Ladies and gentlemen, good evening and welcome to quarter four and full-year FY 2025 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I will hand the conference over to Ms. Richa Periwal. Thank you, and over to you, ma'am. Thank you. Good morning and good evening to all of you. Thank you for joining us today for the Dr. Reddy's Earnings Conference Call covering the quarter and full-year ended March 31, 2025. We appreciate your time and participation. Joining us today is the leadership team of Dr. Reddy's, comprising Mr. Erez Israeli, our CEO; Mr. M V Narasimham, our CFO; and the Investor Relations team. Earlier today, we released our results, which are now available on our website. We will begin today's call with MVN presenting the financial highlights for the quarter and the year. Following this, Erez will share his thoughts on the business performance. We will then open the floor for a Q&A session. Please note that today's call is a copyrighted material of Dr. Reddy and cannot be rebroadcasted or attributed in press or media outlets without the company's expressed written consent. This call is being recorded, and both the playback and transcripts will be available on our website soon. All discussions and analysis in this call will be based on the IFRS consolidated financial statements. Additionally, today's discussion includes certain non-GAAP financial measures. For the reconciliation of GAAP to non-GAAP measures, please refer to our press release. Before we continue, I would like to remind everyone that the safe harbor provisions outlined in today's press release also apply to this conference call. Now, I hand over the call to MVN. Thank you, Richa. Greetings to everyone, and I hope you are all doing well. I'm pleased to present an overview of our financial performance for the fourth quarter and full-year FY 2025. Fiscal year 2025 was another milestone year for the organization, marked by strong financial performance. We achieved record high revenue exceeding $3.8 billion and crossed the $1 billion threshold in EBITDA for the first time. Both revenue and EBITDA registered double-digit growth for the year. Please note that all the figures in this section are translated into U.S. dollars using convenient translation rate of INR 85.43, the rate prevailing as of March 31st, 2025. Revenue performance: consolidated revenue for Q4 FY 2025 showed at INR 8,506 crore, which is equivalent to $996 million, reflecting a year-over-year growth of 20% and a sequential increase of 2%. For the full year, revenues were at INR 32,554 crore and $3.8 billion, representing a growth of 17%. These results include contributions from the acquired consumer health care business in Nicotine Replacement Therapy, which added INR 597 crore in Q4 and INR 1,202 crore for the full year. The overall revenue growth was driven by this strategic acquisition and contributions from our generic portfolio across geographies. Excluding sales of NRT business, revenue growth was at 12% year-over-year for both the quarter and the year, and 2% sequentially for the quarter. Gross margin: the consolidated gross profit margin for Q4 was at 55.6%, reflecting a year-over-year decline of 300 basis points and a sequential decline of 312 basis points. The decline was mainly due to reduced manufacturing overhead leverage and higher milestone income recognized in the comparative period. Gross margin for the global generics and PSAI segments stood at 59.3% and 26.3% for the quarter. For the full fiscal year, the consolidated gross margin remained stable at 58.5%, consistent with FY 2024. Gross margins for Global Generics and PSAI were at 62% and 27.1% for the full year, respectively. Selling and general administrative expenses: SG&A expenses for the quarter amounted to INR 2,406 crore, which is $282 million, marking a year-over-year increase of 17% and remaining broadly flat quarter-over-quarter. SG&A as a percentage of the sales was 28.3%, representing a decline of 63 basis points year-over-year and 57 basis points on Q2. For the full year, SG&A expenses amounted to INR 9,387 crore, $1.1 billion, up by 22% year-over-year. This increase is primarily driven by the recently acquired NRT business in the consumer health care segment, investment in other commercial activities, and higher prices impacting logistics costs. We continue to maintain a disciplined cost structure while strategically allocating resources to strengthen existing business and expand into the new growth segments. Research and development investments: R&D remains a key pillar for long-term growth. We continue to enhance our internal R&D efforts with strategic external collaborations for innovation assets. R&D expenditure for the quarter stood at INR 726 crore, $85 million, representing a year-over-year increase of 6% and quarter-over-quarter increase of 9%. As a percentage of revenues, R&D investment was at 8.5%, lower by 118 basis points year-over-year and higher by 57 basis points sequentially. Full-year R&D investment was INR 2,738 crore, $320 million, reflecting a year-over-year increase of 20%. The investment largely focused on building differentiated pipelines spanning small molecules, biosimilars, complex generics, including peptides and resinoval oncology assets. Other key financials: impairment loss is INR 77 crore in Q4 and INR 169 crore for the full year. The impairment pertains to certain product-related intangibles from the main portfolio and other product-related intangibles forming part of the company's global generic business in India and Europe due to adverse market conditions. Other operating income is INR 247 crore in Q4 versus INR 66 crore for the same quarter last year and INR 436 crore for the full year versus INR 420 crore in FY2024. Q4 increase is primarily on account of reclassification of foreign exchange gain related to foreign operations from FCTR. The full form of FCTR is Foreign Currency Translation Reserve, post-divestment of Shreveport m anufacturing facility. The net benefit to P&L on account of FCTR reversal after adjusting severe costs and other one-time costs is INR 121 crore. Earnings: EBITDA for the quarter was INR 2,475 crore, $290 million, registering a year-over-year growth of 32% and quarter-over-quarter growth of 8%. EBITDA margin was at 29.1%, an increase of 267 basis points year-over-year and 160 basis points sequentially. For FY 2025, EBITDA stood at INR 9,213 crore, $1.1 billion, reflecting year-over-year growth of 11%. The annual EBITDA margin stood at 28.3%, down from 29.7% in FY24, reflecting a decrease of 143 basis points. Finance income and profitability: net finance income was INR 235 crore in Q4 versus INR 102 crore in previous year and INR 472 crore for full year as compared to INR 399 crore last year. Higher year-over-year income is due to net foreign exchange gains. Profit before tax was INR 2,005 crore, $235 million in Q4, up 25% year-over-year and 7% quarter-over-quarter. PBT for the year was INR 7,678 crore, and in terms of dollars, $899 million. For the full year, a year-over-year growth of 7%. PBT margin was 23.6% for Q4 as well as for FY 2025. PBT includes INR 89 crore for the quarter and INR 101 crore for the full fiscal from the NRT portfolio. Effective tax rate was 20.8% for Q4 and 25.4% for the full year. ETR for the quarter is lower due to reversal of previously recognized tax provisions pertaining to prior years, and FCTR transfer to the income statement is not subject to taxation. The full-year ETR is higher than the previous year, mainly due to the reversal of previously recognized deferred tax assets related to land indexation and the recognition of previously unrecognized deferred tax assets or operating tax classes compared to the period ended March 31st, 2024. We expect the ETR for FY 2026 to be similar to the current fiscal year. Profit after tax attributable to the equity holders was INR 1,594 crore, $187 million in Q4, up 22% year-over-year and 13% quarter-over-quarter, translating to a margin of 19%. Full-year profit after tax was at INR 5,655 crore, reflecting year-over-year growth of 2% and a margin of 17%. Earnings per share stood at INR 19.1 for the quarter and INR 68.1 for the full year. Based on the company's performance, the board has recommended payment of dividend of INR 8 per equity share of face value of INR 1 each. This is equivalent to 800% of the face value for the year ended March 31st, 2025, subject to approval of the members of the company. Cash flows and balance sheet: operating working capital as of March 31st, 2025, stood at INR 12,590 crore, a reduction of INR 192 crore compared to December 31st, 2024, primarily driven by improved receivable management. Capital expenditure was INR 767 crore for the quarter and INR 2,699 crore for the full year. Pre-cash flow for the quarter was INR 1,110 crore, and for the full year, INR 1,332 crore for the full year before acquisition-related payout. At the year-end, the company maintained net cash surplus balance of INR 2,454 crore post NRT acquisition payout in September. Foreign currency cash flow hedges executed through derivative instruments as of March 31st, 2025, are as follows: an amount of $786 million has been hedged using structured derivative contracts maturing over the course of the next financial year. These contracts provide a minimum production rate of INR 85.9 per U.S. dollar, while retaining the potential for upside participation in the event of U.S. dollar appreciation. An amount of RUB 2,500 million has been hedged with a minimum production rate of INR 0.91 per Russian Ruble. These contracts are scheduled to mature within the next three months. With this, I now request Erez to take us to the key business highlights. Thank you, MVN, and a very good morning and good evening to everyone. Dr. Reddy's delivered another year of robust performance, marked by highest-ever annual revenues and profits. Fiscal year 2025 was characterized by double-digit growth across all business segments. During the period, we continued to strengthen our core generic businesses while investing and building our three strategic growth areas, namely Consumer Health, Innovation, and Biosimilars. Our efforts remain focused on driving operational efficiencies, strengthening our pipeline, and enhancing organizational capabilities. In parallel, we execute on value-accretive inorganic initiatives to complement our organic growth in alignment with our stated strategic objectives. I would like now to highlight some of the key financials for the fiscal year, as well as important updates from the fourth quarter. One, we sustained momentum and delivered a healthy double-digit revenue growth of 20% in Q4 and 17% for the full fiscal year. EBITDA margins remained resilient, exceeding 29% for the quarter and closing the full year at over 28%. Return on Capital Employed (ROCE) reached 27.7%, underscoring our continued focus on capital efficiency and value creation. We concluded the fiscal with a net cash surplus of $287 million, thereby enhancing our financial flexibility to support future growth initiatives. Our biosimilar strategy progressed this quarter through key strategic partnerships. We secured exclusive commercialization rights for the daratumumab biosimilar candidate companies in the United States and Europe, reinforcing our oncology portfolio. We signed an agreement with Bio-Thera to commercialize ustekinumab and golimumab biosimilar candidates, with a primary focus on Southeast Asian markets. The U.S. FDA also accepted the filing of our partner, Denosumab biosimilar, making a key milestone in our advancement within regulated biosimilar markets. The phase integration of our newly acquired Nicotine Replacement Therapy (NRT) business is moving forward as planned. The United Kingdom was successfully integrated at the start of the month, and we are on track to complete the integration of the Nordics in the next phase. We are demonstrating our commitment to bringing innovation to India and improving healthcare access through strategic partnerships. We expand our collaboration with Sanofi to introduce Bayfortus, which is nirsevimab, a novel drug for preventing RSV. In partnership with ALK-Abelló, we launched Sensimune, an immunotherapy product for house dust that might induce allergies. We commenced participation in the Government of India Jan Aushadi program with one of our products. We divested our Shreveport manufacturing facility in Louisiana, United States. On the regulatory front, our API manufacturing facility, CTO2, located in Bollaram, Hyderabad, received a VAI status from the US FDA following a successful GMP inspection conducted in November 2024. We continue to deliver industry-leading performance and sustainability, earning multiple recognitions for environmental, social, and governance ESG initiatives. Our EcoVadis score improved to 73, positioning us among the top 15% of the companies assessed globally. We were also honored with the Climate Action Program 2.0 degrees award by CII in the highest resilient category within the light manufacturing sector. We were recognized in the leadership category on the Indian Corporate Governance Scorecard 2024 by Institutional Investor Advisory Services. I will now walk you through the key business highlights for the quarter and the full fiscal year. Please note that all figures referenced in these sections are presented in their respective local currencies. Our North America Generics business generated revenue of $418 million for the quarter, reflecting a year-on-year growth of 7% and a sequential growth of 4%. For the full fiscal year, revenue stood at $1,727 million, sorry, million U.S. dollars, representing a 10% increase over the previous year. This performance was primarily driven by key volume and key products and successful new product launches, partially offset by price erosion. This quarter, we launched seven new products, bringing the total for the fiscal year to 18. We expect this growth momentum to continue into FY 2026. Our European Generics business reported revenues of EUR 140 million for the quarter, reflecting a year-on-year growth of 142% and a sequential increase of 4%. For the fiscal year, revenue stood at EUR 395 million, representing a growth of 73% compared to the previous year. Our strong performance, driven by contributions from the NRT business, higher base business volumes, and gains from new product launches, helped offset pricing pressures. Excluding the contribution of the NRT business, European Generics business recorded a year-on-year growth of 29% and a quarter-on-quarter growth of 11% in Q4, and a full-year growth of 15%. This quarter, we launched 10 new generic products in Europe, bringing the total for the fiscal year to 39. Our Emerging Market Generics business reported revenues of INR 1,398 crore in Q4, reflecting a year-on-year growth of 16% and a sequential decline of 3%. For the full fiscal year, revenues stood at INR 5,477 crore, representing a year-on-year growth of 13%. The performance was mainly driven by higher volume and new product launches, partially impacted by [unfavorable forex]. During the quarter, we launched 26 new products across various emerging market countries, bringing the total for FY 2025 to 85 products. Within this segment, our Russia business posted a year-on-year growth of 27% in constant currency for the quarter, although it experienced a sequential decline of 13%. On a period basis, the Russia business recorded a growth of 24% in constant currency terms. The India business recorded revenue of INR 1,305 crore in Q4, reflecting a double-digit year-on-year growth of 16% and a 3% sequential decline for the quarter. For the full fiscal, the revenues were INR 5,373 crore, representing a 16% year-on-year growth. Excluding the contribution of the in-licensing vaccine portfolio, the business recorded a 6% growth in Q4, and for the full year, driven mainly by successful new product launches and favorable pricing. According to IQVIA, we have maintained our position as the 10th largest player in the Indian Pharmaceutical Market, IPM, and have marginally outperformed the IPM with a moving annual total MAT growth of 8.4% compared to the IPM growth of 8%. In addition to the Sanofi and Nestlé portfolio, we have launched 23 brands during the fiscal. Our PSAI business recorded revenues of INR 112 million in Q4 in FY 2024, reflecting a year-over-year growth of 13% and a sequential growth of 15%. For the full fiscal year, revenues stood at INR 401 million, representing a growth of 12% compared to the previous year. The growth was primarily driven by increased volume contributions from new API launches and growth in our Contract Development and Manufacturing Organization, CDMO business. During the quarter, we filed 52 Drug Master Files DMFs, including seven for the United States, bringing the total number of filings for the year to 111. We remain committed to investing in our pipeline to drive future growth, further supported by strategic collaboration focused on innovation. Our R&D investment for the quarter amounted to INR 726 crore, reflecting a year-over-year growth of 6%, with growing emphasis on complex assets such as GLP-1 and biosimilars. Additionally, we completed 95 global generic filings, bringing the total for the fiscal year to 249. In FY 2026, we continue to expand and strengthen our core businesses, drive value through portfolio management, grow our presence in consumer health care, innovative therapies, and biosimilars, leveraging our commercial footprint and explore value-accretive acquisitions and partnerships, and maintain financial discipline to build the foundation for sustainable future growth. I would like to open the floor for questions and answers. Shall we open the floor for questions? Yes. Yes, please. Thank you very much. Participants are requested to ask not more than two questions at a time and to rejoin in case of incremental queries. Ladies and gentlemen, you may press star and one to ask a question. The first question is from [line of] Neha Manpuria from Bank of America. Please go ahead. Hi. Thanks for taking my question. My first question is on tariffs. Given you speak to the policymakers and customers, what is your sense on the extent of tariffs or to what level the tariffs could be implemented on generics? Could it be in the API? Could KSMs be included? The second part is, given that Reddy's does not have any manufacturing in the U.S., what are the mitigation factors that we are looking in case tariff is implemented for generics? Yes, thank you. First, obviously, I wish I knew when and how much tariff will come. We are preparing ourselves for the scenarios, and we are obviously watching carefully the information as it will come. At this stage, the main effort is to ensure sustainability of supply. The main activity as we speak is to work closely with our customers and see what they need in terms of inventories, future inventories, as well as new product demands, identify products that may have supply disruption, and try to help them to address it. We are all waiting to see what will be after the new policies, and accordingly, we will address. As if it's the API, if the country of origin will be based on API or pharma, I don't know. Most of the people there believe that it's for API, but we will need to wait and see for formal communication in that respect. As for production footprint in the U.S., I don't think that at this stage the generic industry is having a short-term issue here. As a company, we would love to have a footprint in the United States. It just has to be the right asset. We are always looking for an asset, but we are not going to do these specific activities to build footprint. It's more if the right opportunity will come to us, we will be more than happy to engage it. Based on your conversations with customers, would they be open to absorbing an impact of any potential tariff depending on how much it is, or what's your sense on who bears the burden in case of a tariff? My sense is nobody wants to absorb the tariff. Yeah. Decided not to find any player that said, "Yeah, I would love to absorb." No. I think what will happen is there will be certain adjustment periods in which people will have to work together to see what to do with it. Understood. It is primarily about working together. What I want to emphasize is that under any scenario, we will not create a shortage of supply or supply disruption to the U.S. market. This is very, very important to us. We want to stay in the United States for many years and get something that was also clarified in all of our discussions with our customers. Understood. My second question is on our cost base. MVN given that our cost base has ballooned quite a bit, even though our margins are great, as we look at a REVLIMID [flip] three quarters out, how much flexibility do we have to actually reduce this cost once REVLIMID goes away? Just trying to get to how we get to the 25% margins. I know you have a lot of products, etc., which we've come to, but from a cost perspective, how much flexibility do we have from an R&D and SG&A perspective to reduce costs? You will know that I think, suppose REVLIMID, the patent [cliff] will happen in January 2026 based on our current modeling. We will continue to have, I think, suppose what we have guided is like a safe double-digit growth, and then EBITDA ROCE 28% or above at this point of time. In terms of R&D and edge SG&A cost, would it still be at similar levels? Yeah, yeah. R&D and edge SG&A will be in the similar zone. I think edge SG&A now is like somewhere 28% of the sales. R&D, 18% would be in the similar zone. Yeah, the main way to do is we are planning to just go faster, the sales than the expenses. This is one mean, and we have levers to do that in all the relevant markets, as well as obviously using—if you want, I'll just put levers that will allow both the growth as well as the margins. Of course, trying to grow the base. We are trying to grow the base significantly faster than the expenses while using all kinds of productivity measures on the cost. It's not a cost cut. It's all kinds of productivity measures. Of course, we are planning to have some nice products that are coming up, both semaglutide side, as well as the biosimilar that will come. BD, we are planning to continue to do BD, and we are engaging with quite a few opportunities. It is likely that the combination of all of this, I believe that will help us to grow, cover also from the potential decline because of lenalidomide and to keep our margins. Understood. And then you say double-digit growth, I assume means ex REVLIMID? Yeah, we believe that if it's FY 2026, double-digit growth is possible as well as maintaining the margins. Okay. Thank you so much. Thank you. Next question is from the line of Dr. Kunal Dhamesha from Macquarie Group. Please go ahead. Hi. Thank you for the opportunity and good evening. The first question on the gross margin, which has kind of changed quite a bit dramatically on the QoQ basis, and you have highlighted the reduced operating leverage. As far as I see, our revenues have grown, right? I kind of fail to understand how the operating leverage has kind of worked other ways for us. If you can provide some more color on that, it would be great. That's my first question. Yeah. Thanks, Kunal. Here, like a one-off cost, I think this quarter are there as part of the manufacturing overhead as per our policies that created like it's impacted our work. Like in the report plan, we never said we have just had a significant cost. That's the one-time cost that impacts the part of the manufacturing overhead. Similarly, the second, just I articulated earlier, this is as compared to the Q3 and the Q4, our out-licensing income is lower. That will have a direct impact on the gross margin that's where like a 300 basis points is lower in this quarter. We believe this should be like a one-off, and then we'll go back to our normal level. Can you please quantify the severance cost one-time impact for this quarter? That is not—we will not give, but it's not a very small amount. It's not—what I'm just saying, maybe if I have to say out of 300 basis points, the manufacturing overhead, this is a one plus another our accounting [solutions]. Overall, it has impacted 0.8% out of 80 basis points out of 300 basis points. That's the severance cost. Then maybe another 50 basis points. Just Kunal, it's not just severance cost alone. There are other costs also. Okay. 80 basis points is one-off. The proprietary product milestone not coming is incremental to that 80 basis points. Yeah, that is the one. Like a little bit on the inventory also, there is an overhead. Overall, put together, I think they've all happened in one quarter. That's why you see there is a 300 basis point. Sure, sure, sure. Just a related question, if I look at the NRT business, the PBT margin between the two quarters has a meaningful delta of around 500 basis points. Right? Is there a seasonality? When we look at this business on a full-year basis, how should we kind of think about this business? Because based on two quarters, really difficult for us to understand. Overall, for this business earlier, we also spoken our EBITDA margin in the zone of like a 25%. Because I don't know why the fluctuation between the Q3 versus Q4, there are a lot of integration costs. I don't know that's where it's impacted. Otherwise, when you are modeling the EBITDA, you can take it at like a 25%. Okay, sure. And one question for Erez, if you could provide an update on our GLP-1 or let's say generic semaglutide product across various markets and also the abatacept product. Sure. We are gearing up to launch it during calendar 2026 in all the markets that the IP landscape will allow us to launch. This is still intact, and we are progressing nicely in our preparation for that. As for abatacept, so far so good. We are deep into the phase III, and so far, it looks like the timeline did not change. We are planning to submit the product somewhere in the end of this calendar year, end of 2025, to be ready to launch the IV immediately after patent expiration and then for the sub-Q, which will become a year later because of, again, patent-related issues. Once the IP landscape will allow us to launch it, we will do so. Far so good. Right now, it's phase III, which is currently going on, right? Yeah, the phase III is going on, and we are planning to submit by the end of this calendar year, by the end of 2025. Okay. Okay. I have more questions. I'll join back the queue. All the best. Thank you. Next question is from the line of Madhav Marda from Fidelity. Please go ahead. Hi, good evening. Just a follow-up to the previous question. Could you help us maybe understand the sizing of the generic semaglutide opportunity for us in markets such as Canada, Brazil, and the other larger EMs where it goes off within next year? We obviously have invested in capacity for generic semaglutide. What we understand, looking at penetration rates in, let's say, Canada, Brazil, severely underpenetrated because supply was short, and obviously, there was a much higher price point. As some of these products supply comes through and prices go down, how do we see the volume expanding for this product, let's say, in Canada and Brazil? Just to give us some sense there that we behave. Yes. Naturally, Canada is one of the markets that will open early. What's holding the people from launch is that exclusivity that will be finished in the beginning of January 2026. The product, to the best of our knowledge, based on the marketing reports, is growing nicely. At least in accordance to IQVIA and the financial reports, the market price is around $1.8 billion, which suggests that it's around, give or take, 10 million pens, I mean, of course, give or take. It's a very nice market. The CAGR is big. It's somewhere between, in some reports I saw, 28%. In another report, I saw 39%. It's a very, very high level of growth, naturally. When we saw the prevalence of the disease versus the use, compared to other markets, it looks like in Canada, there is room for growth also quantity-wise. It's an interesting market. Once the IP landscape will allow us to launch it and assuming approval, we are planning to go. We see ourselves as one of the companies that have the opportunity to be first or among the first in Canada. We are planning to do the same in India, in Brazil, and the other markets in accordance to, of course, whatever the IP landscape will allow us. I just—so the 10 million pens, that's the Canada market size today, right? Did I understand that right? Yeah, what I quoted to you, the numbers that I mentioned are from relevant reports about Canada. Sure. Yeah. That is what I was trying to understand, that this is at a much higher price. Would you have any sort of sense in terms of this 10 million pens? Can this, given that if you look at the obese population or the diabetic population in Canada, the size of the potential market can be maybe 3x, 4x or 5x? Could you give us some sense of how the market could grow? Yeah. Yes. I heard 5x, but my knowledge is not different than yours. 5x. Yeah. Okay. They probably read the same report. The prevalence is still high. The use, relatively to the prevalence, is still low. Now, if it's 3x, 4x or 5x, I don't know eventually what will happen. Clearly, it is going to be an important product for Canada, and obviously, we are very keen on it. Understood. Thank you. Thank you. Next question is from line of Amey Chalke from JM Financial. Please go ahead. Yeah. Thanks for taking my question. The first question I have, there is a gross margin drop, but there is also reasoning given that there was a price erosion, and one of the reasons for the gross margin drop. Is it possible for the management to give us some understanding? What is the U.S. business price erosion for the year and how the U.S. business has done for the year for FY 2026, excluding the REVLIMID? This gross margin, the price erosion is like on year-over-year basis. In the U.S., I think the price erosion is very stable. That's what we have put it in the press conference. We do not see any challenges even. In fact, the price erosion is like much lower as compared during FY 2025 compared to FY 2024. Sure. Give us this business, how it has done for the year. It has grown. How it has performed? The U.S. business [grew]. It has grown very, very nicely. It is primarily due to the usual new launches, market share gains. Just to make sure that in addition to what MVN said, the price erosion that was in the U.S. was relatively low, primarily as most of the product kind of, I believe, exhausted the potential of the price erosion. Normally when there is no price erosion, I suspect it is not always a good sign. In our case, it was a very low single-digit price erosion within the fiscal. Sure. Second question I have on the revenue matrix. In FY 2026, I understand that January would be when the exclusivity is ending. If we consider the quota-related quantities, which we would be booking before January, how should the distribution be expected to happen over the next few quarters? Is it evenly distributed, or do you think that for the first half of FY 2026, we should expect revenue sales to be booked? Obviously, it's in accordance to the demand of the customers, but likely that we will finish what we can sell a few months before January in order to make sure that our customers will not be with the goods on the shelf in order to avoid the price shelf adjustment. Likely that we will stop a few months before that. Sure. Just the last question, if I can squeeze in. We focus on Canada market related to semaglutide. However, traditionally, we have seen generic capturing the branded market where the prescription is typically marketed by the innovator. However, here, the market is severely underpenetrated. Do you think there would be any need for you to market the product even despite being a generic? We believe that the demand from the customers will be strong enough that we don't need to market the product or introduce it to the market. What I believe can happen is that as the product will be much more affordable and some of the use is without reimbursement, I believe that it will create an additional demand. No, we are not planning to actively market the product as a brand. Sure. Thank you so much. I'll be going back. Thank you. Next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead. Hi. Good evening, Aaron. Following up on revenue matrix, I haven't seen any significant price erosion in revenue matrix as of now compared to six months back. There is a price erosion. There is also increase in quantity, so it's a combination of both. Yeah, I will not be able to tell you exactly the amount, as you know. But yeah, there is a certain level of price erosion. Okay. Just to reconfirm what I heard earlier, I believe you said that for financial year 2026, you can do a double-digit growth and maintain the margin at the same level of FY 2025. Did I hear that correct? Yes. That's what I heard. Okay. Okay. Once the revenue matrix happens, which may be FY 2027, the margins may settle down back to your long-term target range of around 25% or so. Is that how we look at it? Yeah. So we always said that the 25% is an indication for the place that we feel comfortable to be, giving enough total shareholder return, but also allowing us to invest in the future. We will continue to aim for that amount. It may fluctuate from quarter to quarter. Sometimes it will be above, sometimes below. Yes, we are planning to be in this neighborhood also in the future and post the lenalidomide era. Understood. One last question on CapEx. This year, CapEx was, I think, more than double the previous year's level. Where has it mainly gone to? For next year, what is the level we should look at? Largely, these major CapExes are going in two fronts. One is for the peptides, both to create an infrastructure for both API and formulation, and also to create the biosimilar facilities. Largely, these two are the major investment driving factors. Apart from that, suddenly, it seems like we are in the complex molecule journey. Then there is a product-specific investment as well. That is where I think it is overall CapEx. You are asking for FY 2026. We believe at this point of time it would be in the similar range for FY 2026 as well. Got it. Thank you. Thank you. A request to all the participants. Kindly listen to two questions at a time and rejoin the queue for a follow-up question. Next question is from the line of Krishnendu Saha from Quantum Mutual Fund. Please go ahead. Yeah. Hi. Can you hear me? Yes. Hello. Robin. Yeah. Thank you for giving me a question. Could you talk about the index temperature when we speak about the next year? Krishnendu, sorry to interrupt you, but I'm losing your audio. Can you come back and raise your hand again, please? Yeah. Can you hear me? No, sir. Can you hear me? The line for the participant dropped. We'll move on to the next participant. Next question is from line of Tushar Manudhane from Motilal Oswal. Please go ahead. Thanks for the opportunity. For the Europe market, FY 2025 was a great year. If you could sort of elaborate on the growth prospects for this region, ex-NRT as well, for 2026, 2027, maybe. Yeah. I agree with you. Europe is a growing area for us. We are planning to grow by first of all, we are expanding to more countries. We are launching more products, primarily leveraging the pipeline for the United States. We are going to launch biosimilars in Europe, both rituximab, bevacizumab, and after that, denosumab and abatacept. We are planning to, obviously, grow the NRT business. Indeed, Europe is going to be an important growth area for us. [Got it]. Sir, as far as the semaglutide is concerned, because it can be manufactured using biological route as well as synthetic route, any other, if you could share in terms of at least the initial countries like India, Canada, would they be okay to approve the synthetic route? The competitive dynamics would be different if that happens, or you think the competitive dynamics would be similar even if it is approved either through a synthetic route or a biological route? Yes. We believe that the synthetic route can be approved for the injectable, for the pens. The semi-synthetic route is going to be used for the oral products. That is what we are planning to do: synthetic for the injectable and semi-synthetic for the oral. Likewise, the price erosion basis competition would be higher for synthetic route? It of course depends on how many people will launch the product in each one of the markets. It is not so much because of the synthetic versus non-synthetic. It depends who has access to capacity at least at the beginning and who is going to obtain approval. In terms of competition, I believe that in some of the markets, they may have some advantage for those that will have at least for a short period of time or a longer period of time, depends on the scenario, less competitive, maybe fewer players that will play the market. Thereafter, it will be very competitive because many companies are having these products and they will compete for market share. At the same time, the product will grow. We are preparing ourselves for the scenario in which we believe that we have a chance for relatively limited competition, but as well as prepare ourselves for the scenario of high volume, low price, very competitive landscape, and we are gearing for both. Sorry, I may ask one more. Sorry, Tushar. May I request you to come back, please? Okay. Thank you. A request to all the participants. Please restrict to one question from participants or the management can reverse all the queries from all the participants. Next question is from line of Abdulkader Puranwala from ICICI Securities. Please go ahead. Yeah. Hi, sir. Thank you for the opportunity. My first question is on your India business, where you talked about 6% growth excluding the vaccine business. How should we see this portfolio ramp up happening next year? Any areas where you think the growth was a little lower this year? Next year, how should we model this business for? You're going to see similar growth overall for India also next year. We are planning to grow this year. We grew 16%. That kind of range of growth you're going to see also in FY2 026. Indeed, we highlighted, I want to emphasize that although we highlighted the inorganic versus organic, I want to highlight that most of our growth in India will be inorganic. We are licensing products. We are acquiring products. We are introducing innovation. It will not be by stressing necessarily only the big brands, although, and I will refer to it in a second, but primarily by introducing products that have better standards of care. Having said that, most of our big brands from the past grew after a double digit. There are two areas in which we did not do as well. This is in cardiovascular as well as GI. We have a mitigation also planned for those, primarily by adding more marketing resources as well as addressing the reverse product and introduction of lifecycle management. Overall, between new products, innovation, big brands, dealing with those big brands that do not do well, we believe that we'll have a high-level, high-double-digit growth in India next year. Got it. My next question is with regards to the recent updates coming from the U.S. in terms of certain concessions on the regulatory front to be offered by the U.S. agencies, as well as they're talking about increasing the intensity of surprise inspections for plants laid out in India and China. I would love to hear your take on these developments coming from the U.S. market. Yeah. It is not new. Just this year, the inspection that we had in CTO-3 and CTO-6 were unannounced inspections. Our facilities are ready for it. This was always the guideline in the United States for years. It is unannounced. All of our facilities are ready for that. That actually is the guideline for a while. It will require people that are not ready for that, maybe to upgrade their systems, but we are ready for it. Thank you. A request to all the participants. Please restrict to one question per participant and rejoin the queue for a follow-up question. Next question is from line Surya Patra from Phillip Capital. Please go ahead. Yeah. Thanks for the opportunity. My first question is on the R&D spend front. What we have seen in the last two-year period, sir, there is a kind of back-to-back around 20% kind of growth annually on the R&D spend front that we have witnessed. Could you give some visibility about the kind of work that we would have done on the pipeline buildup front and the likely investment on those fronts on the R&D side going ahead and what buildup that we would have created so far as the future pipeline or the growth pipeline for us? Suppose the R&D investments have been increasing in biosimilars, like let us say abatacept is in phase III. Suddenly, the investments are high. In case of our generics, we are continuously focusing on all the GLP-1s. I think these are all complex molecules and require a lot of investment. Erez also earlier spoken, this abatacept once we file it, the revenue starting calendar 2027 somewhere. You will just see the revenue from all the efforts, what we are doing now, suddenly, a little later. It is not very far off, I think, but definitely in the coming years, so much as you will see some of the products, I think, will start showing up the revenue. Okay. On the complex industry. Question for you, Surya. Can I request you to come back, please? Thank you. A kind request to all the participants. Please restrict to one question per participant. Next question is from line of Shashank Krishnakumar from Emkay Global. Please go ahead. Hi. Thanks for taking my question. Just wanted to check with respect to REVLIMID, given the import alert that has been issued to Viatris facility. Could you see any meaningful benefit, particularly in the first half this year, or is it largely a non-event given that there are volume restrictions in place? I don't think there will be any investment. Got it. Thank you. Thank you. Next question is from line of Srikant from [Nuvama Group]. Please go ahead. Hi. Thanks for the opportunity. In the Canadian semaglutide market, there are four players who are filed. If you can talk about our approval timelines, and do you think that all the four players would be there in the Canadian market when the opportunity opens, sir? I obviously don't know who it would come with North, but we are planning to be there at the date that the market will be open. The approval timeline for us? The approval timeline will actually be a little bit before that date. We come in the end of this calendar. Okay. Thank you. Thank you. Ladies and gentlemen, we'll take the last question from the line of Krishnendu Saha from Quantum Mutual Fund. Please go ahead. Yeah. Hi. Can you hear me? Yes, hello. Can you hear me? Yeah. Yeah. Just quickly, when I look at the European revenue for us, it sounds like U.K. has grown kind of pretty fast. Is it because we started selling NRT out there, and the NRT number which you give out, INR 1,200 crore, can I double that just to get the whole revenue for the full year? The last question on REVLIMID, when we speak to [NASCO], they say that June, September could be a better quarter for us in FY 2026. Does it hold true for us also? That's it. Thanks. I cannot share numbers or guidance on the REVLIMID. I can only say, like we always do, that it's going to stay a meaningful product for us. As for the U.K., I'm not sure I got the question. It is primarily due to a relatively high level of launch of new products. Plus, we launched the bevacizumab also in the United Kingdom. The combination of both allowed us to grow in the U.K. The NRT, the rounded off INR 1,200 crore, is it that we simply double that? Is what the number we get for the full year for FY 2026? Could you just repeat your question? The number of NRT, which we nicotine which we have for the H2, is around INR 1,200 crore. If I double that, is it the number which I get for the full year, or I have to put it subscription? Yeah. It's supposed to. Yeah. Suddenly. Give or take. Give or take, that would be the range. When we start selling in the U.K. all by ourselves, will it be next year? Yeah. Currently, also we are selling in the U.K., and then going forward, also we'll continue to sell in the U.K. What the numbers we are reporting for U.K. without. Right. If I just can squeeze the last thing. On the GLP-1 last launch, which happened in the U.S. after Teva, only two, three guys have come in. Do you think the scenario could be the same when it happens for sema, when it launches in the U.S.? I think Biocon just got an approval or they have launched. Is it possible that the market will still be there are a lot of pilots, but could it be that two, three players like Vitosa, or it will be a large number of players out there? For which product are you talking about? Sema. Sema. Semaglutide in the U.S. will be in 2033. Sorry? Semaglutide? Semaglutide, Victoza, or Saxenda? I'm not. I have a question for you. Yes. I understand. The number of players in Victoza, very less, even after Tevas came in and now is gone. Do you think the same amount of players, because the large number of pilots for sema in Canada and India and all, do you think everybody will get an approval and there will be a large number of players, or with the GLP-1 within the U.S. right now, Victoza, there are only three, four players? How do you think the landscape will be on the competition part? That's what I'm trying to understand. We believe that the landscape of semaglutide will be very competitive. It could be a situation at the time of launch or around the time of launch. There will be people that may get later the approval or have later access to the supply chain. It will evolve. Those players that may come before and be there on day one may gain kind of first launch advantage. Overall, it's going to be, we believe, a very competitive market, and we are preparing ourselves in terms of cost, supply to high volume, low-cost type of a product over time. Thank you, Krishnendu. Participants, we'll take one last question from the line of Saion Mukherjee from Nomura. Please go ahead. Saion Mukherjee, may I request to unmute your line and proceed with the question? Yeah. Are you there? Hello? Yeah. Am I audible? Yes. We can hear you now. Yeah. Sorry. Disconnected. The line for the participant dropped. With this, I now hand the conference over to Ms. Richa Periwal for closing comments. We appreciate you joining us for this meeting's call. If you have any further questions or require clarification, please feel free to reach out to theI nvestor Relations team. Once again, thank you on behalf of Dr. Reddy's Laboratories Limited. Thank you very much. On behalf of Dr. Reddy's Laboratories Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.