Ladies and gentlemen, good day and welcome to Cipla Limited Q1 and FY 2027 Earnings Conference Call. We have with us today Mr. Achin Gupta, MD and Global CEO, Mr. Ashish Adukia, Global CFO, Ms. Diksha Maheshwari, Head Investor Relations. As a reminder, all participant line will be in the listen-only mode, and there will be opportunity for you to ask question after the presentation conclude. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Diksha Maheshwari, Head Investor Relations. Thank you, and over to you, ma'am. Thank you, Danish. Good afternoon, and a very warm welcome to Cipla's Q1 FY 2027 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 statement, whether as a result of new confirmations, future events, or otherwise. I hope you have received the investor presentation that we have posted on our website. I would like to request Achin to take over. Thank you, Diksha. Good afternoon to all of you, and we appreciate you joining for our Q1 FY 2027 Earnings Call. I'm delighted to share that we have delivered the highest-ever Q1 revenue, with revenues of INR 7,100 crore in this Q1. Achieving a record first quarter provides a strong start to the year. It reinforces the resilience of our business fundamentals, the diversified nature of our business, and it strengthens our confidence in sustaining long-term growth. Coming to the business-wise performance, our One India business achieved its highest-ever quarterly revenue with 12% YoY growth, reflecting a strong performance across key therapies and underscoring the strength of our franchise in the IPM. Within this, the branded prescription business continued to witness strong momentum across chronic portfolio, delivering a market-beating growth of 15.4% during the quarter as per IQVIA data. Key therapies registered strong double-digit growth. Respiratory grew at 15%, anti-diabetes 43%, cardiac 20%, and neurology at double digits, as per the IQVIA data for the quarter ended June 2026. This performance was driven by a strong volume expansion, sustained brand strength, focused field execution, and continued momentum from new product launches. Our overall chronic mix strengthened this quarter to 60.4% YoY. We added two new brands to the 100+ crore INR club, taking our total to 33. Our presence in the IPM's top 300 brands remains strong with 23 brands, reinforcing the depth and resilience of our portfolio. Purocort, which is our flagship inhalation brand, continued to strengthen its leadership position as the number one respiratory brand in the IPM while sustaining its status as an INR 1,000 crore-plus franchise. Cipla continues to be the largest pharma company in terms of volume and the only player with 2 billion-plus unit sales in IPM as per IQVIA MAT June 26. Our new launch momentum also remains strong, with a number of targeted introductions across key chronic specialty and wellness segments. In respiratory, we've strengthened our portfolio with Duolin Synchrobreathe, a breath-actuated inhalation platform designed to enhance ease of use and adherence. Bilafav M for the management of allergic rhinitis and associated symptoms. In the obesity segment, following our entry into the segment through our collaboration with Eli Lilly for Zepbound in the previous quarter, the brand has continued to witness encouraging traction and delivered a strong performance during the quarter. In immunology, we launched upadacitinib, significantly strengthening our presence in chronic inflammatory and autoimmune disorders and enhancing our ability to address patient needs in a rapidly evolving specialty segment. Vy-Fil, which is our nasal hygiene range, broadened our supportive care and wellness portfolio. Collectively, these launches reinforce our commitment to addressing evolving patient needs and deepen our brand presence in high-opportunity chronic therapy areas and further strengthen the breadth and competitiveness of our portfolio. On the trade generic side, our business delivered a healthy growth during the quarter on the back of vigorous execution in distribution and new product launches. Expanding our portfolio remains a key growth driver, with three new launches this quarter addressing specific patient needs. Our consumer health business continued its upward trajectory with Nicotex, Omnigel, and Cipladine consolidating their respective number one positions in the segment. The business is driving healthy secondary growth and actively exploring opportunities to invest in products and channels to further expand our distribution. Operating profitability improved during the quarter, reflecting the strength and scalability of the consumer health strategy. In North America, we delivered quarterly revenue of $162 million. Cipla continues to hold the number one position in the overall U.S. albuterol MDI market this quarter, with our market share standing at 21% as per IQVIA data for the week ending June 26, 2026. One key highlight for the quarter was the successful launch of generic Ventolin in the U.S., following regulatory approval, which was received last quarter. We have commenced commercial shipments with volumes expected to increase as the supply scales up. During the quarter, we further strengthened our portfolio with the launch of nintedanib and dapagliflozin, in addition to some of the more recent launches like liraglutide, which is expanding our presence in high-growth therapy areas and advancing the execution on our pipeline. Looking ahead, we expect North America business to continue its sequential growth trajectory during the year, supported by the upcoming product launches and continued commercial execution. More detail from the U.S. pipeline. As we mentioned earlier, our pipeline for the remainder of the year includes four significant launches comprising three respiratory assets, including generic ADVAIR and a key peptide opportunity as well. Two of these three respiratory assets have been filed from our U.S. manufacturing facilities, while the third has been filed from our Goa facility. These launches are expected to strengthen our portfolio, enhance our respiratory leadership, and also help us support a sustainable long-term growth in the North America business. Coming to South Africa, in the private market, we achieved strong secondary growth of 6.5%, outperforming the overall market growth of 5.7% as per IQVIA MAT May 26. The business continued to strengthen its position through solid performance in key therapies and successful new launches, reinforcing our presence across diverse markets. In EMEU, we continued the growth trajectory with a 5% YoY growth in USD terms. This was fueled by execution across both DTM and B2B segments. Our continued focus on deep market penetration has laid a strong foundation for sustained growth. Notably, we maintained margin stability while effectively leveraging internal pipeline assets, demonstrating the strength and agility of our operating model. On the regulatory front, during the quarter, U.S. FDA completed a routine GMP inspection and a PAI at our Verna, Goa facility, and subsequently it was classified as VAI. During this month, the U.S. FDA concluded a routine GMP inspection at InvaGen facility in N.Y., which concluded with one Form 483 observation, which we are committed to addressing within the stipulated timeline. We are also expecting the re-inspection of our Indore facility to take place anytime soon. I would like to invite Ashish to present the financial and operational performance. Thank you, Achin. I would like to now present the key financial highlights for the quarter. We reported a quarterly revenue of INR 7,119 crore with a 2% growth YoY. There has been change in the presentation of the financials, which I would like to highlight. Effective this quarter, beginning April 1st 2026, the company presents certain marketing and proportional expenditures as a reduction from the revenue instead of operating expenditure. The same has been highlighted in the note to the consolidated financial statement. You may refer to note number nine. The EBITDA margin, excluding the other income, stood at 16.7% for the quarter. As for practice, the EBITDA margin does not include the other income. The reported gross margin after material cost stood at 62.5%. It's incorporating the impact of the product mix, certain war-related costs, some inventory-related charges, and phasing of certain incentives. The total expense for the quarter stood at INR 3,260 crore, reflecting an 8.3% increase over the previous quarter. This increase reflects our planned investment in upcoming product launches and enhancement of manufacturing readiness. We remain focused on innovation and future readiness. R&D investments for the quarter were INR 486 crore or 6.8% of revenue, directed largely towards the product filing and key development programs. Profit after tax for the quarter stood at INR 789 crore, representing 11% of sales. ETR for the quarter stood at 27%. Our free cash flow generation and operating efficiency continue to drive the healthy net cash position. As of June 30th 2026, the debt on our balance sheet, including lease liabilities, stood at INR 600 crore, with net cash equivalent balance at INR 9,494 crore. This was after the dividend payment that we made this quarter of INR 1,050 crore. Looking ahead, our key priorities will include, for One India, the aim is to focus on execution to sustain the growth momentum and outperform the market in branded generic, trade generic, as well as consumer wellness. We will further strengthen our presence in chronic therapies while maintaining the robust trajectory we have built in respiratory. In North America, we will remain focused on driving growth through new product introductions, including the key launches highlighted by Achin. In South Africa, our focus will be on continuing to grow faster than the market in the private sector. In EMEU, the top priority is to drive top-line growth while maintaining a strong margin trajectory. Lastly, before I hand over to the Q&A, as I transition into new role, I would like to thank all of you for asking perspective questions over last four years. I would also like to welcome Dinesh Jain as the new Global CFO. He's been with the company for almost 30 years plus, and he's sitting right next to me to take any questions or anything. Over to the moderator now for Q&A. Thank you. Thank you so much, sir. Ladies and gentlemen, we will now begin with a question-and-answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Saion Mukherjee with Nomura. Please go ahead. Thanks for taking my question. Can you talk about the accounting change that you mentioned? How has that impacted your growth rates, if you can quantify for the branded markets, particularly India and South Africa? Sure. See, I think if you go through the note, Saion, you'll find the numbers mentioned out there for the previous YoY quarter as well. You'll be able to calculate the growth, and the growth would be somewhere around 4% if you just adjust for the previous year number as well. Yeah, that's right, Ashish. You reported 2%, adjusted is 4%. I would assume the change would have impacted mostly the branded market. I just wanted to understand, like 12% growth in India and - 5% that you reported in INR terms in South Africa. Is there an adjusted number for these two markets at least? Sure. Without breaking it down into the markets, there are primarily two only. Largely, it's on account of adjustment in South Africa. Okay. In India, the business has delivered 12% growth. In this quarter, you had tirzepatide plus the Pfizer brand distribution and one small acquisition. Excluding these, can you just tell me what the growth rate is overall in India? Saion, Achin here. Yeah, Achin. On India, if you see the IQVIA data, we were at 15.4% on the RX part of it. Within that, as per IQVIA, approximately INR 80 crore was from Yurpeak, right? I think that's what approximately 1.5% is attributable there. The rest is on account of the business. Some of it was licensed products, but good healthy growth rate on all the rest of the base portfolio as well. That we've been now seeing for three quarters, there's a momentum that's building up in terms of steadily delivering double-digit growth. Okay. Based on the disclosures that you made, I'm arriving at somewhere in that range of 7%-8% year-on-year growth. Is that a wrong assessment, you think? We've not broken down each of the three verticals, but I think IQVIA will give you more or less a detailed perspective. Also, some of the ILD becomes based over a period of time, right? Okay. That's part of our strategy. We keep ILD within a certain percentage. It's not very high, but it's between 10%-15% of our total business. Okay. This other question is on South Africa. See, because the currency has also been quite favorable, it's almost 23% on a year-on-year basis. Even if I were to sort of ascribe all that accounting change to South Africa, I just get 13% growth. In constant currency, it seems your private market as well as tender has declined on a year-on-year basis. Is there something happening there if you can throw some light that we need to be aware of? See, I think tender business has indeed declined for us. That is one of the impacts that is there. On the private market, there has been a growth and there is, of course, currency impact as well, which we had hedged. I think it's a multitude of impacts that is sitting out there in South Africa. Private market has grown faster than the market out there. As I had highlighted in the speech as well, that we achieved almost 6.5% growth in the market, in the secondaries, outpacing the market growth of 5.7%. Yeah, that's what I think. In the secondary it's visible, on the reported number it isn't. That's what I was wondering. Yeah. The tender component is lesser, that is why. Okay. Thank you, I'll join back. Thanks. Thank you. Our next question comes from the line of [Parth Soura] with [audio distortion] Asset Managers. Please go ahead. Hello. Yes, Parth, you may please proceed. Parth, I am sorry to interrupt you, but your voice is breaking. Parth, you may please rejoin the queue, but your voice is breaking, you can rejoin the queue. Our next question comes from the line of Surya Narayan Patra with PhillipCapital. Please go ahead. Surya, you may please proceed with your question. Hello. Surya has left the queue. Our next question comes from the line of Damayanti Kerai with HSBC Bank. Please go ahead. Hi. Thank you for the opportunity. Just want to hear some update on the awaited launch for the U.S. market. You mentioned we are going to have three more assets on the respiratory side, including ADVAIR, and one peptide asset. If I remember correctly, last call when we had discussion on the upcoming launches, you mentioned you were anticipating four peptide products. Has there been any change on that part? I think if that's the case, do you still maintain your $1 billion EBIT run rate for U.S. segment for FY 2027? We are seeing three respiratory launches, which are significant, in addition to the Ventolin approval that we've got, and one peptide which is large. There are others which we've already launched, like liraglutide. We've launched both the variants. That's doing well for us. There are other peptides and other products which are in the approval queue, but we've been highlighting the three respi and the one peptide which are more significant out of the pipeline. The approval of these will give us a line of sight towards that $1 billion exit rate. You started the year with $162 million sales, but in the consequent quarter, you think you can cover up enough to reach that $1 billion EBIT rate. That remains unchanged. I think the way to look at it is growth from new products, because the base is not large enough to provide that kind of data. The new products are pretty large. Basis these successful approval and launch of these and the scale-up of Ventolin in the coming quarters, we will be able to get that visibility. Sure. Similarly, if you can comment on your earlier guidance for the EBITDA margins of 18.5%-20% for FY 2027. Any change there? It again remains broadly unchanged? Yeah. broadly unchanged, Damayanti. Okay. My last question is, the recent inspection of the New York facility, will that be any way tied to any of the upcoming launches for the U.S.? You just got one observation, nonetheless, if there is some delay in clearing that observation, will that hold up any of the upcoming launches? Only the smaller ones. That unit does solid orals. Those are not the biggest launches. Not part of the three respis that we spoke about. Those have already been inspected. Okay, great. Thanks. I'll get back in the queue. Thank you. Our next question comes from the line of Vishal Manchanda with Systematix. Please go ahead. Yeah. Thanks for the opportunity. On your gross margins, you highlighted certain inventory write-offs in your opening comments. Can you talk about that? How much was that? Also quantify the impact of the inflation on the gross margins. Sure. I think when you meant inflation, you mean to say that whole war impact that we're talking about. I think overall, if you look at it as per current estimate, it's very difficult to g ive a very firm guidance out there because the things are evolving. If you could assume about 1%-2% of revenue in that kind of a range for the overall cost impact due to war. In case of the other question that you had, the inventory charge, et cetera. We have that for various reasons, either it is close to expiry or if we have ordered, but the demand has not taken off or if there is any quality issues, then we charge off that inventory, which is very typical in pharma. There has been a little higher than a normalized that we budget for and that is why I called it out that there is a one-time kind of an inventory charge that is there. Would this be 100 basis points, a lower number? Quantifying this all sits as part of ops and amongst other provisionings that we take. Yeah, I called it out because it is slightly higher than the normal write-offs that we take. Okay. On the incentives, do you kind of put that as part of operating revenue or you deduct it from the COGS? Yes. The PLI and our export incentive, that's other operating income. Yeah, export area incentive. The area incentive, sorry. Dinesh just corrected me there. That area incentive is now over, so it was sitting in the base and not now. PLI, this year we are accruing it as we achieve the sales of our PLI molecules. That's why in this quarter there is almost no PLI, but it will come in a phased manner into the later quarters. Got it. Just one on the U.S. Ventolin, when do we expect a full ramp-up there? Yeah, that work is ongoing. We've started supplying at the current scale. I think that will go towards the end of the financial year. Will there be a gradual ramp-up or we'll kind of be steady for some time and then It's a mix because one would start manufacturing at higher scale, sell it when all the approvals are in place. Okay. More towards the end of this year, we'll see a ramp-up. Is that Yeah. Got it. Thank you. Thank you. Our next question comes from the line of Bino Pathiparampil with Elara Capital. Please go ahead. Hi, good afternoon all. Just a couple of follow-up questions. First, on South Africa, I assume you replied to a question that the decline in revenue is because of loss of tender. Just wanted to know, is this the first part of loss of tender? For the next three quarters till this annualize, should we assume that there will be a dip in reported revenue because of this? I think a tender, how you have to see it is that when we look at tenders, it needs to be accretive to our margins, accordingly, we bid for these tenders. Unfortunately, last year we lost a tender which has a supply class that is impacting this year. In the coming quarters also, there'll be that continuation of that impact that will come through. Yeah, you will see continuing impact of tender in South Africa. Private market, like I said, including OTC, is growing faster than the market. Due to a lot of currency fluctuation, some of it is not getting reflected, but it's a smart growth out there in South Africa, private market. Got it. Just one follow-up on the U.S. as well. This quarter you have reported about $160 million. Your exit target of $1 billion means $250 million a quarter or roughly $90 million more per quarter. If I annualize it, you have to have products which can give you $360 million a year. The current products which you have mentioned, are you confident they can annualize to $360 million, which is much more than you made in even REVLIMID? Yes, these are all very sizable opportunities. I think that's how we are looking at the buildup. This assumes the competitive position that exists today. Obviously that is one assumption. From what we see today, we see large opportunity on this. Yeah, I think we don't expect that competitive position to change in the next nine months. Understood. Thank you. Thank you. Our next question comes from the line of Shashank Krishnakumar with Emkay Global Financial Services. Please go ahead. Hi. Thanks for taking my question. My first one was on the consumer wellness growth in India. I think you mentioned that the accounting treatment adjustment impact was largely in South Africa. Consumer wellness last year, 1Q, we were at INR 470 crore, and this year, I think we are at around INR 480 crore. Growth there has also been a bit muted. Are there any other factors which have impacted growth in this quarter? See, I think, the last quarter had a very good growth in the consumer business. I think the base itself was fairly strong. That's why in a YoY basis, you see a growth which is not as high as typically what you would see in CHR, in consumer business. Yeah, I think there are two components to this, how we present the consumer. One is the consumer internationally, which is mostly in South Africa. The piece that Ashish explained is the consumer in India. Yes. On the South Africa also, there may be an impact of that presentation. In South Africa, there is impact of the presentation change that I talked about earlier. Adjusting for that, South Africa had their normal good growth in OTC. Got it, sir. Secondly, can you call out the growth in the trade generic business in India this quarter? Was it in double digits or no? No, we don't give the breakup of the three segments. Overall, India is at a 12% growth and trade generic is also fairly healthy. Got it. If I could just squeeze in one more. I think our InvaGen Unit 1 facility was inspected in February, and I think we had two observations. This was linked to ADVAIR. Have there been any follow-up queries post that inspection, or is your filing broadly there in terms of getting past the finish line? It is on track. On that kind of inspection, ultimately, you will see the approval, right? Interim, there is not much to read into it. We are expecting approval to come on that, which should happen anytime. Got it, sir. Thank you and all the best. Thank you. Our next question comes from the line of Surya Narayan Patra with PhillipCapital. Please go ahead. Thanks for the opportunity. Sorry, I'm sorry, again, your voice is breaking. If you are wearing Bluetooth or headset, can you just remove that? Is it all right now? No, sir. I guess you're not in network, sir. We are not able to hear you. Okay, I'll come back then. Sure. Our next question comes from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, thank you for the opportunity. Just first one on the Yurpeak, you called out about INR 80 crores in quarter one. Sir, how are we looking at that overall anti-obesity kind of a market? There are confusing or divergent signals, especially from semaglutide generics as well. What explains the strength, and how are you looking at prescription behavior, and what do you think is the prognosis from here on? See, our bet has been fairly clear. We wanted to work with innovative product, which has dual mode of action, two receptors. We've invested behind tirzepatide. Our understanding is that this is a high involvement therapy, it's not just a straightforward sell. Patient, prescriber need to have lot of connect, guidance, and the condition needs to be managed properly for the right outcomes. Right? We are following that, plus we're expanding the distribution reach, and there's a lot of work that is happening to get the right benefits for the patients. Right? That is helping us grow. We have reached number two in the whole category. After Mounjaro and IQVIA, Yurpeak is the second-largest brand. Generics is a different piece because this is not only a price-driven market, right? Ultimately, for that matter, for any therapy, the patient cares more about outcomes. There is crowding also in that market. There may have been other issues. For us, we see these different segments coexist, and we see good opportunity for us to keep growing as more patients get into the fold and also the comfort builds up in terms of prescriber and their ability to see which patients are eligible and how do they manage their conditions. We are seeing a progressive growth despite all generics, and we are expecting that to continue on the same growth trend. This data point, how was Q4 for the INR 80 crore? Any direction there? It has been growing month-on-month, so it was quite small on IQVIA reflections in Q4 of last year. How much was it? Yeah, it has been growing. Got it. Second question is on your cash pile, right? Close to more than $1 billion equivalent. What are the ways that we are looking to utilize this cash? You've already paid a dividend, maybe more is coming, but just want to understand what are some of the capital allocation priorities for that cash pile. From what we had mentioned earlier in the last quarter, it remains the same where we've increased our CapEx, which is going towards organic growth. We are focusing a lot on R&D, biosimilar on organic side. We are looking at some very differentiated portfolio, either to acquire or to in-license as well. In-license also requires sometimes upfront to be paid. There is some capital allocation going towards that. We continue to look at M&A opportunities, both for U.S., for certain differentiated products, also Europe to develop some of this deep market. We've been fairly conservative on our approach on these acquisitions, therefore you've not seen many. We're constantly deploying small capital towards many such initiatives that I talked about. This will continue, if we find any larger opportunity, of course, we will come back to you. Got it. Just last housekeeping, again, back on the U.S. billion-dollar guidance exit. Should I be looking at it INR 250 per quarter or should I be looking at INR 80 per month? Which would be more the right one to aim for? It depends on the timing of new launches, like Achin said. That's how we should look at the guidance. Okay. Thank you. Thank you. Our next question comes from the line of Vivek Agrawal from Citigroup. Please go ahead. Yeah, thanks for the opportunity. Just one question on gross margin. You mentioned that this quarter has been impacted by some higher than expected or normal inventory write-offs. I just want to understand how to look at gross margin trajectory in coming quarters, and if you can also help us understand what can be the right number or approximate number to work with for FY 2027 as far as gross margins are concerned. Thank you. Sir, see, this is not a significant impact as it's been seen that I think the significant impact still remains as the product mix. Okay. If the product mix remains same, then you can expect this margin to continue. We're anyways looking at always ways and means to improve the margin. It was just more of an explanation around the movement in the margin. As we go towards quarter three, like typical, our recipe mix will increase, and that will help us with the margin even getting better from here. Yeah. Just to add to that also, what we had mentioned was that these new products that we're talking about come with healthy margins, right? Ultimately, what we are making up for in corresponding period last year, they all had high margins, so it will get substituted as the new pipeline kicks in with good, healthy, high margins. Yep. Our EBITDA margin guidance is also predicated on the launches and the margin improvement. Understood. One question is on Ventolin as well as one peptide product that you classify as a large product. Two questions related to these two products. One, what kind of the competition you see in these couple of products, let's say, if you are there in the market for next one year? Second, what kind of the fair market share you are capable of to achieve in these products, let's say, once the products are matured. On Ventolin, right now we have the CGT. We have exclusivity for six months. We are not aware of competition at this point in time. We will capture all the generic share till the point that competition comes in. After that also, we would not expect it to be highly crowded because of the complexity of this development itself. Similar case for the peptide as well. We have a very good chance of being the first and potentially being the only one. Understood. In these products, is it fair to assume that you can, given that the kind of competitive dynamics that are there at play, you can get, let's say, around 40%-50% kind of market share once the products are there for one year? Sorry. Could you repeat the question? Yeah. Again, just a question around market share. In these two products, given that you may be for a time being, the only player to be there in the market. Is it fair to assume that, can you take around a 40%-50% kind of market share in these products? Maybe in the next three, four quarters once these products are there in the market. If we don't see competition, yes, we can get there. We could even be higher. Once there is competition, you would have some advantage of being the first, over time, it moves to more proportionate or slightly above proportionate kind of market share. Yeah, if we are the only ones There's AGs in one of them, but once the pure generic comes, we have the ability to get the market share. Yes, sir. We've done that in the past, to see albuterol with so many players, we are holding onto a higher than proportionate share as well. Understood. Just one last question, if I can squeeze in. In respiratory, you talked about that two filings are there from U.S. and out of three products you plan to launch, two are from U.S. The one filing that you talk about that is only filed from India or contingent on India clearance. Is that the right way? Yeah, we mentioned that filing is from Goa, it's already audited and it's clear. Okay. Thank you. Super. That's from my side. Thank you. Thank you. Our next question come from the line of Tushar Manudhane with Motilal Oswal Financial Services. Please go ahead. Thanks for the opportunity. Just on this potential peptide product, the launch is subject to or contingent on any litigation or patent expiry or the product pure simple approval from U.S. FDA? Not really. This is a highly complex product, so the launch is mostly a function of overcoming all that complexity, not the other variables that you mentioned. Patent expiry is not the constraint per se. This is already off-patent product, is it? Thank you. Yeah, that's not the constraint. Sorry. We can launch as soon as we get approval. Yeah, it is off-patent product. Sorry, Tushar, you are not audible. I meant to ask, is it off-patent product? Is this a off-patent product or is it something where you have won the litigation and hence approval is pending? No, we said we can launch as soon as we get approval. I think, because we've not disclosed the name of the product, et cetera, we can't get into that exact detail. We are awaiting approval, and as soon as we get approval, we are ready to launch. Understood, sir. Sir, secondly, on the India side, if you could just share the number of MRs, and how do we intend to scale up over, let's say, next one to two years? At this point, we have approximately 12,000 people in the field force. For this year particularly, we're not looking at any significant manpower additions because we've added in the last two years. We're looking at more productivity initiatives and wherever required, we will reorganize in order to work within the same manpower strength. Got it. Sir, just lastly, in terms of IQVIA are you also experiencing the same in Cipla's acute portfolio? We lost you for a bit. Can you repeat your question? Sir, I meant to ask, as for IQVIA, in the acute therapies have shown a very strong pickup over last three to five months. Is the same getting reflected in Cipla's acute portfolio as well? Yeah. We are in line with the market. As we mentioned on respiratory, we have a strong beat on the market and also in some of the chronic, but acute, we are more or less in line. Got it, sir. Thank you. Thank you. Our next question come from the line of Abdulkader Puranwala with ICICI Securities. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. My first question is with regards to your billion-dollar revenue guidance. If I look at your current run rate of, say, INR 162 million, what you have done for this quarter, what we are basically talking about is close to, say, an addition of INR 400 odd million at least to happen with the four new launches. Within that, how should we look at products like ADVAIR where there is some significant contribution? Do you still perceive this product to be an INR 100 million plus kind of an opportunity now? No, I think that one has three or four competitors now, that won't be an INR 100 million. We have across this portfolio, and also Ventolin also will ramp up. We see this opportunity across these five products, right? Ventolin, the three Resp and the one peptide. We also have a bunch of other smaller launches, they will also contribute in a small way. They've started doing that, right? These are not the only products we're launching. A little bit will come from the others as well, which will add to the steady base. I think a lot of investments over the years have been made into these big-ticket products. This will basically drive some meaningful growth, which will lead us to that billion exit. Understood. Second one on lanreotide. Sir, any further development you would like to highlight with the same partner or on the site transfer process, where are you right now? Yeah. We are following a two-pronged approach as we speak. One is, Pharmathen has worked on a lot of remediation at their end as required by the U.S. FDA. Going back to the FDA at some point and asking them to allow resumption of lanreotide to the U.S. is one part. The other part is enabling another site through tech transfer, which is also happening as we speak, right? We are choosing a site in the U.S. to reduce the number of variables. Both are running in parallel. I think timing is a little bit fluid because both have dependence on the regulatory approval. I think as we get more certainty on this, we will guide towards it. At this point, we are not including that as part of our support projections. Got it. Thank you. Thank you. The next question comes from the line of Charul Agrawal with BofA Securities. Please go ahead. Charul, you may please proceed ahead with the question. There's no response from Charul. We'll move forward to the next participant. Hi- Next question comes from the line of Maulik with 360 ONE Capital. Please go ahead. Hi. Thank you for the opportunity. Just one question. As compared to 4Q, our other expenses have broadly come down. What is the reason for this cost control? Can you highlight something? It's broadly, if you see, in line with sales growth. There is, of course, we are taking measures to control costs, too, as well. It's basically a result of some of those initiatives that we are taking to it. Okay. Thank you, sir. Thank you. The next question comes from the line of Foram Parekh with Bank of Baroda Capital. Please go ahead. Thank you for the opportunity. My first question is on EBITDA margin. We are retaining the EBITDA margin from 20%, and which is subject to these new launches. Just wanted to understand, hypothetically, if we get delayed for these launches, what can be the EBITDA margin without lanreotide and new launches? I think our effort for the year is to focus on new launches and with the approvals coming through, based on that, we have budgeted our internal estimates of this 18.5%-20%. It's based on a plan. Of course, if there's change in the plan due to any reason, then there can be risk to this margin guidance, including that of new launches, what you said. Is there a threshold level beyond which we cannot go? If you can just guide us on the threshold level that we can look at. I think, if you see sequentially, between Q4 and Q1, you see some improvement over there. The idea is for us to grow all the rest of the base business is doing fine, and that growth also improves our overall profitability because expense base is more or less the same. Over Q3 and towards the end of the year with the winter season, those are typically bigger quarters for us. Naturally, there will be some improvements. We had factored in bigger improvement on account of the new products, right? That's how, particularly the U.S. business, that is highly dependent on new product launches. We have blended it. I think it would be kind of possible for us to put a floor. We are aiming for that ballpark, and that bracket is where we are aiming for, and that's where we would expect to drive the business. Sure. My second question is on the domestic side. Now our chronic portfolio has reached 60%. Again, here with the growth in Yurpeak, how do we see scaling up of chronic segment? Is there a level that we can quantify in next two, three years' time? Strategically, we are growing respiratory. That's obviously one-third of our total business, and that has chronicity within itself. Then we are focusing a lot on diabetes, cardiology, urology, dermatology. I think these are the segments that we're specifically focusing on to drive that chronic percentage up. In each of these, you are seeing in the last quarter a market-leading growth. As we continue that trajectory, we are gaining ranks as well. It will increase as a percentage of our total business. Like if you see diabetes, we were ranked 30+ four years back. Today we have a full portfolio from oral antidiabetics to the newest products which are launched and including the GLP, and insulin, and inhaled insulin as well. We've looked at it strategically. You would see that improvement over the coming two, three years in terms of larger share coming from chronic. Sure. If we have to put in a number, can we work out with 65% kind of as a first milestone to achieve for the chronic business within two to three years? That would be a little ambitious. I think we are also strong in acute, and that's a large base that sits out there, which will also keep growing, right? The whole focus is that new growth that we are adding from new products, et cetera, will be oriented towards chronic, and we want to go there and create that momentum. Of course, you can't ignore the strong acute that is sitting out there. Sure. Got it. Thank you. Thank you. Our next question comes from the line of Vivek Agrawal with Citigroup. Please go ahead. Thanks. For the follow-up question. If you look at the EBITDA margin this quarter, it's around 16.7%. The margins have fallen even below pre-REVLIMID level, right? Given that company have a strong India business, 50% of the business come from India, the margin doesn't look great, right? Just want to understand where we are bleeding. Is it like that U.S. business has turned loss-making after we lost the REVLIMID sales? Is it like that some of the other markets like India or any other market that is where I think there's kind of a dip in margins in the last couple of years. Just want to understand. Can you help me understand? I think the best way to look at it is, first of all, this is not our steady-state margin profile, right? We should not be comparing it as a steady margin. The reason why it is low is multiple things, which we've been talking about. One, a lot of the operating expenses to launch these new products are already been committed, right? Those are being incurred, whether it is manpower, facility, everything. The products are just coming through. They started to come through. You will see a sharp improvement there. Secondly, as we had mentioned, temporarily there is some impact of war as well, which is sitting in the numbers. It's hard to predict how long and that thing, but maybe 1%-2% is what we are absorbing at this point in time. Right? I think with these kind of things, this is more a transit phase for Cipla. Our expectation is with the new products, with facilities getting utilized, eventually the war situation will go away. We are also working on a lot of cost optimization and productivity initiatives at our end. We will see a gradual improvement in the margins in the coming quarters. Sequentially, that's what we will drive. Understood. When you talk about that launch-related expense, so it's like the products like Yurpeak, that is where you have spent significant amount of money? Or it's like even in the U.S., you are building up for launch-related expense even for some of the major products that you're talking about? Most of the margin is on account of the U.S. product and launches, because we have facilities which are there, which are staffed up, taking batches, ready to launch products. But the revenue you're not seeing yet because of the approvals. Even on R&D, if you see, we have slightly increased the investments. We are looking at this in a way that we can build sustainable growth in the business and a profitable growth in the business. Right now, what you saw last quarter and this quarter is not our steady state, is the point that we're trying to make. Understood. Just lastly, if I try to look at, let's say, a 22%-23% kind of EBITDA margin. When you can reach at that level, maybe is it 2028 or 2029? What would be the right timeframe? I think right now we would refrain from providing a guidance for next year. I think direction for us is, as we recognize that the current margin level is below our steady state, we will improve it, and we've already mentioned 18.5%-20% as the guidance for this year. You can expect improvements in the coming quarters. All right. Thanks. Best of luck. Thank you so much. Ladies and gentlemen, due to the time constraint, that was the last question for today. I now hand the conference over to Ms. Diksha Maheshwari, Head Investor Relations for the closing remarks. Thank you, and over to you, Diksha. Thank you everyone for joining in. If you have any further questions, please write it to investor.relations@cipla.com. Thank you. Thank you. Thank you. Thank you, team. Ladies and gentlemen, on behalf of Cipla Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.