the volume share, what we have grabbed, is kind of a decent number, more than 5%, multiple players have grabbed it. When you are launching relatively lately, and that is also a kind of volume-limited fact, so what is the pricing scenario that you do anticipate once you launch in the third wave, let's say? And what would be your volume expectations. I think you answered the question in terms of volume expectations, Surya, because this is, we are not supposed to tell what exactly is the volume settlement. Obviously, we are in the third wave. We are expected to be much lower than the other players who have launched in the early settlement, regime. Okay. But we expect the pricing to be stable because there's, you know it very well, it's a limited volume, and that limited volume I can only supply to probably one or two customers. We expect the pricing to be stable till the end of 2025. The supply would be evenly distributed, sir? Yeah, it is depending on how the settlement terms are and what is the volume percentage, and based on that, we will accordingly distribute that. Okay. My next question is on the European business. Here also, we are seeing a kind of a best ever quarter. What is driving this, and what is the outlook that one should really have? Here, currently, what is the state of injectable business in the overall European business? Going ahead, what it could be, because that was our aspiration to achieve a kind of a sizable sales of revenue coming from the injectable, even in case of a European business. If you can give some sense about it, that would be fine. Yeah, sure. Surya. Yeah. Yugandhar, you want to answer? No, no, go ahead, Sanjeev. Yeah, yeah. Surya, basically, I mentioned this earlier in the call, that, that because of our very broad product portfolio and even expanding and excellent customer coverage, we have gained the market share because some of the competitors have been in shortages. Yeah. That is the, we are the preferred partner for pharmacy as well as the hospitals, so that is the first driver. Second is that going forward, you know, we, we have this, transfer of products, manufacturing to India, source, so that is driving the margins and making us more competitive and ability to increase our market share. we are having more than 200 products under development or already filed. And as and when they are launched, we will be gaining in the product portfolio. We don't normally give guidance, but we have said earlier that we'll grow faster than the market, about 5%-8% growth on year-on-year. That is what we are expecting at a constant currency basis. As far as the injectable is concerned, Yugandhar, you want to answer, but it is EUR 18 million-EUR 20 million per quarter right now. For Visak plan, over to you, Yugandhar. I think that is. Yeah, you're right. Future growth will come from Europe, but currently we are not that big. Out of the overall $500 million, what we are aspiring to do for this year, probably like Europe will be $60 million-$70 million, and that is what we want to take it up to $100 million+. US continues to be the big brother, and US will contribute to have significant sales for Eugia. Sir, with the improved European performance this quarter, the best ever quarter, could you give some sense, what is the kind of overall margin that we should be tracking here? We have reached mid-teens in EBITDA% to net sales. Okay, that's a mark improvement compared to the last full year number, right, sir? Yeah, that's right. Okay. Okay. Yeah, thank you, sir. Thanks a lot. Wish you all the best. Thank you. The next question is from Nitin. Hello. Thank you, sir. Thank you for your question. Sir, my question is on, on the CapEx. Barring PLI CapEx, can you just help us, what are the major CapEx, timing of the major CapEx getting commercialized over the next 12 to 18 months? No, apart from the PLI, no, we are putting some forward derivative plans, linking to the PL- I mean, the Pen-G plant, right? Those are all, may not be a very significant, maybe around INR 150 crore-INR 200 crore, like that, two, three plants we are putting it, so that we will also be able to effectively utilize the Pen-G, we are doing that, right? Apart from that, the China plant is also we have done it, and the exhibit batches are getting filed, and that is also expected to, as you know, the, the European inspection is also over. Those is expected to start by, we are saying, if not earlier, at least by April 24th, we should start for the Europe business. Like that, we are working on that. All these things, we are working on that. The Chinese plant is largely made for for European supplies, or are we looking at capital Chinese market also? No, no, we are working for all markets. I mean, no plant is. Except we have the unit 15, which is dedicated Europe plant in India. I think, China plant is dedic- I mean, it's for China market, Europe market, and if possible, US market also, we may do that. Yugandhar, on the, on the injectable business, you know, what opportunity do you see for extending our injectable pipeline to the ROW markets? Oh, we, we keep extending it. In fact, we do have a decent size of business in ROW markets and also growth markets. That we are present in multiple markets, but obviously not of the scale. The scale is there in six European countries, Canada, Brazil, and Colombia, but the rest- and South Africa, but rest of the markets also, we do supply, and we do have filings. The scaling up, I think, what we wanted to do is, once the restructuring happens, then we will also put significant efforts in scaling up rest of the world markets. Lastly, on the biologics, you've indicated that you spent almost $280 million in the biologics business. In terms of the return on this investment, sir, how do we-- what kind of timelines do we see, you know, what should we keep, keep in mind? Can you repeat? Yeah. Okay. Can you repeat the question? You are not audible. I said, observing the biosimilar, as we talked about, you spent $280 million, in both CapEx as well as revenue expenditure. In terms of return on this investment, what kind of time frame should we start looking at when, when this, investment begins to yield results for us? We are, as you know that we have completed the licensed clinical trials for 3 programs, and we are expecting to have the launches in several markets starting next year. In fact, we could have 1 launch for an oncology biosimilar in the Indian market this year. Next year, FY 2025, would see a spate of launches, which we expect to start bringing in the revenues for this biosimilars business. Sir, do you have a broad indicative number, you know, over a period of time that we can aspire to get to in the business? To be very honest, I stay away from giving any guidance on the revenue projections for biosimilars business because the landscape, the marketplace is, is evolving fast. We have our own internal projections. We have a healthy product portfolio spread across oncology and immunology segments. We expect. ... 2028, we would have, at least 4 oncology products in Europe, and at least 2 oncology programs, products launched in the US. We expect an overall product portfolio of around 6-7 products in the regulated markets, and exactly the same number or maybe 1 or 2 more in the immunology segment in the ROW markets. Yeah, I mean, we have internal projections. It's, it will be a healthy one, but I stay away from giving projections which are far ahead from now, which is at least 4, 5 years ahead from now, Nithin. No, that is fair. Lastly, on the pneumococcal vaccine, any update on that, sir? As I have provided guidance in the last earnings call, we received a CDSCO SEC recommendation for manufacturing and marketing the 15 valent pneumococcal conjugate vaccine. I also told you that we have an ongoing 2+1 dosing trial in about 550 children, where we completed a 3+0 trial already. At this point, we have applied for a manufacturing license. We are still hoping to conclude the documentation formalities. Usually it takes anywhere between 3-6 months. It's been now 4 months, so we are expecting to obtain a manufacturing license sometime. But having said that, we are reprioritizing on certain things in the pneumococcal conjugate vaccine business. As you can see, the national tender, which forms the core of the market, that window has passed for the year. The next tender is expected only in May and June next year. I'm more, we are not, we are not pretty interested in the retail business, which forms a very minor segment of the business in India. Our target is to essentially make it a vaccine for WHO markets. With the ongoing 2 plus 1 trial, we will add more safety database, and we still need about another 1,000 subjects of safety database to really make the solid transition from making it a India-only or India-centric vaccine to a larger marketplace, which is a WHO market vaccine or the Gavi vaccine, which covers about 70 plus countries. That journey is ongoing. While we strive to get the manufacturing license, essentially this year, because the national tender phase has passed and we are not keen to bring it into retail segment at this point, the window of opportunity for the next 2 quarters to bring this product to the market has more or less passed. Right. Thank you very much. Thank you. The next question is from Bino. Hi, good morning. Couple of questions from my side. One, on a couple of products in the US, on which you have approval. One is generic Opsumit and another generic Myrbetriq. Are these products likely to be launched this financial or next financial year? Swami? Yeah. Sorry about that. I was on mute. Okay, your question was on two products. One was Opsumit. Yeah. Opsumit, right? Yeah, Opsumit, that's macitentan. Yeah. Yeah, actual product, right. That, it's a tentative approval, it's under settlement. The launch, would take some time. Okay. Could you confirm if it's next financial year? Next financial year, you mean 2024/2025? Yeah. No, we don't believe so. It could be sometime later. Okay. Myrbetriq, which is, mirabegron? Yeah, that's an OTC product, I believe. The Mirabegron also will have a subsequent launch. I don't think it will happen anytime soon, Soumen. Yeah. Yeah. Oh, okay. Second, you know, I just want to understand this final thought process regarding this Eugia restructuring. You know, what's in mind, is it like separately listing or you plan to spin it out, or what's the ultimate thought process there? I think, Bino, this will get evolved over a period of time, depending upon the interest levels and other things, it will get evolved. We will certainly keep the market informed as and when some concrete things happen. Understood. Finally, you know, you mentioned about 1 biosimilar launch in India next year, this year or next year. How are you going to sell that, in India? Hi, this is Satakarni. Bino, we are looking at co-marketing opportunities. We are in fact also looking inward and trying to see whether we can directly get into domestic marketing ourselves. But the initial, the first year of sales would technically come from the co-marketing endeavor in India, while we will also attempt to establish our own domestic marketing footprint for the oncology and immunology biosimilars in India. I can provide you more guidance a quarter or 2 quarters from now about our plans to commercialize biosimilars in the domestic market. Got it. Thank you. Just to clarify, Bino, this, as Yugandhar said, mirabegron is also not likely to be launched now. That's in the settlement, mirabegron, yeah. Understood. Thank you very much. Thank you. The next question is from Tarang Agrawal. Yeah, hi. Three questions from me. Congratulations on a strong set of numbers across businesses. One on Eugia, two on Europe. On, on Eugia, sir, could you give us a sense on what your volume share in that business is in the US, and how has that moved, maybe over last year or over the previous quarter? Yeah, I think it is we are growing by around 10% volume. We have reached in US, in the injectable segment, to the 6th position. We used to be around nine, then we reached seven, now we are, as per latest figures, we reached 6th. We are, as I said, it is a general portfolio growing and the volumes are also growing. Okay. That's helpful. Thank you. On Europe, I mean, congrats on getting north of EUR 200 million. How should we see this moving forward? Should we be able to maintain this level, or we could see some glitches going forward? Yeah, you can expect, I mean, we have not given a specific number, but around this, depending on the seasonality, because Europe does have a purchase pattern, in terms of season, holiday season, et cetera. I think, within ±5%, this range should be retained. Okay. The second question, given the nuances of the market, how should we or what would be the drivers of improvement of margins in the business? I mean, is there a potential to improve Gross Margin s from where they are currently? Perhaps, Gross Margin s might remain where they are, and we will probably see the benefits of operating leverage to drive EBITDA margins moving forward. Yeah, Taran, what is that? You're talking about Europe or? Europe. Europe, Europe. Sorry. Okay. Subra, I'll just go ahead. There are two parts to this. First is that the Gross Margin also is fluctuating because of the mix of the country. There are different business model, where there are higher gross price, and then we give discount, and then we achieve the net sale. There are certain tenders where there is a straightaway, you know, sale is the price is quoted. Actually, the Gross Margin both the businesses will be different. It is slightly fluctuating, ±2-3% of Gross Margin will be affected. Overall, you are right. We are looking at operating leverage because of our broad product portfolio, which is expanding. At the same time, we have a very good positioning with the customer. When there are gaps in the market from competition, we should be in a better position to capitalize on that. Having said that, we also have some shortages, but I think overall we have managed better than the competitors. Going forward, I would look at operating leverage much better than just Gross Margin expansion. Okay. Thank you. Thank you. We can close, Sanjeev. Yes. If there are no more questions. Yes. As there are no further questions from the participants, I now hand the conference over to management for closing comments. Thank you all for joining us on the call today. If you have any of your questions unanswered, please feel free to keep in touch with the Investor Relations team. The transcript of this call will be uploaded on our website, www.aurobindo.com, in due course. Thank you and have a great day. On behalf of Aurobindo Pharma, that concludes this conference. Thank you for joining us, and you may now disconnect your lines and exit the webinar. Thank you. Thank you.