Ladies and gentlemen, good day, and welcome to the Quarter Two FY25 earnings conference call of Dr. Reddy's Laboratories Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Richa Periwal. Thank you, and over to you, ma'am. Thank you. A very good morning and good evening to all of you, and thank you for joining us today for the Dr. Reddy's Q2 FY25 earnings conference call. We have with us the leadership team of Dr. Reddy's, comprising Mr. Erez Israeli, our CEO, Mr. M V Narasimham, our CFO, whom we fondly call as MVN, and the investor relations team. Earlier during the day, we have released our results, and the same is also posted on our website. We'll kick off today's call with MVN taking us through the financial highlights of the quarter. This will be followed by Erez sharing his thoughts on operating environment and business performance, after which we'll open the forum for Q&A. Please note that today's call is a copyrighted material of Dr. Reddy's and cannot be rebroadcast or attributed in press or media outlets without the company's express written consent. This call is being recorded, and the playback and transcript shall be made available on our website soon. All the discussions and analysis of this call will be based on the IFRS consolidated financial statements. The discussion today contains certain non-GAAP financial measures. For a reconciliation of GAAP to non-GAAP measures, please refer to our press release. Before I proceed with the call, I would like to remind everyone that the safe harbor contained in today's press release also pertains to this conference call. Now, I hand over the call to MVN. Thank you, Richa. A very warm welcome to all. It is my pleasure to interact with you for the first time and present results for Q2 FY25. We delivered a strong performance this quarter with broad-based top-line growth and healthy operating margins, resulting in higher-ever quarterly sales and PBT. As you all know, we completed the acquisition of the Nicotinell portfolio and paid an upfront cash consideration of GBP 458 million. We also completed the transactions with Nestlé India on 1st August, and all business activities of the nutraceuticals portfolio are now being carried out through our subsidiary, Dr. Reddy's and Nestlé Health Science Limited. Following the completion, Nestlé India was allocated shares of the subsidiary, representing a 49% stake. We have also recently completed a five-for-one stock split following the approval from our board and the shareholders. Let's now look at the financial performance of the quarter. For this section, all amounts have been translated into US dollars at a convenient translation rate of 83.76, which is the rate as of September 30th, 2024. Consolidated revenues for the quarter stood at 8,016 crores, which is $957 million, and a growth by 17% on year-over-year basis and 4% on sequential basis. All markets contributed to this quarter's year-over-year growth. Consolidated gross profit margin stood at 59.6% for the quarter, an increase of 92 basis points over the same quarter of the previous year, and a decrease of 81 basis points sequentially. The year-over-year increase was primarily on account of an improved product mix and manufacturing overhead leverage, particularly offset by marginal price erosion in generic markets. The quarter-over-quarter decline was on account of overall mix change. Gross margin for global generics and PSAI were at 63% and 30%, respectively. The SG&A spend for the quarter was INR 2,301 crores, which is $275 million, an increase of 22% year-over-year and 1% on Q2. The year-over-year increase was primarily on account of investments in new business initiatives, building capabilities, higher price costs, annual merit increase, and certain one-time costs related to the acquisition of Nicotinell brand. The SG&A spend at a percentage to the sales was 28.7% and was higher by 138 basis points on year-over-year and lower by 87 basis points on Q2. Excluding the one-time acquisition-related costs, SG&A spend was at 28.1% of sales. We expect SG&A to be in the range of 27.5%-28% for the full fiscal. The R&D spend for the quarter was INR 727 crores, which is $87 million, an increase of 33% year-over-year and 17% Q2. We are developing robust pipeline of small molecules, biosimilars, and novel oncology assets through internal and collaborative efforts to drive future growth. The R&D spend was at 9.1% of the sales, was higher by 115 basis points year-over-year and 100 basis points Q2. We expect the investment to be in the range of 8.5%-9% for the full fiscal. The other operating income for the quarter was INR 98 crores, lower versus INR 180 crores last year due to one-time product-related settlement income in the United Kingdom in the same quarter of the previous fiscal. The EBITDA for the quarter was 2,280 crores, that is $272 million, an increase of 5% year-over-year and 6% Q2. The EBITDA margin stood at 28.4% of the sales and was lower by 326 basis points year-over-year and higher by 30 basis points in Q2. Excluding the one-time acquisition-related costs, as mentioned earlier, the underlying EBITDA margin stood at 29.1% of the sales. Impairment loss of INR 92 crores on intangibles related to a product in the main portfolio that was facing procurement constraints from its contract manufacturers. The net finance income for the quarter is INR 156 crores as compared to INR 123 crores for the same quarter last year. Profit before tax for the quarter stood at INR 1,917 crores, that is $229 million. PBT as a percentage of revenue was at 23.9%. Excluding the one-time acquisition-related costs and impairment charge as called out earlier, the underlying PBT margin stood at 25.7% of revenues. Effective tax rate for the quarter was at 30%. Pertaining to the amendments in the Finance Act 2024 resulting in withdrawal of indexation benefit, the company reversed a deferred tax asset of INR 48 crores created in earlier period on land. Excluding the impact of this one-time reversal, adjusted ETR for the quarter on the underlying PBT is 25.9%. We expect our normalized ETR to be around 25% for the fiscal. Profit after tax, but before minority interest for the quarter, stood at INR 1,342 crores, which is $160 million. PAT margin was at 16.7% of revenues. The non-controlling interest share of profit after tax for the quarter was INR 86 crores. This primarily includes the share of one-time deferred tax asset recognized upon transfer of Dr. Reddy's nutraceutical brands to the subsidiary. Profit after tax, excluding the non-controlling interest for the quarter, stood at INR 1,255 crores, which is $150 million. This is at 15.7% of revenue. Excluding the one-time acquisition-related costs, impairment charge, tax reversal, and non-controlling interest share as indicated earlier, the underlying PAT margin stood at 19% of revenue. Reported EPS INR 13.04. The EPS has been derived on the increased number of shares, post the stock split, and after non-controlling interest. Operating working capital as of 30th September 2024 was INR 12,066 crores, which is $1,441 million, an increase of INR 511 crores, which is $61 million over 30th June 2024. CapEx cash outflow for the quarter stood at INR 735 crores, which is $88 million. The free cash flow generated during this quarter was 204 crores, which is $24 million. Post-acquisition-related upfront payout, we have a net cash surplus of INR 1,889 crores in $226 million as of September 30th, 2024. Foreign currency cash flow hedges in the form of derivatives are as follows: $693 million hedged through structured derivatives around rate of 83.9-84.1 to the dollar, maturing over 12 months, which allows participation when USD strengthened, and INR 5,290 million with the minimum protection rate of INR 0.905 to the ruble maturing in next six months. With this, I now request Erez to take us through the key business highlights. Thank you, MVN, and very good morning or good evening to everyone who is on the call. Thank you for joining us this time. Our growth momentum continued in Q2 FY25 across all markets. It's translating into yet another quarter of highest-ever revenues and operating profits. The quarter witnessed two milestones in our journey towards building new businesses. Our venture with Nestlé for nutraceuticals products in India was operationalized in August. We also completed the acquisition of Nicotinell and related brands in the nicotine replacement therapy category in September. We continue to strengthen our presence in existing spaces by building best-in-class capabilities and commercial infrastructure to leverage our portfolio globally and by driving operational efficiencies. We remain focused on our core businesses of generics and APIs while also investing in our pipeline as well as growth drivers of the future in line with our strategy. Let me take you through some of the other key highlights for the quarter. One double-digit growth in revenues in Q2 at 17%. Two both reported EBITDA margins and annualized ROCE were over 28%. Adjusting for one-time expenses related to the NLP acquisitions, EBITDA margins were higher at 29.1%. Net cash surplus was $226 million. This is after making an upward payment of GBP 458 million toward the recently acquired NLP portfolio. Our subsidiary, Aurigene Oncology, announced promising results of phase I study for India's first trial for novel autologous CAR T cell therapy for multiple myeloma. Further, the US FDA approved the IND for AUR-102 and assets developed by Aurigene Oncology for the treatment of lymphoid malignancies. We have secured a marketing authorization from the European Commission for rituximab biosimilar for first such MA in Europe. We recently entered into voluntary license agreements with Gilead Sciences to manufacture and commercialize HIV treatment drug Lenacapavir in 120 plus countries. On the regulatory front, the US FDA classified three of our facilities as VAI. This included two of our formulation manufacturing facilities in Duvvada and Visakhapatnam, following the routine GMP inspection in May 2024, as well as our API manufacturing facility in Srikakulam, Andhra Pradesh, following their GMP inspection in June 2024. In August, the US FDA completed a product-specific pre-authorization inspection of our formulation manufacturing facility, FTO-SEZ-PU1 in Srikakulam, Andhra Pradesh, and issued a Form 483 with observations. They responded to the observation within stipulated timelines. In September, the US FDA completed a routine GMP inspection of our R&D center in Bachupally, Hyderabad, and closed the inspection with zero observations. Sustainability continues to remain central to our business strategy. Recognizing our focused efforts in sustainability, KPMG India awarded us their ESG Excellence Award in 2024 in the large scale pharmaceutical manufacturing category. Further, we are featured among the top 15 most sustainable companies 2024 by Business World India. Now, let me take you to the key business highlights for the quarter. Please note that all the reference numbers in these sections are in respective local currencies. Our North America generic business recorded revenues of INR 445 million for the quarter, with year-over-year growth of 16% and sequential decline of 4%. The increase in sales volume helped offset single-digit price erosion and additional generic competition in certain-based products. We launched four new products during the quarter and we closed the full year with 15-20 launches. Our European generic business recorded revenues of INR 63 million this quarter, with a year-over-year and sequential growth of 7%. The increase was largely contributed by revenues from new launches, partly offset by pricing pressure on certain of our products. During the quarter, we launched a total of eight products across markets. Our emerging market generic business recorded revenues of INR 1,455 crores in Q2, recording a strong year-on-year and sequential growth of 20% and 23% respectively. On a year-on-year basis, market share expansion and revenue from new products launches in rest of the world markets more than offset the unfavorable forex. We launched 22 new products during the quarter across various countries of the emerging markets. Within this segment, the Russia business grew by 27% year-over-year basis and 23% sequentially in constant currency. India business recorded revenues of INR 1,397 crores in Q2, with a double-digit year-over-year growth of 18% and sequential growth of 5%. The growth was primarily on account of additional revenues from the recently licensed vaccine portfolio from Sanofi and new brand launches. As per IQVIA, our IPM rank continues to be a 10. We have launched three brands this quarter in addition to integrating the nutraceuticals products under our subsidiary, Dr. Reddy's and Nestlé Health Science Limited. Our PSAI business recorded revenues of $100 million in Q2 FY25, year-over-year growth of 18%, and sequential growth of 9%. The year-over-year growth was primarily on account of improvements in volumes and growth in the CDMO business, which is also reported thereunder. We filed 22 drug masters globally this quarter. We invested 9.1% of our revenue to strengthen our R&D capabilities. Our R&D investment this quarter stood at INR 727 crores. Our efforts are focused on developing complex value-added products, including first-to-file generic injectables, peptides, and biosimilars, in line with our patient-centric strategy on enabling access and affordability. We have made 60 global generic filings, including two ANDAs for the US market during Q2 FY25. In addition to investing in our development pipelines, we continue to strengthen our presence in our core areas of business while also collaborating to build businesses in three areas: consumer healthcare, access to novel molecules, and digital therapeutics. We are also evaluating value-creating inorganic opportunities in existing spaces, as well as businesses of the future. We are certain that this strategic investment coupled with our sharp focus on improving efficiencies will enable us to deliver sustainable growth as well as profitability, and with this, I would like to open the floor for questions and answers. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to ask not more than two questions at a time and to rejoin the queue in case of incremental queries. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from Kunal Damesha from Macquarie. Please go ahead. Hi, thank you for the opportunity and congratulations on a good set of numbers. First, on the North America business, we have written that the sequential decline is primarily due to volumes. So sequentially, is it fair to assume that the pricing was stable? The prices are relatively stable in the way we normally calculate them. We did not have major issues on the big products that we normally discussed. As for the sequential, I will not take it too seriously. Part of it is a normal supply chain behavior that comes into inventory of the distributors or inventory of the retailers. We can definitely guide that we continue to grow in America on both the also on the base products as well. So I will not read too much into that. You'll see different numbers in the next quarter. Okay. And this declining sales volume, one you said is channel inventory adjustment. And could it also be some seasonal products not kicking in this quarter? Yes, so it was mostly about supply chain. There is no real decline. So there is no loss of market share or anything like that. Actually, people, we have a gain of market share. So I will not say too much about the sequential decline. I think the year-over-year actually reflects better the situation. Sure. And then the second one on the India business, we are posted around 18% growth. But let's say we remove the Sanofi vaccine business, would we be at the double-digit growth for our base business? It's almost there. It's 9 point something% even without the vaccine. Okay, so we have improved a lot. Almost there. Double-digit to low double-digit in this quarter. So, yeah, we are in the double-digit even without the vaccine. Obviously, we are well there. So, it's in the right direction. But it's almost there. Sure. And then do you think that this can again accelerate beyond what we have done in Q2 in the coming quarter? Given the launch momentum has been very strong, right? We have been launching a lot of products in India. Absolutely. So I have more questions. I'll join back with you. Thanks. Thank you. Thank you. The next question comes from Neha Manpuria from Bank of America. Please go ahead. Yeah, thank you for taking my question. My question, a two-part question, is related to the US business. Given we have seen a host of facilities being cleared, clearing inspection in the last few months, when should we start seeing while we are launching products? We have not really seen high-value launches from Reddy's in the recent times. So when do you think we launch certain of these limited competition high-value products for the US business? When do we start seeing that? And second, our R&D has stepped up a fair bit, but I did see our filing momentum has been fairly muted. So when does that R&D spend reflect in higher filing or higher quality filing, better filing, and therefore revenue? Yes. So on the first question, I hope that you'll see it all with Q3, but I cannot guarantee that it's about the ability to get approval. But we have a couple of those kind of products waiting for approval by the US FDA, and I hope already in Q3 we will see that. But let's say the remainder of the year, and for sure in April 2026, we should see a much better take on that. As for the filing of the R&D, we are primarily focusing on the what I call high-quality R&D in terms of we are not going for the 45 per year, but we are spending on the, let's say, more selective type of products, but with a higher value. And we are doing globally, not just in the United States. So every product is going globally. Plus, the investment in biosimilars, primarily the Abatacept. So this is where the R&D money is going to. I believe that it will actually there is a better yield and better improvement of the performance of R&D, and we should eventually see it also in the numbers. Got it, sir. And for the R&D spend, how much of this would be for biosimilars and the OncoAsset and any update that we can get on the timing for our two biosimilar filings? Sure, so out of the total R&D, 36% is going to both biologics as well as Aurigene. Aurigene is our innovative arm, and the rest, obviously, is going for the generics. The generics is about 50% of the number of the R&D, and 40% is attributed to the API, so this is give or take the price, but we have about biologics. I believe that the most important product we launch in the beginning of 2027, and this is Abatacept. And we have a couple of licensing activities that are not impacting the R&D, but will be impacting, obviously, the portfolio that we'll have. One of them is the Denosumab, and of course, this is on top of what we do now with the Rituximab and the Bevacizumab in Europe. We were supposed to file IND towards the end of this year. Are we on track of filing IND in the US market? Yes, so Europe is on time, and also the United States will be filed also by the end of the calendar year. Okay. Thank you so much, sir. Thank you. The next question comes from Amey Chalke from JM Financial. Please go ahead. Yeah. Thank you for taking my question. My first question is on Revlimid. So in the first half, whatever sales we might have booked for lenalidomide, you expect the sales to be similar in the second half, or you expect the lenalidomide to be on the lower side? I cannot speak about the sales of Revlimid per se because of the agreement. But let's say we are going to see that it will continue to be very healthy also in the remainder of the year and also in the second. Sure. The second question I have, if you can tell us about the preparation for the GLP-1 products for both US and ROW markets, which are going to face end expiry or where we are going to launch these products? So yeah. Sure. So first of all, on the overall question of GLP-1, it's a very important segment for us primarily because of focus on peptides, especially on the API side. So we identified close to, in addition to the Semaglutide, Liraglutide, etc., we are talking about 14 or 15 GLP-1 that are coming out. Obviously, those mostly will be with the patent expiry that will be in the next decades. But let's say we are going for the entire segment as we speak. Specifically for Semaglutide, we are planning to be on day one in all the markets that will be open and that we will have, of course, from regulatory standpoint, clearance to launch. And that's basically the plan, and we are ready with our internal capabilities on both API as well as our formulations. Sure. The last question I have on the spend, as GNS spend, excluding amortization or depreciation, have gone up sharply over the last two to three years. I understand we have a big opportunity in the US where we are generating good profits, which we are reinvesting in the business. But let's say post FY 26, you expect this GNS spend to remain elevated like this, or you expect some correction after? Okay. Indeed, we increased that SG&A over the years, but primarily because of the mix of markets that we have. We are focusing more on India, on emerging markets. And these are, as you know, very profitable markets for us, and they pay well also for those SG&A. So we are not investing. The level of the SG&A in the B2B markets is obviously lower. So part of the SG&A growth is also part of the mix of the markets that is changing, and it's actually changing in a healthy manner as well. In terms of the growth of the SG&A, it will be much, much more moderated. I would say slightly moderated, depends on the quarters and the years that we will discuss because, like you said, we had an opportunity to build that kind of a franchise and infrastructure in many, many emerging markets, and now it's well established. One caveat for that will be that we're naturally going in India for innovative products. We are licensing those products. Naturally, some of these products will require certain investments. So likely that we'll do them, but I don't think it will materially change the level of R&D, and it's not going to happen also very soon. So that's what we have to contend with. So I also just want to add, if you look at the objective one-time cost of this quarter for SG&A, it's 28.1% of the sales. And then we expect on a full-year basis, it will be in the range of 27.5%-28%. Sure. Thank you so much. I will join them. Thank you. The next question comes from Balaji Prasad from Barclays. Please go ahead. Hi. This is Kyla for Balaji Prasad. Thanks for taking our questions. We're just wondering how you can leverage a situation where Make in America for generics gets a stronger emphasis. And if you do increase manufacturing in the U.S., what would this mean for operating margin? Thanks so much. We are not increasing the manufacturing in the U.S.. The products that we are launching in the U.S. will be made outside of the U.S., primarily in India. If I got the question right, sorry. If I missed something, please. Thank you. Thank you. The next question comes from Harith Ahamed from Avendus Spark. Please go ahead. Hi. Thanks for the opportunity. My first question is on the Rituximab biosimilar for which we got an EMA authorization recently. So will you be able to share some color on the timelines for launch and our expectations from this particular product? And for the same product in the U.S., I believe we are awaiting clearance of our facility in Bachupally, which was last inspected in October 2023. So what is the status of that inspection? Do we have a final classification from the FDA? That's my first question. Yeah. So thank you for the question. So the European launch is planned for February 2025. And as for the U.S., we did submit a response to the US FDA, and obviously, we will wait for these approvals. Likely that it will be in the first half of FY 2026, but of course, it depends on when we will get the approval from the US FDA. Okay. On generic lenalidomide for which we've disclosed a 90% impairment this quarter. So can you share what% of the intangibles related to this product has been impaired? What I'm trying to understand is whether this product is completely out of our expectations or do we still expect some revenues from this product? So we have provided full carrying value because the existing contract manufacturing organization is unable to supply the product. Hence, I think we have provided 100% of the carrying value. Okay. Sir, last one, with your permission, the intangibles related to the Haleon portfolio acquisition, which I believe is around INR 5,500 crores, over what timeframe will we be amortizing this? I'm trying to understand the impact of P&L. So largely, around 20-plus years. I think currently we are just evaluating. I think it will be somewhere, I think, 22-23 years range. Okay. That's okay, my friend. Thanks. Thank you. The next question comes from Damayanti Kerai from HSBC. Please go ahead. Hi. Thank you for the opportunity. My question is on R&D. So you mentioned you are focusing on high-quality R&D. So can you just talk to us about the segments or products which you are working on? And do you think you can launch some material products in, say, next one to two years in the US market specifically, which can help you to cover up some sales lost on the Revlimid part? So that's my first question. So on the first half of the question, like I mentioned to Neha, about 50% of R&D goes to generics. This is primarily peptides and injectables, especially complex injectables. The biologics is going primarily on the pipeline that we have, but most of the money in the short term will go on the clinical trials for Abatacept. And then we have the investment in the next set of products for first-to-market, which will come later. This is on the API side, mostly GLP-1 type of the product and oncology products of Aurigene. So this is one. On the second part of the question, yes, there is a healthy pipeline of about 20-plus products of that nature that have relatively higher value. Of course, most of them are approval-dependent, so it's hard to know when exactly we will launch them, but we are ready for that, and they should contribute to that. And this is including, obviously, Semaglutide, in which there is a patent data. You asked before about that, which will be launched once there will be a market opening for this. Sure. My related question is, you mentioned peptides, GLP-1 is one of your focus segments. So I just want to understand, on the R&D part, I understand you are covering the entire product basket, which will open up in market in coming years. But on the manufacturing part, do you have in-house manufacturing capability, or you intend to get it done through some manufacturing partners? So we are going to make it in-house, both the APIs as well as the finished dose. And we are primarily dependent on our own internal capabilities. Okay. So mostly it will be done in-house, and maybe some parts can be done through external parties. Yeah, yeah. Absolutely. The part that is not done by us is the device. The device itself, we are not making. But the API, our main strength is on the API as we have those certain technologies, primarily the microwave, that allow us to scale it up very, very nicely. And this is probably our biggest advantage so far in this segment. Sorry, I think I missed. So you said API is your strength, but the formulation, that can be done through CMOs. Is that right? So we are making the API. We are making the formulations. We can also use CMOs for formulation, but primarily it will be made by us, and the part that we have to buy is the device. The device we are buying. Okay. Understood. My second and last question is on the Nestlé JV. So you concluded the deal in August. What kind of sales or any number you have booked in second quarter? And from here on, what kind of ramp-up you see in terms of putting more products in the portfolio or in terms of revenue? How should we see updates there? So right now, it's very small. It's in tens of crores because most of the Nestlé products are not yet registered and brought to India. So the main intent of this franchise is to bring the Nestlé product, Nestlé brand, actually, that are very successful outside of India to India and to bring them over time. So at this stage, we are talking about tens of crores. But let's say it's not material around. Let's say somewhere between 50, 60 crores. It's not significant. The main impact will come, obviously, from the ability to grow the brands in the future. So this is a kind of business that it will take us time to scale it up, but we believe that it's very good and very sticky for many, many years to come. Okay. Thank you. Thank you for your response. Thank you. The next question comes from Bino Pathiparampil from Elara Capital. Please go ahead. Hi. Good evening. Just following up on a previous answer, Abatacept, you said could be launched in early 2027. Did you mean calendar 2027? Yes. Calendar 2027. Yeah. Okay. I was looking at the Russia growth adjusted for the currency fluctuations. It means the first-half growth in Russia, CIS, is a bit muted, probably around the mid-single digits. Any particular reason and what's the outlook for the rest of the year? Sure. Like I mentioned, Russia is doing really, really well, so in constant currency, we grew 27%, and indeed, there is some devaluation, but I think we have also the right hedge for it, so overall, this is likely what we're going to see. This high level of double digits is exactly what we're going to continue to see in Russia. You have some seasonality in Russian products, so not every quarter is growing in the same way, but overall, this is the level of growth, especially as some of our peers are not investing in Russia the way we do, and we are gaining rank as we speak. Okay. And one last question on PSAI. There is a lot of optimism in the market around the CDMO part, CDMO business opportunity coming in the years ahead. Are you seeing that helping your PSAI business in any way? So it does contribute to both. For us, strategically, I see the CDMO primarily as an area in which help us to build relationships and build capabilities, especially in R&D, as the CDMO is working on the products of the future and it allows us to scale ourselves up, both small molecules as well as in big molecules. It also contributes to the growth. And I hope that we will be able to see triple digits on sales of API, if not next year, the year after, but in this range of time. So it's a nice growth. In addition to that, most of the growth in the PSAI comes from collaborations and partners that we have across the globe. This is an important strategic pillar for us as part of the B2B business. Got it. Thank you. Thank you. The next question comes from Surya Patra from PhillipCapital. Please go ahead. Hello. Yeah. Thanks for the opportunity. So my first question is on the Nicotinell business integration. So having completed the transition, if you can share your thought process now about your growth plans, your integration strategy of this business across various markets, and your margin and cost positioning for that business? Sure. So we are going to get the markets in a certain sequence. And just to make sure that I'm explaining it in the right way, naturally, it's a carve-out of brands from activity that Haleon is having today. So for some of those countries, we have to create either legal entity or sales force or distribution agreement or any of that. So there is an agreement of sequence of countries in which we are going to get, in which we will be ready to accept those countries with the relevant infrastructure, both internal and external. The starting market will be U.K. in April. And in the next 12 to 14 months, we should get more than 80% of the sales managed by us. Until then, it will be managed by Haleon. Obviously, in terms of numbers, we will start to recognize them already Q3. So from Q3 onward, you will see the full impact of that, including some commissions that we need to pay for Haleon for doing the work for us during this period of time. So we see three types of synergies that will come once we will manage it directly. One is our ability to invest and focus on those brands. We feel that this brand has certain lack of focus or lack of attention for several years, and we believe that by doing that, we can increase the growth. By the way, the brand is growing single digits already today. And second, we can bring it to more markets, more countries. And number three, much more important, we appreciate that there is a lot of changes we can do in terms of innovation, whether it's different products, different packaging, different life cycle management of the brand, etc. So between the three, we believe that we can add value to these brands. And so right now, focus is on the integration, like I mentioned, to get it and to build the infrastructure. And post that, obviously, to invest and to grow it further. Sure. Second question is about CDMO business again. Because of our manufacturing base and the positioning within the U.S., whether this Biosecure Act development that will offer any kind of meaningful kind of trend for our CDMO operation, which has been kind of relatively muted or seeing a kind of muted performance since some time. Do you expect any kind of meaningful kickstart to those kind of momentum there? We do see more forays that are coming on the biologics side of the CDMO, which is relatively new to us, but we definitely see that the Biosecure Act that you mentioned, it brings more attention to this segment, and yeah, I believe that it will translate to future business, and yeah, I do see an opportunity. I cannot tell you that it's huge at this stage, but it's absolutely in the right direction. Okay. Just last one, clarification for the US business growth. You mentioned you have seen some volume-related impact in the quarter. But is it possible to give some sense, excluding of the lenalidomide, what are the kind of means some color to the growth YY for the quarter or for the first half, what growth that you would have seen for the base business? So, again, like I mentioned to Kunal, I would not read too much on the sequential. On the year-to-year, we are growing the base business, and it's not just lenalidomide. So we are growing that. And I would not read too much about the Q1 because it's not. No, I wanted to just on a YoY basis, sir, for the first half. YY, We are growing. Okay. Okay. Thank you, sir. Wish you well then. Thank you. The next question comes from. Tarun Agarwal from Oldbridge Please go ahead. Hi. Good evening and congrats for a very strong set of numbers. A few questions. First, Russia. The INR 600 crore investment in working capital, what's driving this now? And basically, just wanted to understand or get a bit more color on the business in terms of how working capital intensive is that business, some dynamics on the market. At some point, I think DRL had a 2.5% market share in that market. How has that moved, and what's your volume market share there? On the basis of working capital, the two we have managed working capital through factoring and short-term loans. Now, because of the, it is becoming costlier. And then, as a group, when we evaluated this working capital funding as an equity from India to subsidiaries, it is beneficial at lower and lower. That's why we are just infusing as an equity towards working capital requirements. And yes, sorry? As for the market share, I don't remember exactly the numbers, but we definitely increased market share and increased our ranking in Russia, so we're clearly growing, primarily because of focus. You have companies that are still focusing on this market and companies that are less focused. I think this is going to very much to our side. I think that our overall in terms of market, I think we are in all that, both on mass as well as grocers, we are growing faster than the market in all segments on RX, FTC, etc. It is just to get a sense, I mean, how big is the covered market in Russia where Dr. Reddy is operating? And I mean, it's a sizable business now, almost $300 million. So how big is the market? And my sense is that the end market may not be growing. But from your vantage, could you expect this business to grow at the same speed at which you probably see your India business growing? I believe so. I believe that I want to see continuous growth. Indeed, the market itself is not growing in volume, but obviously, value is still growing because, of course, the situation in the country, price increases, etc. Okay. Sure. Second on CapEx, overall, if I see the trajectory over the last three, four years, we see a lot of investments in R&D buying products between market access and as intangibles. In terms of physical infrastructure, if you could give us a sense, where are you in terms of your utilizations between your injectables, your oral solids, and your API business? And what are the kind of investments that you're looking in terms of expanding your physical infrastructure from your own? Most of our investment is in the following spaces. We are investing in our injectables. We are investing in our biosimilars. We are investing in our API business. Most of the investment in the API business, which is about right now, let's say, give or take 50%, is it fair? 50% of the CapEx is primarily to build capacity for the GLP-1, as well as the other peptides. In the pipeline that we discussed before, there are many, many peptides, not just GLP-1. We are gearing up for the launches of some of these products in 2025, 2026, 2027, etc. Some of the GLP-1 in terms of API can be very, very big. I believe that we are one of the most reliable suppliers today, not just to ourselves, but also to the entire industry of the API. It's actually a very big opportunity for us in that respect. Let's say between the injectables, the biosimilars, and the peptides is the lion's share of the physical infrastructure. All of it is in India. Sure. And last question on the Nestlé JV. How long should the current capital contribution between you and the partner should hold the JV in good stead? I mean, how far along will we see till further capital contribution of the JV? So, I believe that it will take us a couple of years to build a meaningful size and a meaningful brand recognition, primarily because the brands are new. It's not a brand that we take from India. It's a brand that we need to build. The idea is to build the number one pharmaceutical company. Both companies see this for the long term, but unlikely that we'll see a major contribution to profit in the next coming years, so it will be, I don't think we will, it will be primarily investment, and whatever we gain, likely that we'll reinvest, so it's primarily more of a longer-term type of activity, but like I mentioned before, I believe very sticky and very meaningful. Okay. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please restrict your questions to one participant. If you have any follow-up questions, you can rejoin the queue. The next question comes from Kunal Randeria from Axis Capital. Please go ahead. Hi. Good evening. On Denosumab, the first biosimilar launch in the U.S., should be in May 2024. Given that you have yet to file for it, just wondering how many players do you expect will be ahead of you when you eventually launch? You are talking about Denosumab? Yes. Denosumab, it depends, of course, on the success of the others, but it should be somewhere between number three to number five, I believe. Right. And would this be like a late FY26 launch? It should be FY26 launch. Got it. Got it. Secondly, Erez, two and a half years back, when you had shared your vision in Horizon 2. Kunal, sir, may we request you return to the question queue for the next question, please? Sure. Thank you. The next question comes from Anubhav Agarwal from UBS. Please go ahead. Yeah. Thank you. Just one question on LTNA. So this year, we'll be about 27.5%-28%. Can you qualitatively give a sense that once in a more normalized stage, once the generic Revlimid is more normalized, let's say FY27, once you have ramped up biosimilar portfolio also infrastructure for that, what would this number look like in a rough range? So when I look at pre-COVID, you guys were doing 29%-30%. Would you go back to that, or would you retain 27%-28%? Can you give a rough sense in a more normalized stage? I believe it will be in the same range even for next year at this point of time, but it will not increase significantly. Yeah. But next year, you still have the support of generic Revlimid. So I'm just trying to understand, once, let's say, one-off revenues are not there on a more sustainable-based business, would you go back to pre-COVID number of 29%-30%, or would you still be at 28%? Sorry, just to understand, you're talking about growth? The physical growth? No. So what I'm just saying, I think, as Erez said, our new products are also kicking, and thereby, the top line will come. So hence, I believe it will continue to be around that range. Sure. And you're saying that this is beyond next year as well? Same range of 28% continues for you? Around that range, even I don't know. We cannot give exact guidance for the next year, but it will be largely in that range. Thank you. Thank you. Thank you. Participants are requested to ask not more than one question at a time and to rejoin the queue in case of incremental queries. The next question comes from Vishal Manchanda from Systematix. Please go ahead. Hi. Good evening, and thanks for the opportunity. On Rituximab biosimilar launch in Europe, would you be selling on your own, or you would have a partner there? And what is the how long would you take to ramp that up to its full potential? We will sell on our own. We have a list of primarily vendors that we know we can participate, and hopefully, we'll be successful in them. But let's say on the B2B side of the biosimilar, it should be relatively fast in accordance to the dates in which the tenders will be open. In Europe, you have also the physician centers. This, obviously, will have to do some legwork, and it will take some time. But yeah, there is no reason why we should not see results relatively fast. Would this be a $100 million-plus opportunity for you? I cannot guide you that much. I don't think it will come to this range, but I cannot quote numbers for this one. Got it. Thank you. The next follow-up question comes from Kunal Damesha from Macquarie. Please go ahead. Kunal sir, your line is muted. Please proceed with your. Yeah. Can you hear me now? Yes, yes. Yeah. Yeah. So just on the Abatacept timeline that we have given, it is for the biosimilar launch, not the new indication that our partner is trying. Is it correct understanding? Sorry, I'm not sure I got the question. On the biosimilar, sorry? So Abatacept, I think we are developing biosimilar, and we have outlined some of these biosimilars to Coya for the indication of ALS, right? So the launch timeline that we are talking about is for the biosimilar version that we are developing, right? Correct. Correct. Correct. This is not for the Coya product. The Coya product will come whenever they will finish the clinical trial. It's not a timeline. What stage of development are we on the biosimilar side in terms of the clinical trial or filing? We are in phase III, and we are supposed to gear up to submit and to launch within the end of calendar 2026, beginning of 2027. Okay. So as of now, let's say patient enrollment and all will be over. Do we have that details? We are almost. It's over or soon to be over, but in a very advanced stage. Sure. Sure. Thank you and all the best. Thank you so much. Thank you. The next question comes from Surya Patra from PhillipCapital. Please go ahead. Yeah. Just one clarification, sir. When we talk about the GLP-1 API capability, so sure, we do say that it is complete end-to-end integrated at our end itself? So we have the API. I just want to make sure that we have the API where we are making also the finished product. So in that respect, it's completely back integrated, and we are buying the results. If I got the question right. Yeah. Within the API, its capability is completely in manufacturing capability that we have. And hence, it is a full end-to-end integrated operation for us. Yes, it is. Sure. Yeah. Thank you, sir. Thank you. As there are no further questions, I would now like to hand the conference over to Ms. Richa Periwal for closing comments. Thank you all for joining us for today's evening call. In case of any further queries, please get in touch with Ash Reddy or myself. Thank you once again on behalf of Dr. Reddy. Thank you. On behalf of Dr. Reddy's Laboratories Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.