Please note that this conference is being recorded. I now hand the conference over to Ms. Diksha Maheshwari from Cipla Limited. Thank you. And over to you, ma'am. Thank you, Yusuf. Good afternoon and a very warm welcome to Cipla Q1 FY 2025 Earnings Call. I'm Diksha Maheshwari from the Investor Relations Team at Cipla. Let me draw your attention to the fact that on this call our discussion will include certain forward-looking statements which are predictions, projections or other estimates about future events. These estimates reflect management's current expectations of the future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Cipla does not undertake any obligation to publicly update any forward-looking statements whether as a result of new confirmations, future future events or otherwise. I hope you have received the investor presentation that we have posted on our website. I would like to request Ashish to take over. Yeah, thanks. Thank you, Diksha, and good afternoon to all. Just. You know, Umang should be joining shortly, so in the meantime I'll just start off. Let me just touch upon some of the highlights of the quarter before I get into the details. Our branded prescription business grew by 10% year-on-year over a high base of last year with chronic share further improving by 106 basis points year-on-year to about 61.5% as per IQVIA MAT June 2024. The transition of the India trade generic business into a new distribution model is fully complete and it got completed towards the end of quarter one. The business is already back on its trajectory. Growth in quarter two. North America reached all-time high quarterly revenue of $250 million. We also launched the generic version of Lanreotide injection. During this quarter, South Africa prescription business continued to outpace market growth, thus consolidating its number one position as per IQVIA MAT May 24th. From our recent inspections at Patalganga and Kurkumbh facilities, the U.S. FDA has classified them as VAI. This further builds on our past inspections at our overseas facilities of InvaGen and China. I'd like to cover the performance in a little bit more details now, starting with updates on our performance in key markets. India branded prescription business grew at 10%. Like I said, adjusting for our GX model change. If you had assumed a normalized growth rate of trade generic, the quarter 1 growth in India would be close to about 9% versus the reported figure of about 5%. YoY we continue to outpace market growth in key chronic therapies. Respiratory grew by 9%. Growth for cardiac was at 11% while urology recorded a growth of 15% supported by improvement in chronic mix. We've been able to breach the revenue threshold of INR 12,000 crore in the IPM IQVIA MAT June 2024 performance of our big brands was one of the highlights for the quarter. Again in branded prescription we have added two new brands in the category of. Revenue over INR 100 crore. We now have a total of 24 brands in this category as per IQVIA MAT June 2024, which continues to lead IPM followed by our 20 brands in the IPM top 300. Through the transition of distribution model in the trade generic business, we have increased the direct touch points with the distributors. This helps us in deepening our channel connect with the help of retail task force which connects more than 150,000 chemists. Furthermore, the business is expected to generate operational efficiencies due to delayering of distributors. We have completed this transition at the end of Q1 FY 2025 ahead of our internal estimates. I would like to thank the business leadership as well as our partners for smooth completion of this process. While business has been slow in this quarter, we are already back on track to accelerate the journey through continuous expansion in its offering and reach to further consolidate its leadership position in the market in upcoming quarters. Our consumer health franchise posted a growth of 3% YoY due to high base and an exceptionally strong summer in the last year. Anchor brands of Nicotex, OmniGel, Cipladine grew to leadership position in their respective segments. The business continues to look for opportunities to invest in products and channel to bolster its distribution network. The operating profitability remains consistent in the range of 15%-16% and we expect higher growth quarters in the rest of the year. In North America we yet again achieved an all-time high quarterly revenue of $250 million by growing 13% over last year. Supported by positive traction in our differentiated portfolio in Albuterol, we have captured or rather recaptured our market share by gaining it by 4% in this quarter. Our market share now stands at 17% as per Acuvia week ended 21 June 2024. In our 505 (b)(2) asset of Lanreotide, we maintained our market share of 20% during the quarter. To enhance our Lanreotide franchise, we also launched its generic version which is the biggest peptide launches for FY25. The product continues to witness strong demand signals in the market. In South Africa we recorded strong double digit growth of 19% YoY in local currency terms led by private market. In private market our secondary growth was at a healthy 7.8% versus the market growth of 1.7% while our prescription business maintained its number one ranking as per IQVIA MAT May 2024. This growth was propelled by uptick in key therapies, new launches as well as significant growth in OTC portfolio, a key part of our global wellness agenda. Our South Africa OTC business demonstrated a growth of 19% during the quarter. Our big brands have been a key. Success to. Our success in this region with eight brands with revenues over ZAR 100 million. In addition to this, we have the highest number of brands in top 30, top 50, and top 100 with a generic segment as per IQVIA MAT 5/29/2024 our EM EU business delivered a healthy growth of 7% in USD terms with accelerated growth in DTM segment along with sustained overall margin. The business has also added China as one of its key markets during the quarter. Resolution of regulatory issues remains our top priority. Our Goa facility recently underwent reinspections by U.S. FDA. The facility was issued six 483 observations. Official classification is awaited and while at Indore our focus remains on remediation and implementation of CAPA. Coming to some of the key numbers, we reported a quarterly revenue of INR 6,694 crore with a growth of 7% driven by our core businesses of India, North America and South Africa. EBITDA margins excluding other income stood at impressive 25.6% for the quarter increasing by 154 basis points. Our EBITDA improved by 30% QoQ and 14% YoY and all these numbers let me clarify is ex QCIL both revenue growth that I talked about as well as EBITDA calibrated pricing actions in core portfolio across branded and generic market. Lower operating costs and favorable forex led to improved operating profitability. Reported gross margin after material costs stood at 67.2% for the quarter which is 226 basis points above last year's figures driven by overall mix change. Total expenses for the quarter include employee costs and other expenses which stood at INR 2,785 crore which is in line with the revenue growth. Our R and D expenses for the quarter are at INR 353 crore at 5.3% of revenue driven by product filing costs and development referral efforts higher in the quarter by 1% versus last year. The profit after tax for the quarter is at INR 1,178 crore or 17.6% of sales with effective tax rate at 27% free cash flow generation and operating efficiency continues to drive healthy net cash position. As at 30 June 2024, debt on our balance sheet is INR 547 crore, constituting lease liability as well as working capital. Our cash equivalent balance is touching close to about INR 9,000 crore. Key focus areas and growth levers in the subsequent quarters will include priority, for one, India would be to continue to grow ahead of market in branded prescription, swift recovery from momentary softness due to model change in trade generics while working on strengthening our growth levers for wellness portfolio including ramping up the recent acquisition of Astaberry in North America. Our focus would be on commercial execution, expediting the launches from our U.S. facilities and maximizing value from our launches in peptide portfolio. De-risking key launches for FY25 continues to remain our key priority in South Africa. Our focus stays at margin expansion in EMU. Our top priority is to maximize top line with focus and deepening penetration in core markets with sustaining the strong margin trajectory as guided. Our EBITDA for the year is trending in the range of 24.5%-25.5% and ROIC is well over 30%. I'd like to thank you and hand it over to the moderator for Q and A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity sir. Just on the gross margin front, is it to do with relatively lower RM cost or largely to do with the product mix? If you could explain it. Sure, sure. No, on gross margin it's mainly the product mix Q4 of last year, you know we had some tender products in there from CGA and other markets which were at a lower margin. So for a higher sales here we have a better mix due to which the material cost is lower. Mainly the factor of product mix. As a percentage or on an absolute basis. That remains largely stable. Quarter of that would have increased. So. Revlimid has increased quarter-on-quarter but you know, by some small margin. Yeah. Any thoughts on advertising post U.S. inspection? No, we don't. The inspection we have answered the queries and I think we hope to and put remedial action and we hope to hear soon. So the timeline as earlier guided, that change as you stand? No, as of now it's the same what we had talked about last time. So it's dependent on Goa. So when we hear back we have responded to all the queries. So when we hear back we'll have better clarity on the timeline. Thank you. That's it. Thank you. The next question is from the line of Kunal Dhamesha from Macquarie Capital. Please go ahead. Hi. Thank you for the opportunity. First one on the R and D expense. The R and D expense in this quarter seems to be quite subdued as compared to the last quarter. So do we expect the activity to pick up in the rest of the year and it is expected to higher? Yes, I think R&D activity will be higher. We will see a ramp up in projects I think because some projects had finished end of last year and early this year. That's the reason you are not seeing the uptick. But also remember that most of our clinical trials that happened last year are now over and the current ones that are ongoing are not as extreme extensive as the ones that we did earlier. So we will see an uptick in the coming quarters. Sure. Can you suggest any range for this full year for the R&D expense? We have always given a guidance of up to close, you know max level for us would be about 6, 6.5% of sales quarter-on-quarter but you could take 5%-6% as a good range for. All right. Sure, perfect. And on the Goa plant, you said that, you know, we'll share at the appropriate time, but what is the, you know, internal assessment then? Are you confident that we get the clearance without any inspection or do you think that there'll be inspection requirement once we complete our remediation measure? And are we currently employing any consultants, third party consultants for the plant IT? Management. Sorry, I was speaking and we were on mute. My apologies. Yes. So on Goa we have given various corrective and preventive actions. We have external consultants who are working with us who are experts in their field. In Goa we've been working with those experts for two years and in Indore for over a year and they continue to be with. They continue to be assisting us in our response and remedial measures. I think the FDA will come to its conclusion by end September. That's the time that we hope to hear from them further. Sure, sure. And then just from the U.S. product pipeline in terms of the two sites that we have, what is the update there? Have we got the approval or are we waiting for the approval and the launch will be imminent post approval. And secondly on generic Advair what is the update in terms of filing from the Indore plant? The ANDA filing? I think the batches are in progress. We should be shortly filing from our Indore site and the update on the peptide products? Yes, the moment we receive approval we should be launching these peptides. But I believe that the real launches will start only starting quarter three, quarter four of this year, not before that. Yeah, and to be more specific on Advair, we had, we maintain quarter four kind of a launch and maybe, you know, at best H1. We should be able to have half. One of calendar next year. Could be the potential launch period. Sure. Thank you and all the best. I have more questions, I'll go back to. Thank you. Next question is from the line of Damayanti Kerai from HSBC. Please go ahead. Hi, thank you for the opportunity. Ashish, one clarification. This Advair timeline which you have given, that's for launch or for filing from the InvaGen site in next calendar year? No ANDA filing will. So we will take batches now. The filing with the six-month stability will happen probably closer to December or January. Okay, so filing by end of this year or Jan and then like you will wait for the approval to come? Yeah, I would just say before end of this year we will be filing. Okay, that's helpful. My first question is in U.S. business so this $25 million delta which you have seen quarter-over-quarter was it more driven by the existing product pickup or Lanreotide generally played a big role there. The two, two big products made the difference. Lanreotide, the ANDA launch, the generic ANDA launch as well as the gain in albuterol market share, those were the two big contributors here. And then there was as Ashish mentioned a marginal increase in Lenalidomide. We expect our U.S. business quarterly run rate to be somewhere close to the $235 million-$240 million mark going forward. So we might have seen a little bit of the Lanreotide and up billing in this quarter. But the sustainable basis I think the sustainable run rate in the U.S. is $235 million-$240 million. That's helpful Umang. My second question is on very strong gross margins which you have explained earlier. Is this the sustainable rate and on back of very strong performance in first quarter do you have any plan to revise your EBITDA margin guidance for the full fiscal? I don't think we're doing anything on the EBITDA margin guidance, but I'll let Ashish clarify on the gross margin. Now on the gross margin, see I think it's also dependent on the product mix. So as the sales from some of the markets, tender markets kick in you'll see some margin dilution out there. So it depends on the product mix so to say. And then of course when the respiratory quarter picks up at that time margin will likely be similar levels. Broadly, you expect to see similar margins in coming quarters? That, should we understand? No, it can. You know what I'm trying to say is that tender business will pick up in the next three quarters. So there will be dilution to overall gross margin in that sense in Q3 when there's respiratory at that time there can be similar margin to Q1 but that's broadly what the trend would be. Okay, that's helpful. I'll get back in the queue. Thank you. Thank you. Next question is from the line of Surya Narayan Patra from PhillipCapital. Please go ahead. Thank you for this opportunity, sir, and congratulations for the great set of numbers. Sir, my first question is on the generic Liraglutide what we have launched. So if you can just qualitatively give some sense of how big this opportunity could be this quarter and what impact the branded antidiabetic would have seen because of this product. Because my understanding, please clarify that my understanding that the pricing of these two products would be meaningfully different. So if the generic version is seeing a kind of rapid progress in the way, the impression that I'm getting. So then what impact the branded version would have seen and how should one think progressively for this, for this equation in the subsequent quarters? Yeah, I think so. Look, the ANDA product was launched. See, overall, if you look at it, we are about 20%-22% share before the ANDA launch of the total market. The B2 has stabilized at this share, and now with the ANDA launch, I think the ANDA launch should hopefully add to this overall share. I think the ANDA also looks like any other product has a time to ramp up. It can't ramp up immediately. We certainly have been able to, you know, it's. It is less difficult to sell the ANDA comparatively compared to the B2 product because the B2 product has to take share. It's fundamentally a product which is not substitutable to the brand. So we will ramp up, and obviously these type of products also are dependent on supply. So like we had suggested a phased ramp up on Lanreotide we will also suggest, you know, we are also, you know, we are also stating that there will be a gradual ramp up for Lanreotide and as well. Okay, so have you seen any change in the prescription writing pattern by the doctors? Because two product in the different pricing. Of course for the prescriber the pricing will not matter. But anyways any change in the prescription pattern. See, there cannot be a prescription pattern change because the prescription pattern will still be around the Lanreotide prescriptions itself. You know, around the Lanreotide prescriptions itself. We have not seen any pattern shift because even before the ANDA entered there were two products in the market and the ANDA is substitutable to one of them. So I think there's not going to be any pattern shift in prescription. Okay. And just on the domestic formulation business with the transition process. So what was the actual implication and impact that we would have seen in this quarter? Whether any further continued impact that would be seen in the succeeding quarter or it is just a quarter of a transitioning quarter and hence whatever impact that. We are facing this time. I'll request Mr. Adukia to answer this please. Hello. Thanks. Thanks. See, I in the impact, whatever needed to be taken is there sitting in your quarter one. So now towards the end of quarter one itself by June we've had some pickup in the sales and normalization of sales. So I think we are back in our growth trajectory out there. I think, you know, this was a matter of also communicating and discussing with the channel partners on the change etc. So there's. There's always that little bit of a disruption that takes place. So that happened only in the first couple of months in May and June. So is it. Okay, so is it the nature of inventory adjustment and post the transition we'll have a better predictability about the inventory in the channel and the profitability? How should? Yeah, absolutely. It gets us closer to our customer. So we'll definitely have better inventory visibility and demand trend. We'll also start collecting more direct data rather than through, you know, the partner that we had. So all this will help us in better predictability and better penetration. And on the other hand, right at the end, at the chemist level we've also, like we've talked about in the past, instituted a retail task force which will also give us on ground market information and we'll be able to promote the products also directly at the chemist level. So this will give us better control over the channel and the data. Yeah. Yeah. Thank you. Thank you. Next question is from the line of Neha Manpuria from Bank of America. Please go ahead. Yeah, thanks for taking my question. Just to follow up on Lanreotide, you know the, the economics for Cipla is the same for the generic as well as the 505(b)(2) product. Right. So, you know, and given the prescription pattern does not change, is there a risk that the generic cannibalizes on the, you know, 20%-22% market share that we have with the 505(b)(2)? Is that something we should be worried about or am I thinking this incorrectly? In a market where NEHA supply is abundant, that could happen. But in a market where supply ramp up is very slow, it's unlikely that that will happen. Is this a strategy? Because we foresee generic competition in Lanreotide. So to some extent, you know, shields us from other competitor launching a generic Lanreotide. Would that be the correct way to think about this from a slightly longer term perspective? No, actually the issue is the ability to get adequate amounts of both the B2 and the ANDA product in the market. That is the first thing which is driving whether how much we can sell of the ANDA or how much we can sell of the B2. The ANDA and the B2 both come from the same partner. So you know, the capacity is shared and you know, post approval you have to file certain supplements, etc., to get the capacity up. So I, you know, right now it is dependent on that. But you know, if we go back to the B2, the B2 was launched almost two years back, I'd like to believe. Yeah, so it preceded the ANDA and that was a product that got an approval earlier than the ANDA. Okay. So no, there's no conscious strategy of trying to keep the market, you know, to create a 505(b)(2) then launch an ANDA and it's all dependent on what product was approved when, understood. My second question, you know, sitting on close to $1 billion of cash, how should we think about, you know, capital allocation for let's say slightly more medium termish growth? You know, what would be your focus areas if you have to allocate this capital in your balance sheet? Sure. So we are all, you know, continuously looking at strategic opportunities, both India as well as outside and mainly India. So I think that scanning continues and you know, in branded generics space in India we are very keen to grow in therapies where we don't have leadership. So we continue to look at both small as well as large opportunities. Outside of India in what areas? Would this be the usual OTC that you've done or some other? Are you open to even generic opportunities in the US? Not generic opportunities in the U.S. but in U.S. we would possibly look at it. It can be sterile injectable facilities. Which. We don't have and it could be on the specialty side, 505(b)(2) and you know, in licensing opportunities, those kind of things is what we would look. And in the U.S. So the U.S. will be more capability linked, which means it will come with the facility. The India piece will be more therapy and brand linked. We will also dedicate a little bit of our capital to innovation. Okay, and do we want to quantify this and what areas we could probably look at? Do you have anything in your pipeline? No. So for example on innovation we, you know we did an investment in Ethris. We, you know we would be happy to evaluate opportunities in other types of areas similar to cell and gene therapy, etc. But in capability buys it could be facility buys with some business and in brand buys, of course our track record unfortunately is not as stellar as we had wanted it to be. But we are part of every process that runs in India in terms of the branded markets etc. And wherever we find that there is going to be value out of the synergies we can bring, we will be bidding for those assets. Just to add to Mr. Vohra's comments on the size, you know, in innovation etc. It would always be a smaller sum because we played more in partnership or option value. But and when it comes to acquisition in India in Bandra, Chennai, that can be sizable. So just to give you a relative size comparison because you are. Yes, understood. Thank you so much. Thank you. Next question is from the line of Aman Goyal from Axis Securities. Please go ahead. Yes, this is Ankush Mahajan, sir. Thanks for the opportunity for the question. Sir, last quarter we have seen there is some data on your sub d side also that the price erosion has increase drastically. So would you throw some light on the price erosion, how things are in the market now for January, especially in terms of price erosion. See, again, price erosion like we've been maintaining is dependent on. So there can be a very wide range of price erosion if you look at product by product. So on an average on a YoY basis we could be about roughly around 10% or so. On a QoQ basis it will be more mid about 5%-6% somewhere around that kind of a range. But then again it depends a lot on product by product. So some of the product in one. Of our categories that we've seen. Few orals and very old product we've seen some large erosions which are more again contract based where new contract kicks in but in most of the other. So at a portfolio level it's about the number that I mentioned going forward we don't think that it will be. You know, touching double digit. So in. terms of Advair and AB, so I mean we had that where we are launching what of the absence of the target date, launching dates, launching time? It's conditional as we speak on Goa and of course getting it right in the third party facility so therefore it is difficult to give a timeline to it but if Goa clears then it can be fairly quickly. We have four more peptides in the pipeline. So any view on timeline itself? Yeah, no, no, sorry. Can you repeat? It's three peptides that we're talking about this year, so they'll be more likely to be in Q3, Q4 kind of a timeline unless Umang, you want to add anything? No, actually it's. I think the two we are expecting to launch two by the end of the year and the other two will follow in the one will follow the year after that and there will be another one which will hopefully come in either 2025 or 2026. So I think that is the guidance for the overall four peptides of which two belong possibly to you know related family of. So I think that is the guidance on the, on the peptide products. So. On peptides that we already launched, so any light on it, sir? The one type that we launched is Lanreotide and. Thank you for transformation. Thank you. Next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead. Hi, good afternoon. Most questions answered, just a couple of clarifications. In the next few months we probably. We'll see one or even two more players entering the Albuterol inhalation market. What are your thoughts around that? Do you think there could be another? Round of little price erosion, market share loss, etc. So it depends, it will depend on the category they enter in. So for example, you know, if they enter in right now I'd like to believe that the category that we are selling in is one of the lowest price categories on albuterol and the categories after that which is you know. The ProAir as well as the ProAir as well as the Ventolin they will be slightly more higher price than our category of Proventil. So it depends on what categories they enter in and my guess is that it will depend on which specific category they enter and what type of price decrease that happen there. But quite honestly, this is the market we've only seen increase when we launched into this market about three years back or four years back. The market size is about 58 million inhalers. We're now seeing this market at almost close to 60-70 million inhalers. So the market's expanding significantly as well and has continued to grow. So just those two or three things to keep in mind. Understood. Second question, on domestic market, you had. Done deal with Sanofi for the CMS products. Is the full benefit of that reflected in Q1 revenues? Yes, I think Q1 has the benefit of the Sanofi transaction or whether the full amount as what we had expected has come may not have been the full amount. But yes, it is in the numbers of Q1. Understood, thank you. That's it from my side. Thank you. Thank you. Next question is from the line of Aman Vij from Astute Investment Management. Please go ahead. Yeah, my first question is on our portfolio. You mentioned one, we have launched. Two more are expected in H2. One and then one is delayed. Is my understanding correct out of the fourth? No, no, it's not delayed. It's planned for launch later. Not all of them will launch at the same time. We are planned for launch later. Sure, sure. And this includes the osteoporosis product also. Sorry, which one? Osteoporosis product. I see. I can't. I'm not sure that we are public with our peptide categories and therapies, so I can't comment on that specifically. Sure, sir. Just out of this, any of the GLP-1 products we are launching this year? I don't believe that there will be a market where these products can be launched in this year. That's just my opinion as of now. But I think you may see some launches next year. But I'm not sure the market will form for this in the current year. And I'm assuming you're talking about the domestic market. No, both, sir. So I was not talking about the SEMA but the Liraglutide. Because that approval is coming sooner. So we don't have any product fallback for. Is your question specific to us or is it specific to India? No, no, for outside India. Yeah, yeah. So, yeah. So when I went GLP-1, I meant basically the new therapies of semaglutide and diabetes. That was my answer was linked to that with the formation of a market in India. And my beliefs currently is that I don't believe that market will this year in India. But on the other peptides. Yes, I mean as we have guided 2 and 4, you know, 2 leading to 4 over a period will happen again. I will not confirm whether it is, you know, an osteoporosis drug or a diabetes drug or a GLP-1. Sure, no worries. Second question is on the Lanreotide again. So on the generic side sir, so. We have like 20%-22% market share on the 505(b)(2). Can this also achieve similar market share or do you think this will remain a much smaller product for us? No, I think it will depend completely on our supply ramp up. You know, as we said there are two types of, you know, the capacities are similar for both and so as much as we can ramp up we'd be able to do it. But we see a gradual ramp up. I think the ANDA would be. Our general sense is the ANDA is because it's a substitutable product. It is something that can, that possibly can take more share but you know, it is completely dependent on the supply plan and the rand. Sure. Any word on the competition? I believe there are 2, 3 more and a filer. So when are you expecting the competition to come in for the generic version? We are not. We don't have much optic on that as yet. Okay, thank you. Thank you. Next question is from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thanks for taking my question on the U.S. business. The two peptides that you talked about for this year and the ones that you talked to, the two subsequent ones from a size and scale perspective, are they kind of similar to what the Lanreotide opportunity was for us? No, I think Lanreotide is a more significant opportunity dependent, of course, on the supply. But in terms of contract upside, of course Lanreotide is far higher. Secondly, you know, and on little is it fair to assume that this year, next year will have volume higher volume shares versus what you've sold in FY24? I think maybe marginally. Maybe marginally higher. That's what I, I don't know about next year but I can only tell you about this year is marginal. If I just take this forward, we've got a high base of Dulaglutide this year. Both the versions being there maybe as well as being there on this base. You know, does that base start to become a challenge for us? To grow at some point in time. How do we see that, you know, say a couple of years out? How do we grow on this? On the base of where a significant proportion is being contributed by these two products? I think that's a good question and observation. What typically will happen is base, whether it is linked with one product or two products or overall is a very difficult number in the US market because what happens is that the price erosion begins to impact your growth. So I think your question is more on the high base. I think that is a correct observation. But I'd also say at the same time that we have nano-paclitaxel, we have Advair, we have a couple of other respiratory products that we also hope to launch, which could be meaningful opportunities as well, as soon as we can launch them. So it really depends on how that progression happens for us vis a vis what is going to go off. Okay, thank you so much. Thank you. Thank you. Next question is from the line of Kunal Dhamesha from Macquarie Capital. Please go ahead. Hi. Thank you for the opportunity a gain. O n Lanreotide, my understanding was that the economics would be slightly better in ANDA vs. 505(b)(2). Is it a good assumption or would it be very similar to what we have in ANDA? Actually, see, we are not. The economics should roughly be the same. I mean there would be, you know, because the time window in which the products are launched is different. Right. And pricing gets reset quarterly or six monthly or whatever, depending on the type of product you have. So I don't think the, you know, the economics are that vague, that hugely different. But I'll request Ashish, if he can give a comment on this. See, they are both from same partner and partner products. So the contracts are slightly different in terms of share, etc. That you have of with the partner. The share that we have. So on that basis it is different, the economics, but then that's on the cost side. But like Umang said, on the pricing side also there can be some difference. Sure, sure. On the generic side, generic environment, there is a slight difference in terms of indication versus the innovative product. Right. So will it have any impact in terms of, you know, what we call a skinny label, generic, wherein you have to be kind of, you know, very sure that it doesn't end up with that indication which is not covered in our label? Is your question on Lanreotide? Lanreotide, yes. Yeah, yeah. There is. See there, the label itself will classify whatever the current product can be used for and what it can't be used. I think that is already taken into account by people who are using the product. Okay, sure. Thank you. And all the best. Thank you. Thank you. Next question is from the line of Krishnendu Saha from Quantum Mutual Fund. Please go ahead. Yeah, hi, thanks for taking my question. Most of them answered just what is the supply for Lanreotide? So I might assume that there's a supply constraint, there's manufacturing capacity constraint with your partners for Lanreotide, is it? Yes, I think you could make that assumption. I think the supplies will ramp up slowly and they are not. And you know this is approximately a 14,000 vials per month market now. So supplies will ramp up slowly. So right now we are manufacturing and Semaglutide slowly will ramp up. That's the way. And we are creating a couple of more in the basket. Just for my understanding, if you have a couple of more peptides, does it help in the peptide basket? Does it help in any way to marketing or pricing? I don't track in details but just thinking, does it really help? Because indications are different. Does it help? No, see, you mean help. If you mean the help from a market penetration perspective. Yes, obviously. Profitability. Does it make sense? Does it give you leverage? If you have 4, 5, 6 peptides in the basket, though they're dressing different therapies, so on and so forth, does it help? So it would help provided you are selling into the same channel in the market. So for example, Lanreotide goes to clinics and hospitals. Some of the other peptides may be retail sort of as well, maybe more doctor clinics. And therefore if we were to sell more, let's say more oncology, 505(b)(2)s that go to clinics and hospitals or we sell more ANDA products that go to more clinics and hospitals, definitely a basket would help in that area. But if it is a dispersed collection of therapies, then may not. Yeah, it's just a generalized way of doing business just on the Indian front. And Ivia Beaute we acquired, I suppose. Has that acquisition gone through and do we cost it in the business? What is the run rate? Any thoughts on any numbers you're throwing around? Sorry, on what product? I think you acquired a cosmetic and personal care business. Business, I suppose. Yeah, no, that's basically CHL's acquisition on the. So this, this is more cosmetic. Kind. It's a, you know, beauty business. Sunscreen and skincare, etc. It's a small business focused on, you know, regionally focused. Right now I think the whole idea is to leverage that brand, leverage their grocers' network to find synergies and to actually grow that business and take it to other regions as well. So right now it's just very, very early. So it's you know, over a period of time you'll see scale and synergy there. Still very smaller. The last question on the raw material cost price, do you see just. I know the product mix is better off, that's why the gross margins are better. But you see in general the material cost being lower compared to last year, is it the same? So material cost has been lower last year as well. It's more a factor of like I said, product mix. So there is, we have not seen any elevation or major reduction in raw material or packing material. Freight has slightly increased. That's about it. Okay, fine. Thank you. Thank you very much for your time. Thank you. Thank you. Next question is from the line of Sumit Gupta from Centrum. Please go ahead. Hi. Thank you for the opportunity. I have two questions. First is on the domestic side, so what is the current MR base and how do you, so do you plan to expand the MR base? Yeah, so we are at about, roughly about 8,500 now. We increased in quarter 1 2025. Sorry, we are close to about 10,000. After the increase, will be close to 10,000 people. Look, our strategy is to gradually increase this wherever we see pockets of growth. Okay. And so from the US side, so yeah, on the, or on the overall CapEx side. So how much do you plan to invest over the next two to three years? I'll request Mr. Vohra to please answer this question. Thanks, Gupta. See, our run rate has been about, you know, INR 1,000 crore to INR 1,200 crore. So I think that would be, that will go up slightly because we're looking at, see, we've had some CapEx in the U.S. Now for the de-risking, then we're looking at some more strategic CapEx in India mainly on the respiratory side. So all this will actually take it to possibly about INR 1,500 crore to INR 1,800 crore somewhere on. That kind of range. Okay. Majority, how much would be in growth capacity? It would be growth, although 70% would be about growth CapEx, and, you know, 30% is more compliance related, environment related. Okay, so this 18 so the incremental INR 5-6 billion which is going towards the CapEx. So this majority would be in U.S. or it would be 50-50 U.S. India? No, no, no, mostly it will be in India. CapEx is mostly in India. U.S. CapEx is not very very large because there you're just adding few lines. Right? Understood. Thank you sir. Thank you. Thank you. Ladies and gentlemen. That was the last question for today. I would now like to hand the conference over to Ms. Diksha Maheshwari for the closing comments. Thank you everyone for joining in. If you have any further questions, please write it to Investor Relations. Happy weekend. Thank you. On behalf of Cipla Limited. That concludes this conference. Thank you all for joining us. You may now disconnect your lines.