Ladies and gentlemen, good day, and welcome to Gland Pharma Limited Q4 FY 2021/2022 earnings conference call. 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. Sumanta Bajpayee, Finance and Investor Relations, Gland Pharma Limited. Thank you, and over to you, Mr. Bajpayee. Thank you. A warm welcome to Gland Pharma's earnings conference call for fourth quarter and financial year ending 31st March 2022. I have with me Mr. Srinivas Sadu, Managing Director and CEO, and Mr. Ravi Shekhar Mitra, our CFO, to discuss business performance and to answer queries during the call. We will begin the call with business highlights and overview by Mr. Srinivas Sadu, followed by financial overview by Mr. Ravi Shekhar Mitra. After opening remarks from the management, operator will open the bridge for Q&A session. Before we proceed with the call, please note some of the statement made in today's discussion may be forward-looking and based on management estimates. This must be viewed in conjunction with the risks and uncertainties involved in our business. The safe harbor language contained in our press release also pertains to this conference call. This call is being recorded, and the playback shall be made available in our website shortly after the call. The transcript of the call will be submitted to the stock exchanges and made available on our website as well. I will now hand over the call to Mr. Sadu for his opening remarks. Thank you all. Over to you, Mr. Sadu. Thank you, Sumanta. Good evening, everyone. Thank you for joining our earnings call for fourth quarter full year of FY 2022. Our best wishes to all our shareholders, analysts and their families. The industry continues to face heightened supply chain disruptions, not just delayed API supplies, but also primary packaging components. There was a considerable escalation of freight costs, utility costs, and several input material costs. Efforts were made to minimize the impact of these disruptions by qualifying new suppliers as well as optimizing our production planning. We remain committed to maintain our business resilience in these challenging times. Despite the ongoing disruptions, our business performance continues to remain strong. We closed this quarter, Q4 FY 2022, with revenue of INR 11,030 million. That is a year-on-year revenue growth of 22% for the quarter Q4 FY 2022. Our full year FY 2022 revenues stood at INR 44,700 million, which is a growth of 27% over FY 2021. Our PAT stood at INR 2,859 million for the quarter. This is a year-on-year PAT growth of 10% for the quarter. Our full year FY 2022 PAT stood at INR 12,117 million, a growth of 22% for the full year FY 2022 over FY 2021. We have generated INR 7,908 million of cash flow from operations in FY 2022. Our broad portfolio, differentiated business model, and strong execution capabilities have helped us deliver strong business performance during the year. I laid down four focus areas for the company at the beginning of this fiscal year. Regrouping and consolidation. With limited physical audits, we took the opportunity this year to complete extensive knowledge sharing across our manufacturing sites and strengthen the centralized quality function. We are very well prepared to handle any upcoming regulatory audit at any of our sites. Diversification of product portfolio. We made further investments in our R&D and were able to make 29 ANDA filings during FY 2022 as compared to 20 ANDA filings during FY 2021. Important to note that we initiated filings for our complex portfolio during the year. We made three hormonal filings and one complex peptide filing during the year, which have a market size of $1 billion. We also focused on ensuring timely new launches in the market. To highlight a few, we commercialized our penem portfolio during the year. We launched Ertapenem and Meropenem. We also launched other key products, including Foscarnet, Norepinephrine, and launched a total of 44 product SKUs in our core markets during the year. During FY 2022, upon excluding capital R&D expenditure, the R&D expenditure stands at 4.4% of our revenue for the period, in line with our historical trend. As of March 31, 2022, we along with our partners have 311 ANDA filings in the U.S. and 1,557 product registrations globally. Our human capital was further strengthened this year. We have focused on filling any gaps in skill set and also ensuring learnings from experience are well distributed across the organization. In terms of our manufacturing infrastructure, we have not just increased more capacity ensuring debottlenecking of critical areas, but have also worked on improving yields for products on existing lines. The new lines commissioned will support our complex injectables development pipeline for suspensions, hormones, and emulsions-based products. We hence ensure our manufacturing cost per unit is among the lowest in the industry despite maintaining high quality standards. All our plants continue to remain approved by U.S. FDA. Not taking much of your time, let me quickly run you through our business highlights across various geographies. Our rest of the world markets accounted for 17% of our Q4 FY 2022 revenue, and we have seen 13.32% year-on-year growth in revenues for the quarter. Our full year FY 2022 revenue for these markets stood at INR 8,481 million, a growth of 55% over FY 2021. Our key markets continue to remain MENA, LatAm and APAC. We registered our products, Dexamethasone, Etoposide and Digoxin in new geographies during the quarter. Enoxaparin Sodium was a key contributor to growth for the rest of the world markets during the year. Our core markets, namely U.S., Canada, Europe and Australia, remained strong during the year despite market challenges. Our core markets accounted for 64% of our revenue during Q4 FY 2022, as against 74% during Q4 FY 2021. We have seen 8% year-on-year growth in revenues for the quarter. Our full year FY 2022 revenue for our key markets stood at INR 29,248 million, a growth of 16% over FY 2021. U.S. market continues to surprise us with high price pressure on one side and at the same time encountering several drug shortages. While our U.S. business grew by 13% in FY 2022 over FY 2021, the launch pipeline remains robust for the coming year. The key products helping us achieve this growth includes Micafungin, Ketorolac Tromethamine, Heparin Sodium, Zopiclone and Dexamethasone. India market accounts for 18% of our Q4 FY 2022 revenue. Our full year FY 2022 for India stood at INR 6,278 million, a growth of 60% over FY 2021, primarily on account of volume growth of existing products. Our key launches include Caspofungin Acetate and Enoxaparin Sodium multi-dose cartridge with pen device during the year. We faced setback on the vaccine front, initially with delayed lifting of embargo on vaccine exports and later the geopolitical situation in Ukraine didn't help our cause. As updated over the last call, we have received export NOC and have also validated the commercial scale batches of Sputnik Light. Meanwhile, we have initiated work towards repurposing this facility to initiate biosimilar CDMO work. We are aggressively pursuing collaboration opportunities with established biologic players with some of the site visits already scheduled. We are working towards complementing our business, existing business with new growth avenues, and we are hopeful to maintain business resilience in this challenging environment. I once again wish everyone good health. I would like to now hand over the call to our CFO, Mr. Ravi Mitra, who will share details about our financial performance for the quarter. Thank you. Thank you, Mr. Srinivas Sadu. Good evening, ladies and gentlemen. Thank you very much for attending our fourth quarter and financial year ending 2022 earnings call. Our earnings presentation has been uploaded on the website. Let me begin with sharing the financial performance for fourth quarter and financial year 2021-2022. For the fourth quarter, we have reported revenue of INR 11,030 million, which is a 24% growth year-on-year basis. Revenue from operations for the fiscal 2022 stood at INR 44,007 million, a year-on-year increase of 27%. The key drivers for this growth were increase in volume of existing portfolio and new product launches. In terms of bifurcation of revenue during the FY 2022 as per markets, core markets comprising of the U.S., Europe, Canada and Australia has contributed 67%, followed by ROW markets adding 19% of revenue. India contributed balance 14% of the revenue from operations. Our core markets have seen a growth of 8% during fourth quarter of FY 2022 as compared to same period of last financial year. It has registered 16% growth during the financial year. ROW markets managed to maintain robust historical growth momentum and registered a 32% growth for Q4 FY 2022 and 55% growth on full year basis. India market grew by 137% for Q4 FY 2022 and 60% for FY 2022. In domestic markets, we have managed to grow both in our B2C and B2B business. Other income includes foreign exchange gains on operations of INR 272 million for the fourth quarter and INR 792 million for the full year ended March 2022. We have reported an EBITDA of INR 4,136 million in Q4 FY 2022, compared to INR 3,749 million, which is an increase of 10% compared to the same period last financial year. EBITDA margin for Q4 FY 2022 stood at 35% as compared to 40% for the same period of previous financial year. EBITDA for the full year ended March 2022 was INR 17,341 million compared to INR 14,370 million for the previous financial year, a growth of 21%. We have reported EBITDA margin for FY 2022 at 37% as compared to 40% of the previous financial year. We have managed to curtail the full impact of reduction in gross margin and increase in some of the expenses due to higher operating leverage. Our power and fuel cost has gone up by 30% in Q4 FY 2022 and 27% in full year FY 2022 due to increase in power tariff and oil and gas prices. Additionally, during Q4 and FY 2022, we have incurred a one-time legal and professional fee for our ongoing acquisition evaluation, amounting to about INR 55 million for Q4 and INR 70 million for the full year FY 2022. The total R&D revenue expense for the financial year 2022 was INR 1,932 million, compared to INR 1,199 million of the previous financial year, which is an increase of 61%. The increase in R&D spend will help us to maintain strong future pipeline and strengthen capabilities. It stands at 4.4% of the revenue for the full year FY 2022. R&D expense for the fourth quarter was INR 443 million, which is 4% of revenue compared to INR 302 million in the previous financial year. Increase in R&D revenue expense is due to higher number of ANDA and DMF filings and increased expenditure on complex products. We have commissioned our new R&D facility during financial year 2022, expanding our R&D capabilities. Our net profit for fourth quarter was INR 2,859 million, a growth of 10% compared to Q4 FY 2021. During the financial year 2022, our PAT was INR 12,117 million, which is an increase of 22% as compared to last year. We have reported PAT margin of 24% for Q4 FY 2022 and 26% for FY 2022. Our effective tax rate remains at about 25% in fourth quarter and for the fiscal year 2022. Cash conversion cycle stood at 187 days for the financial year 2022, as compared to 192 days as of last financial year end. The improvement was due to reduced inventory level. It has also helped us achieve better cash flow from operations. Total CapEx incurred during the financial year ended March 31st, 2022 was INR 5,221 million used for increasing API and formulation capacities. During the year, we have installed three liquid vial lines and four lyophilizers and one prefilled syringe line in our Pashamylaram facility. New lines will support our complex injectables development pipeline in areas of suspension, hormones and emulsions. One more API block was completed in our Vizag plant. We are building sufficient production capacity to support our next organic demand. Our ROC on ex-cash basis as on March 31, 2022 stood at 33%, and fixed assets turnover remains stable at 2.8 times for FY 2022. As of March 2022, we had total INR 34,483 million of cash, which we do intend to utilize for CapEx and to fund our organic and inorganic growth strategies. With this, I would request the moderator to open the lines for questions. Thank you. Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Sudarshan Padmanabhan from JM Financial. Please go ahead. Yeah, thank you for taking my question. Sir, my question is to, you know, we heard a lot about needle shortages and, you know, across other companies as well, some of the consignments getting pushed to the first quarter because of that. I just wanted to know in the fourth quarter, I mean, has that impacted any kind of products for us? And can you quantify if at all there has been any kind of a shipment delay to the first quarter because of this? Yeah, it did. You know, I did mention last quarter as well, there's a shortage of syringe supplies. If you look at our U.S. sales in last quarter, the growth is lesser compared to the, you know, normal run rate. That's primarily because of the syringe shortages, which we couldn't export because of the shortages. What we did was we got some alternate source syringes, but you know, we can't really change for the U.S. market, so we utilized those syringes for our domestic market and other markets. That's one of the reason you see we have larger third-party sales in the domestic market where we have utilized syringes from other suppliers where actually we can supply to the local market. There was an impact, but the end market won't suffer because of our model. The companies do have the pipeline, but it did impact in terms of export last quarter. Indirectly, it's also impacting the cost because we are airlifting most of the syringes to meet the demand and that's one of the reason why, you know, at the gross margin level there's an impact of that as well because the logistics has gone up when we're importing these by air. Yeah. Sir, what could be the impact of that? I mean, if you can quantify it and whether this issue has been resolved because it's been running, you know, for the last two quarters. I would say, you know, I can't put a number to it yet, but it will. We are catching up, I think, this quarter, next quarter. There is a backlog of orders what we need to supply. Still we are not in a stage where the pipeline is dry for our partners. But there's a backlog of orders for us. You know, this quarter there is still shortage of about 3-4 million syringes, but I think by next quarter everything will be on track in terms of the syringes we have promised to deliver. Sure, sir. Sir, you know, on the cost front, I mean, you talked about the gross cost as well as, you know, the cost impacting on the power and fuel and other expenses. If I'm looking consistently at our gross margins, I mean, they have been coming down from 55%-50%, and so has the EBITDA margin. Now, going forward, I mean, are we going to see, you know, an improvement from the current levels or, you know, given that, you know, the fourth quarter was a confluence of, you know, several issues, including shortage of syringes and cost escalation, I mean, can we expect some kind of a reprieve in terms of some kind of price increase and some kind of, you know, basically, you know, margins increasing going forward? Yeah. In my previous calls also I said our gross margin, the way you look at it, is a little different than a front-end company. Also because of the business model. You know, a quarter where we have a larger portion of contract manufacturing, yeah, gross margin looks better. That's one area. If you look at our business last quarter, there's lesser contract manufacturing business. Secondly, U.S. portion of our business is lower because of the impact where the margins are higher for us. If you look at just the U.S. business itself, in fact, our gross margins have increased over previous, when we look from the material point of view. The other key thing is, you know, gross margin. There's also lies a component of logistics costs because when we build the revenue, it includes the transfer price plus the profit share. Now, profit share element includes, you know, the cost of logistics that deducts that and the distribution cost, and then they share the profit. That is actually billed as a revenue. Unlike other companies where everything is going at the bottom line, not in the gross margin level, for us the distribution costs and also the logistics costs what our partner is importing, that also gets into the gross margin level. At least what we share, right? I mean, 50% or 60%, depending on our profit share modeling, that also we're sharing. That's deducted and then the profit share is shared with us. That way there's an impact on the gross margin. The way we look at gross margin should be different for Gland, just because of the model we adopt. The margin, there's a pressure because of the logistics cost, which is actually lying for all the U.S. market. It's also lying as part of gross margin. It should come back to normalized margins as well as EBITDA once I think the external environment becomes a little better. This environment, I mean, on the sales, you know, you did mention that growth, you know, you are looking at 20%-25% kind of CAGR. I mean, are we looking at any kind of a margin guidance that you would like to give, I mean, from FY 2022 base? We internally always keep the margins around the gross margin. Like I said, that's not a criterion for us. At the EBITDA margin level, we always look at 35%-37% levels of EBITDA margin. At the PAT level around 25%. That's how we internally always look toward that. We are confident of delivering the 25% growth, you know, that pipeline should be there. It all depends on the mix. I can't really give a growth guidance yet. You know, we try to grow like historically what we've been doing on average, we try to do that. Sure. Thank you. Thank you. Next question is from the line of Shrey Jain from Iroha Investment Management. Please go ahead. Sir, hi. Thank you for taking my question. On the vaccine, you mentioned that, you know, there's a, you know, repurpose of the facility that is being planned. Wanted to ask two questions on this. One, was there any kind of write-off on the vaccine business given that, you know, we had some commission benefits or is there We have not done any fill finish batch other than the validation batches. That will be very small quantities. As of now, there's no write-off quantities yet. Whatever we bought or, you know, in terms of bags and all that, it can be used for the biosimilar production as well. As of now, there's no write-off for that. Got it. The second question on the vaccine front was on the timeline or, you know, rather the, as well as the cost for repurposing these facilities. Does that entail some timeline or would that be, you know, immediately swappable? Just wanted to visualize that. You know, when we say repurposing, whatever lines we have installed, because they're not gone for commercial production, there's nothing much involved in terms of cleaning up. One line we need to clean up because we have taken validation batches. That doesn't involve too much of expense. Already, we have started discussing with some of our partners and couple of visits have already been done. Hopefully, you know, pretty soon should start some work. At least the preliminary work will be starting soon. Important. These will be repurposed to biologics. That's the right understanding, right? Right. Biosimilar. Yeah, biosimilar biologics. Got it. My other question was on the China, you know, NMPA inspection you'd mentioned in the last quarter. There would be some sort of update that you would be able to give us on China exports. Is there something that you could talk about? Still because of the shutdown, we are not getting any dates from them yet. We continue to develop products for that, and we're going to file as planned. From the inspection perspective, still because, you know, it's not open yet, we don't have a date yet from them. Got it. My last question again from the China front as well. On biosimilar, any kind of, you know, headway in terms of discussion between parent entity or any other entity, to you know, kickstart biosimilar in FY 2024 like you had guided for? Yeah. That's been ongoing. I think we'll also be doing some kind of work subsidiary of the parent. You know, while we are working with external companies to collaborate, we're also working with the internal subsidiaries. Got it. Thank you and congratulations for the great result again. Thank you. Thank you. The next question is from the line of Kartik Mehta from Klay Capital. Please go ahead. Hello? Yeah. Can hear you. Yes, yes. Hi. Just on the part that you mentioned at the start of the call about the shortages which you see. I'm just curious to understand the reason which are there now in the U.S. Is it due to short supply of raw material, or is it due to renewed FDA actions across inspections as inspections start? That's the first part of the question. How much percentage of your portfolio now, if you can probably help us, is under the list as per the U.S. FDA, please? No. The shortages I talked of have nothing to do with FDA. Mostly it's the manufacturing sites in the U.S. with various reasons. For example, I was talking about components, whether it's wires or stoppers and some of the process materials like tubing, filters. Most of these supplies were going towards vaccine manufacturing. It got diverted to that. That's one of the reasons. There's a lot of backlog for them to supply to the regular injectable manufacturers. The lead times have really gone bad, you know, for most of these components. That's one of the reasons we are quickly trying to identify other manufacturers who can do it. Some it's easier to change the suppliers, but some difficult depending on the technicality of the item, what they're using for a particular product. The reasons, this is one of the reasons, but there are also reasons around the manufacturing issues happening at sites in U.S., whether it's labor shortage or reduced manufacturing base. Post-COVID, there have been some disruption in that. The capacity is actually their output has come down drastically. I think last three quarters we've been seeing that. We've been holding up pretty good for the last, I would say five to six months, where the lead times were also high because we were having inventory. It started to impact few of our products, especially. This is mostly from the U.S. manufacturers, I would say. Just that while we are on this, you know, so you explained that it could take a quarter or so for this to resolve. In this case, are there options in your contract where pricing can be renegotiated in terms of this? And what is the overall outlook? I'm just trying to understand from your experience in manufacturing, especially in injectables, if FDA inspections across the world do start full throttle and assuming we are able to maintain our track record, do shortages increase in manufacturing largely in injectables? Is it the right way to look at this? Well, I've not seen a case where the prices have gone up in recent times. Always, you know, in spite of the shortages, still the prices are kind of normal, but at least it will not go down for sure. The volumes are increasing for certain products, which we never thought it will increase because of the shortages. Although the competition has gone up in injectables, and like I always said, people are exiting these, some of these products. While I'm on the material shortages, in fact FDA is aware of this. In fact, they have sent email a few weeks ago, what are the components which are having an impact on supplies and, you know, because they want to discuss with the suppliers as well. They're actively pursuing that because they are seeing more and more products getting in a shortage situation. We are seeing at least in some areas some development happening. It's just going to add some cost because we can't wait for them to be shipped by sea and lose time. We are airlifting most of that which we were earlier bringing by sea. The margin pressure is there on that. At least, you know, we should cater to the market and at least capture that demand when it's there. Some of these contracts where other companies are not able to meet the demand and those contracts are getting converted to companies who are supplying, you know. We got a couple of contracts like that as well. It's an opportunity to do that while the price pressure, the cost pressure is there. Yeah, my last question, if I may. What is the CapEx plan for the next three years and in terms of, if you could specify, which, so lines you will be investing in? Yeah. We plan to spend INR 300 crores next year and about INR 250 crores a year after that. We are currently spending on- Sorry. You said INR 300 crore is FY 2023, right? Yes. FY 2023 and 250. Okay. Yeah. Yeah. Sure. Yeah. Currently the project which is online and Pashamylaram is our site for complex injectables and expansion of a warehouse capability and few more lines, including bag lines, including Lyo addition in Penem. These are basically the immediate CapEx plan. In the API side also, we are expanding for increasing the capacity of Enoxaparin production. This will take care of our near two years CapEx plan. If you see, we have added almost four lines in the current year. We have increased from 24 to 28 lines. But we are still not able to meet demand of Penems. We are trying to invest into that. Also bags, we are 100% capacity utilized, and we're not able to cater to the entire demand, so we are planning to invest into that as well. From the API perspective, if you see, about a year ago, internal APIs were about 25%. 25% was internal. Now they've gone to about 33-35% of the revenue is coming from internal API. We continue to invest into that because, you know, at least the risk of the suppliers not supplying will go away. Substantial investments are going into that as well. Sure. Thank you. Thank you. Thank you. The next question is from the line of Kunal Dhamesha from Macquarie Capital. Please go ahead. Hi. Thank you for taking my question. The first one, we earlier alluded that that, you know, during COVID times our product mix shifted towards COVID products like Enoxaparin, Hydroxychloroquine and Remdesivir from the products such as, which are used in elective surgeries took a hit. Now with COVID normalizing, are you seeing that mix shift back to the elective surgery portfolios like Penems and you know, antibiotics and all? Yeah. I would say, you know, the COVID portfolio has gone away about two quarters ago, other than one, two products. Otherwise rest of it is coming back slowly. Some of the products have not caught up like before, but I think the portfolio mix is it getting back to the earlier days, yeah. Is it fair to assume that those products typically have better margins than the core products like Enoxaparin? Well, I think if you see the margin-wise, all the new products will give a better margin. Whatever we launch, I think that's the key thing which will give better margins than the old products coming back because the competition also increased. I won't say that those margins will go up. Whatever the margins they were there pre-COVID, you know that will continue. But I think products what we are launching recent times, you know, if you look at our growth, over 9%-10% comes from these new products. Volume and also the volume growth, right? I mean, if you look at last year, 21% growth came from that, whereas the price actually have gone down by 2% or so. The price is still, I would say, you know, similar or 2% lower. I think the volume growth and the product launch growth, that's the key for us. Sure. Just one logistics question. What was the profit share contribution of this product? About 10%. Okay. Sure. Thank you. Yeah. Thank you. The next question is from the line of Amit Shalke from Haitong Securities. Please go ahead. Yeah. Thank you for taking my question. First question is related to staff cost. I don't know whether we have addressed this in the opening remarks, but it has gone sequentially by around INR 15-odd crore to INR 94 crore-INR 95 crore. Any reason for this? Or is it related to the plant expansion we have done? Or is it the new base, if you can explain? The staff cost? Yes. Yeah. I think it's a combination of both. One is the additional lines coming in, so recruitment had happened in those lines. The other is January is the time where we get the raise. The increment quarter. That's the impact you're seeing. We should assume this as a new base, right? Some incentives won't be there every quarter, so that will go away. Sure. Okay. Annualized basis, if you see which the increment is normal as per what we have been seeing. As Mr. Sadu said, there's a headcount increase. Yearly basis, that can be the rate. Sure. The second question is related to Enoxaparin. During the year, we have seen one of our partners losing a lot of market share in the U.S. If you can highlight any reason for this. Also we have added one more partner in the U.S. at the end of the year. Should we see good growth coming in FY 2023? Yeah. The both partners were already there. Because of the margin profile, the partners and the market shares they were getting, it didn't make sense to continue with that, with the low volumes. That's why they kind of hold off till the margins improve. The other contract, you know, we have a GPO contract which I've mentioned. The ramping up is happening, and they're still selling off the product what they bought from the innovator earlier. You see from this quarter, we are also a bit slow because of the shortage of syringes. We don't want to take all SKUs immediately, so we kind of limited what we can supply. From this quarter, we are seeing a ramping up, and probably more ramping up will happen from June, July. Sure. Also supplementary question to this for the global supply which we are doing for Enoxaparin. How far we have reached in terms of getting approvals in other markets? Are we still expecting some more approvals from new territories, or you think we have already achieved the geographic expansion in terms of supplying Enoxaparin? No, there are several other markets still, you know, there's opportunities where we are looking at because the competition for this molecule is comparatively low compared. In fact, there are several markets where the competition is lower than the U.S. We are still there. Only the area, the geography where we're not looking at is Europe because of the price pressure there and also the complexity of registering the product. Other than Europe, we are looking at any other country, every other country. Sure. Just last question on the U.S. market. You have to talk about the launches which are coming in FY 2023. If you can highlight any color on the same, in terms of the business opportunity, in terms of the complexity, anything which if you can provide. Yeah. In terms of value, I think it's about $3 billion, three quarters. Next three quarters we have launches planned, which is worth about $3 billion. Products about 24-25 molecules launches are planned for the next three quarters. In terms of trend, should we expect higher growth or similar growth in the U.S. in FY 2023 or it will be too early to call out? It's too early, but you know, because the base is high, so the percentage growth will not be same. As if you look globally, we're trying to get at least a 10% growth at the company level, launching more products in other rest of the world markets also. If you look specifically for U.S., it may not meet the same percentage like earlier because the base is high. At the company level, we are still looking at 10, 11% of growth coming from the new products. Sure. Thank you so much for taking my questions. Thank you. The next question is from the line of Ankush Agrawal from Surge Capital. Please go ahead. Yeah. Thanks for the opportunity, Mr. Sadu. Firstly, you know, on the growth slowdown in the core markets, you highlighted one of the specific reasons around syringes, right? Any other reason that you want to highlight qualitatively that has affected the performance and, you know, and similarly on the margin front as well. You know, is it safe to assume that the reduction in margins is primarily because of the lower share of developed markets in this quarter and the logistics and syringes that you highlighted? Yeah. One is of course, you know, the other also, you know, if you look at launches, you know, on an annualized basis, you should see launches. It might go up and down in a quarter. Launches were fewer in the last quarter. Also some products, we didn't launch, we actually because we have inventory for the launch batches, but then the follow-up batches, we can't let the market dry. We're waiting for the components to come in so that, you know, we can supply on a continuous basis. Some of the launches which we actually planned last quarter will go, you know, this quarter, end of this quarter. Right. On the margins front, is that because of the market mix and, you know, logistics and syringes primarily? Yeah, absolutely. One is if you look at the percentage for the year and for the quarter, U.S. percentage has come down. That's one. Then the logistics cost. If you look at the plants where our plants are located, Vizag, there was issue of power supply. We've been running on diesel for almost 44-45 days. That became expensive. On an annual basis, there was a big impact on power, diesel, utilities costs, and of course the input and the logistics costs. Yes. In your opening comments, you mentioned something about an inorganic acquisition that some costs have been spent. Can you highlight something on what front it is? Like is it development assets or, you know, API assets, something, what could be the potential size? See, we cannot comment on the target we are currently evaluating, but Not the name, but just say its focus area. Yeah. Focus area, like we also said earlier, is in line with our strategic target. One is that of course the backward API capability fermentation that we don't have. Second is on products and complex injectables side. Yeah, that is clear. Your focus areas are clear. I was wondering if there's any specific area attached to this, inorganic acquisition or is this multiple acquisition as well? Yeah, yeah, we cannot comment right now. Okay, no worries. Lastly, sir, on the vaccine, so since you're repurposing the plant, so it's safe to assume that the vaccine project itself is, you know, out of the box for Gland at the moment, right? I don't know. I won't say out of the box because at least one line we are keeping it like that, and the other line, like I said, where we have not produced any vaccine, that block we are trying to work with the bio space. The other line is still going to keep it for a few more months because the discussion is still on, so we don't want to shut it. If there's any opportunity, we want to get it in there. Okay. Sir, anything that we will salvage from this in case, you know, the vaccine project doesn't go on, like earlier at the time of contract, you had mentioned that it's a take or pay kind of contract, so will we be getting anything out of it? I can't comment on it. No, it's ongoing discussion. Okay. Because, I think it's between nobody's hand, that's the problem. Yeah. Right. It accelerates our biosimilars opportunity, right? Because we had been commenting that we will wait for the vaccine to end by end of 2022, and then Q1 of 2023 will start, but this accelerates that, right? Yeah, yeah. That's why, you know, we have already initiated that, and some of the companies have started visiting it. Because we thought, why keep the entire plant as well? Right. You know, we can start working on one line while the other can be used for this. Okay. Thanks for that question. Thanks. Thank you. Thank you. The next question is from the line of Nitya from Bernstein. Please go ahead. Yeah, thank you. FY 2023 seems to be a larger LOE year, as in there are more number of injectable brands losing exclusivity. Is it fair to assume that on a relative basis compared to, let's say, FY 2022, your share of new launch contribution will be higher, and therefore profit share will be higher? Is that a fair characterization? Yeah, at least the second half of FY 2023 should look like that, Nitya. Understood. Quick tactical one. By when do you expect the partner's volumes in Enoxaparin to entirely shift to you? What time frame? We are looking from June, July. By June, July, all of their market share would have shifted to Gland, right? Yeah. Correct. Correct. Understood. Just a related question to what another gentleman was asking. You've been talking about M&A for the last year and a half. If you can just update us on where you are, and are we likely to see more traction in the coming months? Yeah. Hopefully, we should give something, Nitya. Because last year it's more like, you know, the valuations were all over the place. Now there's some sanity around the valuation, so we are working actively on couple of things. Hopefully we should give something in next few months. Yeah. Is there a priority between the three areas that you had mentioned, which is controlled substances, fermentation API, or complex injectables, Nitya? Priority I would say complex injectables. Advanced stage assets, I think that's priority for us. While you know we have our own pipelines for next three years, which covers about INR 10 billion, there are several other products where we think we can expedite using cash on books. That's our main priority. Then second, of course, is fermentation. Understood. Thank you so much. Thank you. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal. Please go ahead. Yeah. Thanks for the opportunity. Post considering this partner's volume as well for Enoxaparin, overall globally, what would be the market share of Gland for this product? Globally I can't tell because Europe also is a huge market for this. China is a huge market where we don't have a presence. I mean, globally probably 10% maybe. Yeah. Because volumes are huge in other markets also. Probably 10% would be my wild guess, yeah. Got it. You highlighted that Europe is not a geography to look for at least for this product. China would be the key market to look in terms of significant expansion for this product. Yeah. China and also other markets, they're still there. See, if you look at the Chinese manufacturer's presence, they're big in Europe, they're big in China, and they're big in U.S. Other markets still, they don't have presence because of the complexities of registration in different markets. If you look from the margin perspective and the opportunity perspective, there's still a lot of value left in other markets as well. We are focusing that also. If you see our growth of Enoxaparin as a molecule coming is mostly from rest of the world markets. Now, with the U.S. contract coming in, you'll see substantial growth in U.S. also. China is an area also, but I would say that there's a presence of Chinese players in that. We have to go and fight with them where they're backward integrated. Yeah. In fact, I was just about to ask that, given that the key raw material lies in China, so there, you know, what would be the right to win the business for this product in China market? The good thing is, you know, we are backward integrated until heparin level. Now the current procurement of crude heparin we are getting from different sources. Mm-hmm. There are also sources available which are cheaper than China today. That's where we are trying to source for our ROW and India business. Once the supply chain is secured, our priority is first how to increase margins in the U.S. We're trying to use whatever crude heparin we are getting from different sources and get approved for our ANDA in the U.S. Once we have enough supplies for that, we'll start looking at other markets. I think currently our focus being to increase the margins for the U.S., whatever we are going to supply next few years for this contract. Got it. Just on the R&D spend, annually the amount has been increasing considerably. Like, this year it's almost INR 227 crore compared to INR 122 crore in FY 2021. Given that we have complex filings coming up over next two to three years. Could you just quantify, like, what kind of R&D spend you have in FY 2023, 2024? If you specifically look at this year, you know, we have to look at the CapEx. We have CapEx R&D, right? I mean, because we have built this new R&D center and equipment is bought. That's like a one-time item. If you remove that, the increase is about 0.6%. Yeah, 0.6%. 0.6% increase, which is not substantial. You know, on an absolute number it will increase. I always said you should always look at 4%-5% of the revenue as the R&D spend. With complex injectables coming and the percentage of complex injectables going up. So the absolute number will increase, but percentage-wise it should be 4%-5% of revenue. Got it. Just thirdly, there have been multiple inspections at the peer site, probably the drug shortage triggering the inspection. In fact, Gland does have existing products or probably the products in the pipeline there which are part of the drug shortage list of U.S. FDA. Any inspection on the near-term site or that is not yet triggered? Most of the inspections are walk-in these days, so we should be ready for any day. We hear every second day FDA walking into some site. We are all prepared for that. You know, we think, you know, even tomorrow somebody can walk in any of our site. That's why we need to, unlike earlier, at least some they were coming announced inspections. Now mostly they're unannounced, so we have to just go by day by day, yeah. Okay. Done, done, sir. Thank you and all the best. Thank you. Thank you. The next question is from the line of Kunal Dhamesha from Macquarie Capital. Please go ahead. Yeah. Thank you for the opportunity again. So slightly longer term question. In a sense, would you ever look at consolidating the ROW product portfolio into a separate facility, you know, in the near or medium term? Because I believe the compliance costs related to U.S. FDA, which is much higher, vis-à-vis, let's say, ROW market and, you know, that way you can improve the margin of the ROW portfolio. There was a debate always on this, but I think we want to keep the quality standard across the sites similar. We don't want to dilute that because in the long run that helps. From the corporate quality perspective, you know, we want to have a common quality systems across sites so that there's no confusion and different qualities at different sites. Maybe so there will be some margin pressure in ROW, but that helps to keep your regulated market business going up and having a clean quality record with the authorities. Sure. Secondly, as we you know said that we have increased our backward integration into API from roughly around 38%-44%. Can it give you know boost to our gross margin? If yes, what could be this, you know, the extent of that, you know positive impact on the gross margin? Well, I can't quantify, but for sure, you know, one is of course eliminate the risk, the other is increasing the gross margins. That's primary reason why we are expanding into this. Yeah, for sure there will be a positive impact on the gross margin. Would you have some products in the pipeline where you are actively looking to backward integrate? They're ongoing. I mean, every year, you know, if you look at, last year we filed about 11 DMFs. Historically we were doing like five to six, but this year we did 11 DMFs. You know, the rate we have increased. Some of the R&D spend is also going into this, right? It's a continuous process. We are identifying APIs so that your margin profile is better. Sure. Thank you. Thank you. Thank you. The next question is from the line of Ankush Agrawal from Surge Capital. Please go ahead. Hello? Hello. Go ahead, sir. Yeah, go ahead. Yeah. Just one clarity. Like from last couple of quarters, we have seen our business, wherein, you know, exports to U.S. from India has grown because the Indian partners have grown. Wanted to understand, is the profitability on this business similar to, say, export to a U.S. partner? It's similar. There's no difference with that. There's no difference. The number of products these companies have, you know, they started launching more products and also new partners. You know, we have added Piramal as a new partner. Some of the partners from India who are selling. Sun Pharma is also one of our partners who's selling products, more products now in U.S. We have more Indian partners who are selling, so the volumes have increased that way. Right. I mean, couple of years you expect share of Indian partners increasing. Is that? Because you know, more products to more players who have front end in U.S., their share has also increased. That's an increasing number. That's why you see an increasing number. Right. Got it. That was all. Thanks. Thank you. Thank you. Thank you. Participants, you may press star and one to ask a question. As there are no further questions, I will now hand the conference over to Mr. Sumanta Bajpayee for closing comments. Thank you. Thank you everyone for joining us today for our fourth quarter earnings call. If any of the questions still remain unanswered, please feel free to get in touch with us. Thank you and good night. Thank you very much. On behalf of Gland Pharma Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.