Ladies and gentlemen, good day, and welcome to the Q1 FY 2024 earnings conference call of Eris Lifesciences Limited. We have with us on the call today Mr. Amit Bakshi, Chairman and Managing Director, and Mr. V. Krishnak umar, Chief Operating Officer and Executive Director. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. Krishnak umar, Chief Operating Officer and Executive Director of the company. Thank you, and over to you, sir. Thank you. Good afternoon, welcome to our conference call for the first quarter of FY 2024. Our branded formulations business accounts for 97% of our consolidated revenue, and this includes the standalone entity, Eris Lifesciences. It includes Oaknet Healthcare, our insulin business, Eris MJ, Eris Therapeutics, which houses our Gujarat facility commercialized in March, and Aprica. This segment excludes EHPL. The operating revenue for our branded formulations segment grew by 21% year-on-year to INR 455 crores in Q1. The segment EBITDA was INR 168 crores, which represents a 37% margin and a 30% year-on-year growth. Our consolidated operating revenue grew by 17% to INR 467 crores. This includes our trade generics business, EHPL, as well. The consolidated EBITDA margin has bounced back to 36%+ in the first quarter, up from 32% last year. During the quarter, we have reduced our net debt by INR 102 crores, resulting in a net debt position of INR 672 crores as on 30 of June 30, down from INR 774 crores as on 31st March. Our business model continues to be highly cash accretive, with an operating cash flow to EBITDA ratio of around 70% for the quarter. I wish to recap how the strategic investments we made in financial year 2023 and prior have started demonstrating impact this year. Last year, we had invested INR 1,265 crore in the acquisitions of Oaknet, Glenmark brands and Reddy's brands, all of which were margin-dilutive last year. Happy to report that we've turned this around in less than a year, with Q1 EBITDA margin of the acquired business getting close to our overall branded formulations segment margin. We expect a 35% EBITDA margin for this piece in FY 2024, up from 24% last year and 10% at the time of acquisition. Our second major investment in the last financial year was our injectable diabetes franchise, which clocked a first-year revenue of INR 17 crore, along with an EBITDA burn of INR 20 crore. This business is on track for a revenue of INR 50 crore this year, and we expect EBITDA breakeven by quarter four of this financial year. Phase III clinical trials of glargine and liraglutide from MJ's pipeline are complete, and we expect a commercial launch in quarter four of this year. Last year, we also launched our own R&D program, focused on developing first-in-market combinations with an initial identified investment of INR 30 crore. We now have an active pipeline of 10 combinations in diabetes, cardiology, and neurology. Four of these are in clinical trials and will be launched later this year. The remaining six will be launched in financial year 2025. We also took calculated decisions to participate in at-risk opportunities like sacubitril/valsartan, FCM injection, and linagliptin. Of these, Zayo, our brand of sacubitril/valsartan, has already been relaunched in January, and FCM and linagliptin are opening up for relaunch in Q2. Our investment of INR 230+ crores in the Guwahati facility and the commercialization of our derma block in quarter four will start delivering significant margin benefits later this year. We have successfully completed the operational integration of Oaknet into our mainstream. This has started demonstrating tangible benefits from Q1 itself. You might recall that we had acquired the Glenmark and Reddy's brands without any field force. Q1 marked the first quarter of these brands being handled by Eris's field force and Eris's topic network. We've retained 75% of the sales through this transition. We expect to capture 100% of the sales from these brands starting Q2. We remain excited about the growth prospects from the dermatology business in this financial year and beyond. Our strategic priority for this financial year is to accelerate our organic growth trajectory and expand our covered market. The detailed initiatives in this regard are available in our investor presentation. We are now happy to open up for questions. Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking your question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question at this time. We have the first question from the line of Mitesh Shah from Nirmal Bang Securities. Please go ahead. Thanks for taking my question, congratulations for the strong numbers. My question is mainly to your operational operations. I think one of the best gross margin you have reported, which will be 83%. Again, the staff cost was substantially high and the other expenditure has reduced. Can you guide us that how would we see over a period of time and specifically for FY 2024? Also, interest rate has substantially increased, so what would be your, what would be your target net debt for end of the FY 2024? I think depreciation, this would be a right numbers to be looked at for the entire year. Depreciation will be to the tune of INR 40-INR 41 crores per quarter. As you've seen this quarter, that will be consistent, you can look at a depreciation plus amortization of around INR 160 for the year. As regards our position on debt repayment, it remains the same as what we said last quarter. We are targeting to get to below INR 400 crores net debt by the end of the year. As far as margins are concerned, we are looking at, you know, an EBITDA margin of 35% or thereabout this year. What is particular reason for the such a strong gross margins? Shah, I'm sorry to interrupt. Yeah. sir, can you please use your handset to ask question, please? Your audio is not clear. Can you hear me now? Sir, still there is a disturbance. I'll come back in the queue. No, sir, you can ask question now. It is better. Yeah. I just want to understand about the gross margin, strong gross margin. Can we expect the similar gross margin going forward? What is the reason for it, strong growth? The gross margin is an outcome of product mix and. Some softening of cost. There is some softening of cost. There is, some of the new products that were launched at lower gross margin, they scale up, so the gross margin improves. There are a lot of those factors playing out. Got it. This particular year, yeah, we reported- We don't expect it to be at 84% by the end of the year. We are more, more comfortable at around 82%. Got it. Got it. The 36% already we achieved this margin, then we are still believing that the contribution of acquired portfolio will be coming fully from 2H. Can we expect more than a 35% margin by end of 2024? Mitesh, this year will be an unprecedented year for us in terms of new launches. Got it. If you go through the slides, we have just mentioned how many new launches are being planned. Mm-hmm. Our R&D kind of is kicking off the products now. We are having two mother brands coming in. There is a lot of investment which will happen in the dermatology business. We just launched two very exciting products, actually, first in kind. I'm keeping that margin with us because there will be new products and new investments going in. That's the thinking as of now, but it will evolve as we go forward in the year. Got it. That's it from my end. Thanks a lot. Thank you. A reminder to all the participants, anyone who wishes to ask questions may press star and one now. The next question is from the line of Rahul Jeewani from IIFL Securities Limited. Please go ahead. Yeah, I so, thanks for taking my question. Can you comment on how our organic portfolio would have done, in terms of growth, during the quarter, excluding the derma acquisitions which we did? Rahul, I think, you know, we had a market-beating growth again. The volume was quite depressed in the first quarter. I think what is happening, when most of the growth is coming from the price hike as well as NI, we will progressively seeing the first quarters being depressed across. Last year also, if you remember, the first quarter was in the vicinity of 2%-3%. Am I right, KK? Yeah. Of course, as per the AWACS. The first quarter, first quarter remained depressed, but we were, we were quite high on our growth. We were, we are like a high single-digit growth, very close to the double digit on an organic basis. sir, you are expecting- To maintain that, you know, we should be 400 basis points above the market. Sure, sir. So this high- single- digit to low- double- digit growth you are saying, we achieved during the quarter? Yeah, I'm saying the low- digit, low- single digit was the market, and we achieved, we did a high- single- digit. There was a good gap in the first quarter, and we expect this to keep up. Remember, post Q2, when the at-risk launches get regularized, there is a lot of primary sales which will start coming, which we have not been booking in the last couple of quarters. Sure, sir. Any guidance for the full year in terms of how you are looking at the growth on the organic business? Should we start inching up towards a low double-digit kind of a number by the end of the year with the launches which you have in terms of Glargine, liraglutide, and then the four own R&D products also, which you are targeting? Yeah, around that will be fair to assume. The only caveat is we have to see, as always, how the market behaves. This year we should be at least 400 basis points ahead of the market, and market in our, in our view, would end up at around that 8%, at least 8%-9%. What you're saying is actually true. Okay, sir. With we having a very strong pipeline of launches going into second half of this year, and typically we have seen that in the past, whenever we do these new launches, our gross margins tend to be on the lower side. Second half, our EBITDA margin profile could be slightly lower than what we do in first half of this year. That is what we expect as of now. That is the reason the guidance is more at 35% by the end of the year, the gross margin may be at 200 basis points lower than the first quarter. That is what we expect. Sure, sir. No, that's it for me. Thank you. Thank you. Thank you. Ladies and gentlemen, may we request all the participants to use their handset while asking a question. This is required to ensure optimum audio quality on the call. Thank you. We'll take the next question from the line of Mehul Sheth from Axis Capital. Please go ahead. Yeah, yeah, thank you for the opportunity, sir. Sir, first question around your the 10 molecules that you have highlighted that will be getting launched over the next two years, and you have investment of around INR 30 crore on an aggregate basis. Can you talk something more on, like, which are molecules are like FDCs, but which all molecule you are targeting and all, across like diabetes? Yes, see, you see there's a slide which we, where we are talking in a little bit of a detail. We can't, though it is in public domain, but we still can't, you know, talk it, talk about it. There are a couple in diabetes, there is couple in diabetes complication, there are couple in cardiovascular, and there are some in dermatology. The products are quite exciting and we and we feel, yeah, and we feel that we will have some kind of exclusivity for some time because we've been filing from our side. The good thing is that two of our products, the phase III is now completed and we are going towards submission. Okay. sir, on this INR 30 crore of investment, what would be your expectation over, say, mid to long-term, like what kind of revenue you can generate from this? This INR 30 crore... We haven't thought it that way, that what will be the... Because, you know, typically this is a long cycle. You know, the brands keep on growing over a period of time, so we have really not thought about that. If I have to tell you something, I think all these brands which we are talking about have at least a runway of INR 8-INR 10 crore in the first 12-18 months. Okay. sir, one more question, like more of a bookkeeping kind. What would be your tax rate guidance? Like, right now, you are at 17%, but what would be for next, say, at least two years, 2025, 2026, your tax rate? For, for this year, it will be around 14%-16%, for the, for the current year. Next year, we'll, we'll update you later. Okay. Thank you. That's, that's all from me. Thank you. Thank you. Before we take the next question, a reminder to all the participants, anyone who wishes to ask questions, may press *1. We'll take the next question from the line of Nikhil Mathur from HDFC Mutual Fund. Please go ahead. Yeah. Hi, sir. Good afternoon. I'm audible, right? Yes. Yes, very much. Yeah. Sir, this INR 30 crore spend that you're talking about, just wanted to check, in a normal year, what is the spend like, comparable spend? We don't have a comparable as of now, no. You know, it is a little difficult to kind of, you know, put a number to it, because we had been putting money on outside invest, sorry, outside manufacturers also. It is not that we were not doing it, but we were not doing it on our own. Right now, you don't expect that this INR 30 crore out, will be out of what we have been doing. This is very much a part of what we do organically. Okay. I mean, look, looking ahead, this sort of spend should continue, right? I mean, as we will keep doing R&D on multiple products and segments. Yeah, I mean, look, we always had a strength when we went to IPO. We're talking about applied, you know, research, and we have to our credit, a lot of products which we've got first time. You know, though, though they are not known, but they are good, reasonably good, clinically, you know, effective FDCs. We are kind of, you know, putting exclusivities around that. Right now we have 10 candidates, out of which five has already been submitted, and five will be submitted over the period of time. Yes, we are hiring more people. We want to strengthen this, this piece, because in the era where the unit growth is little sober, you know, little sober, if I could use that word, we would need more and more NIs in the future. Recognizing that last year, we actually, you know, had a good committed team on this. ... Right. Can you give some sense on the combined market size of these 10 opportunities, and in how many years or months, do you tend to achieve the optimum market share? Typically, if you look at the cycle of a brand, it is the 3rd year where it basically gets to a good, reasonable size, and from there, the growth is more or less linked to the market. The first three years will be, you know, little unconventional. Like what we are launching in the next two months, say September and October, is a combination of anti-diabetic. It's a DAPA combination with the sulfonylurea, which we have put in, and we've got the approval also. Typically speaking, DAPA is an INR 1,000 crore market. This one, the SU, has another INR 500-INR 600 crore market. We, we think there's a lot of sense in putting it together. As I said in the last call, it will be fair to expect the INR 8-INR 10 crore per brand because we don't take the brand unless and until at least we are sure that it will give us INR 8-INR 10 crore during the 12-18 months period. All these products have been planned that number at least. I mean, of course, we'll go to the market and see what happens. But as our plan, it will all be INR 8-INR 10 crore. We will be possibly having them in a better gross margin situation because they are developed inside. Therefore, that premium which you pay for the first six months, nine months, will be reduced. All put together from a commercial point of view, we find this very, very interesting when we compare it to in-licensing or we compare it to acquisition or anything, where you have to pay an upfront fee. Okay. Sir, on the margin front, now Oaknet is still in a situation where the margins will continue to improve. I mean, last year did 25%, this year's guidance is, I think 35%-36%. I believe that one, two, it would not. The derma business would not have still reached the optimum margins because the acquired brands have to be fully integrated yet. Also you are pointing towards standalone organic growth being better in the coming quarters. Correct. I'm just wondering, both these tailwinds will get fully offset by the INR 30 crore spend and some bit of gross margin dilution, which you are saying will happen in the coming quarters. Mm-hmm. it will get fully offset? I'm trying to understand. Okay. Are you asking me that this INR 30 crore, will it, you know, will it poke a hole in the overall EBITDA? Is that your question? Yeah, INR 30 crore plus gross margin, some bit of gross margin dilution by a percentage point. Both these factors will fully offset the margin gains that you will be getting from the derma business ramp-up and also standalone growth being better? Okay, we haven't thought it, as, as deep, but, you know, what would happen is actually, our derma piece will start... Let me give you a number. In July, the derma, the Oaknet piece, actually grew by 6%. Am I right, Kruti? Yes. It was degrowing in the first quarter. In July, it is grown by 6%. You know, without being passionate, let me tell you, when we take brands without people and without distribution, this is a good performance in my view, getting business back in three months' time, because most of these, most of these acquisitions were last year, last quarter. Where will why am I not committing to a higher number? Because I am very, very clear on growth. We feel that we can gobble up a lot of growth, therefore, we don't want to commit too much on the margins. We would stick to a 35% kind of a margin and look for more growth revenues. You know, by now, all of us understand that once the growth in place, the margins do follow. Last year you saw, you know, you were 32%, and then many of us were little kind of, you know, hesitant in believing that it could be turned around in a small period of time. We are following growth with a very good margin. There is an upside, we would like to, to use that in growth rather than, you know, getting a higher margin. Understood, sir. Very well understood. Just one final question, slightly bookkeeping in nature. The past acquisitions, that amortization would still be sitting in the P&L, right? Are we close to a bit of amortization going off the books, or some assets getting fully amortized? No, the entire amortization, the amortization is entirely in the books of Eris, for brands. What do you think? Nikhil, the amortization is not expected to go down in the next three years. Excuse me, ma'am, I'm sorry to interrupt. Ma'am, your audio is too low. Nikil, this is Kruti. The amortization and depreciation, we are not expecting it to go down in the next couple of years. The run rate for Q1 and FY 2024 that, that we just told you, is expected to continue for 2025 and 2026 also. Okay. Are you sure? Okay. What are the CapEx needs for this year? There are no CapEx needs for this year. It will be just routine maintenance CapEx, which is 2%-3% of gross book. Otherwise, all CapEx has gone in. Got it. I have no questions now. Thank you so much. Thank you. Thank you. Thank you. The next question is from the line of Bino Pathiparampil from Elara Capital. Please go ahead. Hi, thanks for the opportunity. Most of my questions have been answered. Just on this depreciation and amortization, it's a pretty large year-on-year and QOQ jump. Is it all because of the amortization of acquisitions? Yes, that is right. There are two components, just to be completely complete. One is there is a new manufacturing facility that got commissioned in March, but that's the minor component of the jump. The major component of the jump is from the acquisitions. Understood. This is the new base we need to have. Okay, great. Thank you. Thank you. The next question is from the line of Neelam Punjabi from Perpetuity Ventures. Please go ahead. Yeah, thanks for the opportunity, and congratulations on some good set of numbers. My first question is on the YPM. On a per month basis, it's at about INR 5 lakh for Q1. If I look at your chronic-focused peers, the YPM goes as high as INR 7- INR 8 lakh. The next three to four years, are we looking to bridge this gap, or is this number the sustainable one, number? Madam, you know, the YPM depends upon the addition of number of people. If we add more number of people, it dilutes. While you are absolutely wrong, there are a lot of chronic peers who YPM is much higher. They are even at around INR 8 lakh, INR 9 lakh, INR 10 lakh also. That is also a factor of time. We being still relatively a younger company, we had more divisions, and because there are a lot of products which we are planning to launch, so that basically will build up YPM. We are planning to get to the same level of YPM at some point of time, and these new products will only help to aid that. Got it. That's helpful. Secondly, my question is on your PAT. If I look at the last eight quarters, on a trading 12-month basis, our PAT has been largely flat. Of course, this is due to the acquisitions and the costs that have been associated with it. Going forward, over the next two to three years, can we start seeing some PAT growth with the top line growth and margin expansion playing out? Yes. In fact, as you pointed out, the acquisitions were dilutive last year. They are not supposed to be dilutive this year. We can look forward to a PAT growth by the end of the year, you know, which will only continue and accelerate in the coming years. Got it. Okay. Last question is on trade generics. If you could highlight, what was the trade generics revenue during the quarter? Yeah. I-- it was, I mean... You see that, on a, you see a growth, a better growth in the branded business than the consolidated, which basically excludes EHPL. EHPL growth, the trade generic growth, has been compromised in the first quarter, and that is what we have, you know, kind of given a heads-up to everybody also. Got it. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Harshal Patil from Mirae Asset. Please go ahead. Good evening, sir, thanks for the opportunity. Sir, most of the questions are answered, just need one clarification with respect to the interest cost. We did say that the net debt has come down, our overall finance cost for the quarter has gone up. I mean, if there's anything that I've missed in the commentary? No, see, the net debt has gone down because the repayments would have happened at the end of the quarter. You know, whatever the collection is, but the interest cost is, by and large, compared to last year, is high, but if you compare it to the last quarter, it's the same. Okay. Okay, the rate of interest you say is the same? Right. I guess last quarter we had about INR 88 million, and I think this quarter we are almost, like INR 173 odd million. Yeah, because we, this happened at the end of March. Yeah. Right. Right. Right. Right. Right. Yeah. That would not be the component of that acquisition. Okay. Got the point, sir. Got the point. Thank you, sir. Thank you. Thank you. Participants who wishes to ask questions, may press star and one. The next question is from the line of Ankur from Quasar Capital. Please go ahead. Yeah, hi, sir. Thank you for the opportunity. Just one question. Like, how would you think about the rest of, you know, like some of the elements of the portfolio related to diabetes and cardio are obviously doing very well? Can you just take out some time to explain, you know, therapeutic area-wise, that how are we doing? Are there areas where we need to consolidate? Are there areas we need to focus more? Like, if that could be explained, it would be great. Yeah. You know, that's a little broad-based question, but I'll try and answer as, as, briefly I can. If you look, we basically have our therapy areas divided into the conventional one and the newer therapy area, which we call the emerging therapy area. As of now, dermatology has become a very, you know, very important area for us, just standing next to the diabetes, cardio, and the VLM. That's one area where, which we are very positive about, especially we have some good launches, and we are seeing a good traction in, a couple of brands which we have bought. Derma becomes the new, you know, the new segment for us. Having said that, this year we expect the VLM to do better than, it has been doing, because there are a couple of launches.... which are exciting in that area also. Put together, we would rather like to see all segments, growing up, but, the speed, if you want to see the speed, depending upon the base, dermatology, VLM, and women's health will right be at the top. Okay. Just one follow-up, like just on a strategy basis, is the focus on, focus to develop mother brands for each therapeutic area and focus on them, or it is to take each and every therapeutic area and go with a widespread portfolio? We have been focused on mother brand generally, because we've been chronic. Chronic, what happens is a progressive disease situation. You need one combination, then you need a double drug combination. It has always been good to focus on the mother brands, and we continue to do that because we feel the spillover of the mother brand into the new SKUs also. That continues. Okay. This wouldn't be the same in derma, because like you mentioned in the last call, that, the products aren't that big market size, they'll be, you know, small market size products, so you'll have to have a big variety of portfolio, right? Yeah. What you're saying is right. The size of the brands are very different from, in diabetes and in dermatology, but the mother brand theory still remains. It's like an extension. The brand will continue, and then it will be serving, related business. I'm just asking this from the point of view that, you know, whether this can help us in increasing the, you know, yield per employee, that, that is the main question. I'll give you an example. You know, we'll be able to better understand that. We had taken a brand called Demelan, say, from Glenmark. Demelan came with one SKU. It is a demelanizing agent. We launched 1 more SKU last month, calling it LSA, basically for truncal melisma, the large surface area. We will be launching a Demelan face wash in the next quarter. We keep on harping on the mother brand and then spreading it to different, you know, different disease areas or problem areas. That's how generally the industry is. Okay. Okay, great. Thank you. Thank you for this. All the best. Sure. Thank you. The next question is from the line of Prashant Nair, from Ambit Capital. Please go ahead. Yeah, hi, good afternoon, everyone. Just had a question on your M&A, you know, strategy or your thoughts going forward. You, last year was quite busy on this front. Do you feel now you are where you want to be in terms of portfolio spread or, you know, key segments that you want to be in, or are there still gaps that you would like to look at? Yeah, Prashant. We are little easy now on the M&A because the sum total of all the launches, which we think we'll be doing, is quite a bit. It will also be sit- a lot of it will also be sitting on the already acquired businesses. The you know, in a way, the plate is full from a brand perspective, and beyond a point, we would not like to dilute the bandwidth also. This year we would be easy on the acquisition, and this might extend to, you know, early next year also. The caveat is always that if there is something which is like, just like pathbreaking, it doesn't happen usually. That, with that caveat, yes, we are more or less done in the acquisition in the near future time. Okay. you know, how do you see, you know, with that in mind, balance sheet or debt levels change over the? Do you have any targets in when, by when you expect to pay down? We, we are simply working. The first priority is to pay the debt. You know, I've always, we've always maintained that. Every time we have declared a dividend, we've always maintained that, you know, if there is a debt, that becomes the first priority from the organization point of view. Most of the free cash would be going there. We don't have, as KK just alluded to, we don't have a lot of CapEx coming in this year. Last year was an investment year for us. With little CapEx, the routine CapEx, and no acquisition in sight, and not very willing also, most of the money will go into, you know, serving the debt. We believe we should be in the vicinity of INR 720 crore EBITDA this year. Whatever free cash comes in will go in servicing the debt. Okay, got it. Thanks a lot. Thanks, Prashant. Thank you. Participants who wishes to ask questions may press star and one on the touchtone phone now. The next question is from the line of Neelam Punjabi from Perpetuity Ventures. Please go ahead. Thanks for the follow-up. For our Oaknet business, last year, our full year numbers, in terms of top line was INR 250 crores, and we had alluded to in our previous calls that, this financial year, we want to cross INR 400 crores for our derma franchise. Are we on track to achieve the same? madam, we are not giving individual number as of now. We're only giving consolidated number, because all this has now become one. You know, a lot of launches and everything is happening, we haven't really kind of, you know, taken it that way. The overall number, the guidance is around INR 2,000 crore-INR 2,100 crore, and that would include everything, actually. Got it. Okay. Over the medium term, if you could give some outlook on how fast can the Derma business as a whole grow? Is it a mid-teens kind of growth for us? You know, please, you know, give us some time, you know. We are just, we are, we are, we are just, you know, kind of putting everything together. As I told you, July was a good place. We had a 6% growth as per the AWACS. Moving from here, double-digit growth is for given, we are trying to see if we can improve on that. Sure. Okay. one last question on the EBITDA margin. you mentioned that this year we are targeting about 35% EBITDA margins. is this like a sustainable number or, or over the next, over the medium term, with top-line growth, can we expect some operating leverage to play out? You look at the past numbers, we've always been on that kind of a number. It was only a blip last year because of acquisition and investment cycles. It's not, it's nothing new to the company. We've always been on those margins. Once the productivity goes in, the margin, margins do inch up. More than margins, we are interested in expansion of, you know, EBITDA. I think that's where we are focused on. Okay, that's helpful. Thank you so much. Thank you. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity. Sir, just to know, therapy-wise, number of MRs now with, with derma cardiac, separately and diabetes? Tushar, the Derma number remains at similar levels. Actually, we haven't added any MRs in Q1, so, you know, whatever numbers that you're running with, they, they pretty much remain similar levels. Understood. Okay. Just, if you would break the growth into price, volume, new launches. We can, we can have Kruti discuss that with you offline. We don't have the numbers handy. Okay, sir. All right. That's it from my side. Tusha- Tushar, largely the growth will be on, new product and price. The first five months are not very kind of encouraging from a volume game perspective. Also remember, there is a trend in the last two years, where the second quarter onwards, the growth is picking up, largely because, the price growth is generally coming up more in the next, in the second quarter onwards. Volume-wise, if you look at the first five months, not an encouraging sign in the, in the IPM. If you ask us, we've been doing better than the IPM, but the details I think that they will give you offline. Sure, sir. In fact, on the base portfolio, it's, you know, In fact, I would like to have your thoughts in terms of both at the industry as well as at the company level. You know, volume growth is relatively muted or subdued, so any specific reasons to highlight there? Can't say really, you know, there's I, I mean, it's strange that even I, we don't have a complete answer. You know, we can, we, we can, you know, kind of peripherally, we can tell you something, but we don't have a complete answer. It still remains. We know how, why the first quarter has not been doing well. You know, we have seen that we have kind of charted that data right from pre-COVID levels. We understand that the Q1 is being, is going to be a problem. It might be a problem even next year, and then it kinds of eases out. There is a little bit of a skew in terms of growth quarter-on-quarter. Volume growth not coming in is a sign which we, we are all trying to sort out. In the, in the short and the medium term, we are, we want the other, the NIs and the other things to do well. Having said that, chronic has still been fairing better than everything else, so that's a good place to be in. Chronic Derma, which is also largely chronic, has been doing better than the rest of the industry. Okay, sir. That's all. Thank you. Thank you. Thank you. The next question is from the line of Miten Lathia from Fractal Capital Investments. Please go ahead. Yeah, I think, I don't understand- I'm sorry to interrupt. Sir, your audio is breaking. Could you please use your handset and come in the network area so that we can hear you loud and clear? Is, is this good? Yes, sir, this is better. Please continue. Yeah. Just wanted to understand if there was a fair bit of seasonality to the derma portfolio or all four quarters broadly, have been the same? Yeah, there is a substance of seasonality. Generally, the rainy season and post the rainy season, the fungal infections are on the rise. Then what happens when you get into the winter season, it is the moisturizer and the dry skin which kind of balances it out. Technically speaking, the second quarter, that is July, August, September, has typically been the biggest quarter for dermatology overall industry. That would hold true for our portfolio as it stands right now? Yes, it would, because we have a large contribution from antifungal as of now. It should hold. great, sir. Thank you. Thank you. The next question is from the line of Harshal Patil from Mirae Asset. Please go ahead. Thanks for the follow-up, sir. Just one thing, since we're kind of focusing more on the three new emerging areas, like the derma, the CNS, and the single himself. We've seen a increase in revenue contribution of these three new therapy areas. Is there any aspirational level like maybe 35%, 30%, something that we have in our mind over the next two years from these new emerging areas? From a growth, from a growth perspective? Yes, sir. probably from the revenue contribution. Revenue contribution? Yeah. Yeah. Lower base will do better, that is for given. We haven't actually jotted down that over the years, what will be the contribution. Mm. Right now for this year, this year, the plan is. 26%. Hmm? Currently, we are at 26%. Yeah, currently we are at 26%. This, the contribution will inch up, but we haven't really put that number into the block to give you a accurate answer. Got that, sir. Amongst the three, derma, I guess, would be your fastest growing segment? Yeah, we wish and we want from both of... You know, we, the first quarter had this, you know, acquisition kind of an overhang. Yes. Once it is done, we expect derma to... We are, we are, in fact, we are quite excited for derma, to be very frank with you. We've had a couple of very good launches. Yes. We just launched something for the first time in India, three of us. That is a minoxidil booster. Minoxidil is a very large market for alopecia, you know, the hair loss. Correct. It was like 60% of the people were not getting gains from minoxidil because of an enzyme lacking. We just launched a product, innovative product, this one, coming from U.S., I think. We just hit the market. We are quite excited, and we are hitting with a very good moisturizer by the month end again. Our plate is quite full on that side, and we are enjoying the dermatology as of now. That's great, sir. Okay, thank you, sir. All the best. Thank you. Thank you. Thank you. The next question is from the line of Mehul Sheth from Axis Capital. Please go ahead. Yes, thank you. Thank you for the follow-up. sir, one question on your other expenses. I'm sorry to interrupt. sir, your audio is squealing. Uh, uh- There's a lot of disturbance at your background. Can you please come to a quieter place and talk? Yeah. Now it's clear? Yes, sir. Please continue. Yes. My question was on other expenses side, which is lower on a sequential basis. Any specific reason for that? What could be the quarterly run rate from here? First quarter, lower number of launches, little sluggish market. We would like to kind of, you know, put it together. The expenditure has been very linear to the number of new introductions. In the first quarter, there were not so many. They started in July, that's a clear-cut reason. Okay, sir, one, one last question on, your, like, linagliptin launch on post patent expiry. What are the expectation on that? Any other such launch, pipeline or opportunity, do you have any visibility on that, like, there are any new products? You know, we can't talk about this. You know, if there's anything, I mean, there's nothing as of now, even if there is something, which we can't talk about it. What I would request is please understand the model, you know, how do we approach it? Even I would not be able to say anything on linagliptin, because as of now, it remains the way it is. I can just tell you that FCM, we got a favorable order yesterday. Yesterday or day before yesterday. Out of four, what we have attempted, in two such things, we've got a favorable, you know, favorable judgment. One is the dapagliflozin, and now the dapagliflozin franchise is like INR 50 crore-INR 60 crore for us on a running basis, bigger than that. The second is FCM, which we launched with that risk, but, I think we've got the judgment in our favor. This market will now open up. That's, that's the nature of this beast. Thank you. Thank you, sir. That's helpful. Thank you. That's all from my side. Thank you. Thank you. We'll take the next question from the line of Ankur from Quasar Capital. Please go ahead. I was just going through this first-in-market combination R&D pipeline. Sir, can you explain whether this is going to be, we will enjoy any three, three-year patent period, or because of the combination, that won't be possible, it is just that the first mover advantage will be there to us? Yeah, yeah, yeah. The first mover advantage is a little elongated now. It takes a couple of months for the other people to join the queue. The first mover gets a little bit, you know, elongated, but it is not that three-year period where we have, you know, we have, we have done a study to patent. That's not the case here. They are all replicable, depending upon... I mean, it will take some time. The advantage could be as less than three months and sometimes as big as six months, depending upon what the other people have to do. Okay, sure. This INR 30 crore investment, like, this goes into the team, the filings, like, or is it a, like a yearly setup, that this is now earmarked every year for the R&D pipeline? No, it's like, it's like INR 3 crore a product. Generally speaking, INR 3 crore a product. Then most of the money goes into phase III clinical trial. Generally, in the FDCs, we do get around 250-300 patients to be on the trial. Okay. Everything, the major cost is in phase III. Oh, oh. Okay, sure, sir. Thank you so much. Thank you. Thank you. We'll take the next question from the line of Janil Shah from JM Financials. Please go ahead. Yeah. Hi, thank you for the opportunity. I just need a clarification on the insulin guidance that we've given for FY 2024. The INR 50 crore number, will it include liraglutide combination, I mean, launch in 4 Q? Yeah, as of now, we have considered that, and, you know, as, as of now, what we can see, what we can see today, it should happen. Always there could be a, you know, these are new products, there are certain things which happen at the last moment. We can always. We do estimate a slip here and there, but as of now, the visibility is yes. Okay, what's the outlook for FY 2025? What's the strategy around insulin glargine, given that we also have a licensing agreement with Biocon? Give us some time for FY 2025. We haven't really put our head together there because the glargine, when it comes from MJ, is going to be very different for us, and that is the time we need to go, go back to the drawing board and, you know, plan ourselves. You know, glargine is a very big opportunity. Till this point of time, we have been doing a very, very reasonable kind of number, and our margins are quite, you know, they're quite stiff, actually. Once the MJ happens, then we, we would rather kind of, you know, put the, put on the accelerator. It will take some time. 2025 is a little far in our head. We need to sit and do. Okay, thank you so much. Thank you. Thank you. you. Thank you. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Mr. V. Krishnak umar for closing comments. Over to you, sir. Thank you. By way of summary, our branded formulations revenue grew at 21% this quarter, with a 30% growth in EBITDA. Our consolidated revenue grew at 17% this quarter, with a 31% growth in EBITDA. All strategic investments made in the last financial year have started delivering tangible and measurable results, starting with Q1 of this year. Our strategic priority for this year is to accelerate our organic growth and expand our covered market. Thank you for your participation in the call, and have a good evening. Thank you very much, sir. Thank you, members of the management. Ladies and gentlemen, on behalf of Eris Lifesciences Limited, that concludes this conference. We thank you for joining us, and you may now disconnect your lines. Thank you.