Ladies and gentlemen, good day, and welcome to the Gland Pharma Limited Q1 FY 2024 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumanta Bajpayee. Thank you. Over to you, sir. Thank you. Good evening, everyone. Warm welcome to Gland Pharma's earnings conference call for first quarter of financial year 2024. I have with me Mr. Srinivas Sadu, MD and CEO, Mr. Ravi Mitra, our CFO, to discuss business performance and to answer the queries during the call. We will begin the call with the business highlights and overview by Mr. Sadu, followed by financial overview by Mr. Mitra. After opening remarks from management, operator will open the bridge for Q&A session. Our earnings presentation has been submitted to the stock exchanges and is also available on our website. Before we proceed with the call, please note some of the statement made in today's discussion may be forward-looking in nature and are 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 of this call will be made available shortly on our website. The transcript of the call will be submitted to the stock exchanges and also will be available on the website. I will now hand over call to Mr. Sadu for his opening remarks. Thank you, all. Over to you, Mr. Sadu. Good evening, everyone. Welcome to our earnings call for the first quarter of fiscal year 2024. I want to start the call by wishing you and your family good health. We have started the financial year on a positive note. The first quarter has demonstrated the same. We have achieved a total revenue of INR 12,087 million for the first quarter of the current financial year. On a group level, we have also recorded EBITDA of INR 2,942 million, with a net profit of INR 1,941 million. As we completed the Cenexi acquisition during the first quarter, a straightforward yearly or quarterly comparison is not relevant. Hence, I will explain the business performance separately for better clarity. On our base business, during the first quarter of the financial year 2024, revenue from operation grew by 4% as compared to the corresponding quarter of the previous year. The company has improved gross margin, both year-over-year and quarter-over-quarter, sequentially, due to favorable geography and product mix. On base business, the company maintained a healthy EBITDA margin of 30% and a PAT margin of 21% during the quarter. Three of our sterile plants were recently inspected by USFDA. The outcomes of the inspections demonstrate our relentless commitment to being a quality-focused and regulatory-compliant company. Maintaining an unwavering focus on quality and regulatory compliance establishes trust with customers, partners, and regulatory authorities and can open doors to new opportunities and collaborations. The total R&D expense for Q1 FY 2024 was INR 457 million, which is 5% of revenue from operations. During the quarter, we filed five ANDAs and received approval for nine ANDAs. As of June 30th, 2023, we and our partners have put together 337 ANDA filings in the United States, of which 270 were approved and 67 were pending. The company has a total of 1,620 product registrations globally. On our Cenexi business, April 27, 2023, we acquired 100% of Cenexi, and accordingly, 2 months financials have been considered in the consolidated financials of Q1 FY 2024. For the two months, Cenexi clocked revenue of INR 3,214 million, with gross profit margin of 76% and EBITDA of INR 347 million. During the second quarter of every year, Cenexi sites will be having up to four weeks of annual summer shutdown. As we transition from pre-closing efforts to post-acquisition integration, a dedicated cross-functional team has been formed to drive Cenexi integration. A precise function-by-function integration plan is developed to solve existing operational issues and maximize synergistic benefits. The team's primary focus will be on expediting existing business transformation programs and driving required functional tasks. Efforts are also being made to develop a shared long-term business goal for Cenexi and Gland businesses, as well as to identify new opportunities that can be targeted using the combined capabilities of both entities, and to align collaboration and governance mechanisms for the successful delivery of integration initiatives. With this, let me take you through the business highlights across various geographies. On a group basis, the increased revenue from Europe and rest of the world is a result of Cenexi's consolidation. Our base business, after excluding Cenexi's financials, has shown positive business traction. Our core markets of the U.S., Europe, Canada, Australia, and New Zealand accounted for 75% of revenue during Q1 FY 2024, as compared to 82% in Q1 FY 2023. Total sales in the U.S. market grew by 23% on a quarter-on-quarter basis, declared by 8% on a year-on-year basis. During the quarter, we launched 23 molecules in the U.S. market, including regadenoson, ganirelix, neostigmine, and glycopyrrolate injection. We have also seen a higher volume increase on some of our old products, such as esmolol, caspofungin acetate, rocuronium, heparin, and acetylcysteine. Last year, we witnessed a business loss due to exit of our two key customers. I'm happy to inform you that most of the products from that portfolio have now found a new home and are in various stages of launches. Along with the U.S. market, we are also seeing an increase in sales in European markets. Our rest of the world markets accounted for 18% of our Q1 FY 2024 revenue, compared to 12% during Q1 FY 2023. We have seen 62% year-on-year growth in revenues for the quarter, primarily driven by the GCC market. We maintain an inventory of raw materials and packing materials to be able to cater to the demand. Our key markets continue to remain MENA, LATAM, and APAC. We put for effort into driving new partnerships and increase geographical penetration. The India market accounts for 7% of our Q1 FY 2024 revenue and has seen growth of 29% as compared to the same quarter last year. I now hand over the call to our CFO, Mr. Ravi Mitra, who will share some more insights about our financial performance for the quarter. Thank you very much. Over to you, Mr. Mitra. Thank you, Mr. Sadu. Good evening, ladies and gentlemen. Thank you very much for attending our first quarter earnings call. Our earnings presentation has been uploaded to the website. Let me begin by sharing the financial performance of the first quarter of the financial year 2023, 2024. We completed the Cenexi acquisition during the first quarter, two months Cenexi's results has been consolidated in this quarter. During the first quarter of the financial year 2024, revenue from operations at INR 12,087 million grew by 41% as compared to the corresponding quarter of the previous year, of which 37% was contributed from inclusion of Cenexi revenue and 4% from the growth of base business. Other income for the first quarter of the financial year 2024 was INR 375 million, which includes largely interest and fixed deposit of INR 351 million. There were no foreign exchange gains for the quarter. Instead, we had a foreign exchange loss of INR 42 million, which gets included in the other expense line item in the results. Foreign exchange gain during the same period in the previous year was INR 342 million. Gross margin for Q1 FY 2024 was 63%, a significant improvement as compared to 56% in Q1 FY 2023, due to the high gross margin of Cenexi. Being a CDMO company, Cenexi enjoys a high gross margin. During the period of May 2023 and June 2023, they reported a gross margin of 76%. On the positive side, our base business has also witnessed an improvement in gross margin on both a yearly and sequential basis due to improved margin from the U.S. portfolio. On a consolidated basis, we have reported an EBITDA of INR 2,982 million in Q1 FY 2024 and an EBITDA margin of 25%. On ex-Cenexi basis, the base business maintained a healthy EBITDA margin of 30%. In Q1 FY 2024, we witnessed an increase in power and fuel cost by 46% year-on-year basis due to high power and fuel cost at Cenexi. On our base business operation, we witnessed a 14% reduction in power and fuel costs during this quarter as compared to the same period of the previous year. In Q1 FY 2024, manpower cost increased by 160% year-on-year basis due to the acquisition of Cenexi. On our base business operation, we witnessed a 6% increase in manpower cost during this quarter as compared to the same period of the previous year, which is in line with internal estimates. Our net profit for the first quarter was INR 1,941 million, as compared to INR 2,292 million during the corresponding period of the previous year, a decrease of 15%. The EBITDA grew by 10%, increase in depreciation at Cenexi and foreign exchange loss for this quarter compared to the FX gain in the previous year, have led to a decrease in PAT. The PAT margin for the quarter was 16%, and the effective tax rate was 25.7% for the quarter. The total R&D expense for the first quarter were INR 457 million, compared to the INR 410 million for the same period of the previous financial year, and stood at 5% of the revenue from operations on an ex- Cenexi basis. Cash flow from operations for the first three months of the current financial year was INR 629 million. Cash flow from operation during the quarter was impacted due to the normalization of the working capital cycle at Cenexi following our acquisition. Cash conversion cycle stood at 233 days for the quarter, an improvement from the March 2023 level. We had a high inventory and receivable level at the beginning of the year, which has improved considerably during the quarter. We continue to monitor the working capital level to improve the cash flow from operations. Total CapEx incurred during the quarter was INR 687 million, largely spent on our Suite 9 Combi-line. We are adding new capabilities of microsphere Combi-line, an additional bag line in Pashamylaram facility in Hyderabad. Our ROCE on a next cash basis stood at 13% and fixed asset turnover at 1.9x for Q1 FY 2024. As of June 30th, 2023, on a group level, we had a total of INR 20,418 million in cash and equivalents. Due to loan on Cenexi's books to the tune of INR 4 billion, our net cash position was INR 16,356 million on 30th June. On Cenexi, we advanced to the post-acquisition integration stage in order to meet the strategic goals defined under the pre-closing stage. Cenexi integration is being pursued by a dedicated cross-functional team, and a detailed function-by-function integration strategy is being developed to optimize existing operation and realize synergistic benefits. The management team remain dedicated to the success of this acquisition. In this regard, we have begun to assess Cenexi's future cash requirements for CapEx, which will drive operational OpEx improvements and the creation of assets to accomplish future growth. With this, I would request the moderator to open the lines for questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from the line of Tanmay from Mirae Asset. Please go ahead. Yeah, hi, thanks for the opportunity. A couple of questions from my side. First, on the synergies that you spoke about, could you give some more granular details as to what kind of synergies are we expecting, maybe on the cost side or in terms of product portfolio? Secondly, in terms of overall cost for this, would there be any one-time cost that would be coming? Yeah. On the first question on the synergies, there are several, I would say. They have few technologies which we don't have, so we, we are now coming onto the portfolio, which we can make in that side. Especially, they have an oncology, a pre-filled syringe technology, which we don't have. There are some CDMOs which are using that having good profitable products. They also manufacture colored products. Again, the competition is very less in those products. And also some sterile gels. They have technologies in that as well. That's from the technology perspective. We are also in touch with several strong partners whom they have, who are looking at taking our products to rest of the world markets and some to U.S. as well. We are, we have shared some products with them, and they're in discussions. There's also a chance of our products going into other markets through, through this network. Some of these partners have getting manufactured at this site for Japan and some of the markets where European costs are still workable, but they're taking these products from some other manufacturers because of the cost benefit they get from RFW. Those are the products we're also discussing, if they can move to India. There are several areas where we are looking at from synergies perspective. Also, the cost benefits we are looking at, currently, they source a lot of materials from European suppliers. We identified the areas where we can coordinate and also, you know, make a common purchase so that there will improvement in costs. On the second question? Yeah, on the OpEx cost, there is no which is anticipated at this point of time. No one-off costs would be coming, right, in terms of consultancy or any other costs? No, all the necessary costs have been spent, but we... The one we are working about the integration- Yeah. ... that would be there. Other than that, there is no anticipation for any other cost. Okay, and what could that be in terms of quantum, if you could just roughly, if you could just share? No, we cannot. Okay. Thank you. Thank you. It's not a significant amount at all. Okay. Okay. Okay, thank you. That's more on a consultancy fee, what we charge for the, you know, to do the post-merger integration, so that's not substantial. Cool. Yeah. Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead. Yeah, thanks for taking my question. My first question is on the U.S.-based business. We've seen a very strong pickup quarter-on-quarter, and I think, sir, you mentioned in the opening remarks that the two customers where we had, we've been able to shift the volume to, you know, newer customers. Has that been reflected in this quarter, or, you know, should I assume that's flowing through or, you know, on the $72 million that we've reported in the quarter? What I, I would say is, out of 23 molecules which we launched, 7 molecules are new molecules, these are new launches. 15 are the relaunches. Combination for the 2, 2 companies who have got out of this business. There are another 12-13 products which will get launched next quarter. I would say, you know, this is, this is like a relaunch, the business will only grow from now, because these are just launch quantities which went as supply. It's fair to assume that we should build that on the INR 72 million that we've reported in this quarter? Yeah. more launches will be coming, so yes. Understood. So what was the profit share in this INR 72 million, or, you know, the profit share number, the percentage of total sales that you mention usually? Yeah. It is 11% on the standalone basis. If you consider revenue standalone, it is 11%. 11%- Got it. On a standalone basis. Yeah. Okay, got it. My second question is on the ROW business. You know, if I look at that number quarter-on-quarter for the, you know, X and XC business, that's actually come off. You know, we haven't seen any improvement. So I'm just trying to understand, you know, are the supply You know, supply issues that we saw last year, have they not fully been resolved? Are there any tenders that we are not being able to capture? You know, how should we look at that ROW business mix? It's a, I'd say, consolidation. You know, some of the products where it's very low margin, especially the Enox and heparin. Because it's a low-margin business, so it's time to focus on the high margin. Now that the revenue, we have high revenue coming from Cenexi business also, I think it's time for us- Mm. To reach profitability. That's the idea. At the same time, making it more efficient in terms of operations. That's the only reason. Is there more such, let's say, that exists of the low margin that we see on ROW business, or most of it is done and dusted and now we should get back to growth? I think most of it is done because, you know, specific focus on these two molecules where, you know, we're only going after the markets where we're still able to get some... garner some profit on these molecules. Otherwise, we have kind of slowed down on that, but I think it's kind of settled. Understood. Therefore, how should we look at growth for the ROW businesses? I mean, should it be what we were doing historically, the double-digit growth, or it, it would be a more gradual build because we need, still need to develop the Cenexi portfolio, and then grow it? I would say it's you should consider the gradual growth, because I think we have, you know, from priority perspective, Cenexi business has large. A lot more to gain. A lot of efforts. Mm. Are going into that in terms of and how to grow profitability on that business, because the opportunities are plenty there. Understood. My last question on Cenexi. The four-week annual shutdown that, that you mentioned, now, since this is a planned shutdown, is it fair to assume that this won't impact our top line in a very meaningful way because we would have built inventory, you know, to meet the requirements for the quarter? Would that be, you know, a fair assessment on how we should pencil in this shutdown? Yeah. On an annual basis, you know, it's a common thing every year. That's why we made that announcement. On a quarterly basis, you know, if you look at the current and From May and June, we have considered 2, 2 months consolidation. Yes. For the next quarter also, probably it will be that similar range. Okay, understood. Yes. Thank you so much. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Yeah, thank you, and good evening. Just my first question again, just on the U.S. business. It's declined 8% YOY, maybe constant currency, you know, maybe little lesser than that, perhaps. Just want to understand, you know, how should we look up the path forward? If you could also help us understand what is the kind of pricing erosion, especially on injectable products. Is that something that we're hearing commentary about the oral solids actually improving or price stability is a common used word by multiple co-management. What are you seeing? I know it directly doesn't impact you, but just from your experience of what your customers are experiencing on injectables. That's the first question. It kind of price erosion in kind of, it's neutral. If you look at our growth coming from quarter-on-quarter, the growth came from new launches, about 10%-11%, and volume growth, about 4%-5%. From prices, it's almost stable, I think 1%- or something, it's almost stable. I would say, there's not much price erosion happening, at least for the base portfolio, what we have launched. Chadha sir, the 15% is the constant currency growth, is that what you're calling out, QOQ? Yeah, from the INR perspective, right. Your QOQ growth is 23, so I'm... Whatever you have given in rupee millions, so I'm just looking at your press release. I'm, I'm only talking about products. You know, we also have a milestone and profit share coming up separately. From the product perspective, 11, 11% coming from new launches and about 4% coming from volume growth of the products what we launched earlier. What's the, what's this milestone, sir, or is it there in historical quarters? Sorry, if you could explain. Sorry. Yeah, it's always there. It's part of our business because when you make new contracts, you always license products, so that, that income is always there. Yeah, this quarter it is 11% on the standalone basis of the revenue. Got it. Got it. That's helpful. My second part of the question was: How should we look at, you know, growth for your main region, which is U.S., right? Just want to understand, how should we look at the remainder of the year? Anything in terms of whether sequential momentum or year-over-year. We still are ongoing year-over-year, just want to get some directional sense on the remainder of the year. Even if you are sharing something on the full revenue, core business is what I'm asking. quarter-on-quarter, sequentially, you know, it will be a steady growth. For sure, I don't think there will be a decrease in the numbers. If you look at YOY last year, I think we had that quarter where we had substantial Enoxaparin sales in the U.S., and in my last call I said, you know, there is a rationalization of, of inventory. This year, there's substantial decrease in Enoxaparin sales in the U.S., but that's going to pick up from next quarter. That's the major difference. Good thing is other products have started to grow in terms of volumes. It will be a sequential growth. Steady growth, yes. Thank you, sir. My second question: for the 2 months of Cenexi, so I think May and June, what is the growth rate that you're seeing there? Around 10%. Okay, that's about 10% growth, sir? Yeah. Yeah, you need to look at annual basis, so 2 months may not be the right way to look at. We'll see how full year basis it pans out. Because that's been the CDMO of business, you know, 1 month here and there will happen depending on the dispatches and projects completion. On an annual basis, we have to see. All right. Last question. You know, the high gross margin and low EBITDA margin, is that a construct, at least on the EBITDA side, is there a construct that we can improve this? You talked about all the synergies, but are you putting down like a, like a margin target, or absolute cost that can be actually reduced over, like, what, about 3, 5 years, whatever you want to call it? Is there something that you would like to guide us, sir? Yeah. The opportunity is to to make it more efficient and reduction of costs are plenty. One is, of course, as you know, fixed costs are there. Any additional business generation will add to the bottom line. That's one. Second, on the cost side as well, of course, that's been our strength, you know, how to make it more efficient. Currently, the OE at which they're running is low, compared to what we do at our sites. There's a substantial improvement which we can do in the... Of course, added to the, the supply, the sourcing and all that, those are additional benefits. Yeah, there's a lot of opportunity which we can improve at, you know, if you can focus on operational efficiencies at that site. Got it, sir. Thank you, and all the best. Thank you. Before we take the next question, a reminder to participants that you may press star and 1 to join the question queue. Ladies and gentlemen, to ask questions, you may press star and 1. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Sir, just again on this profit share. What should be the sustainable number to look for from a gross margin perspective? If I exclude the profit share element, both quarter-on-quarter, then gross margin is more or less at 46.5%. The profit share would be a factor of the ultimate pricing at the level. We think that this should be the range. If you see historically also, we moved around 8%-10%, 11%, is normally has been the range. That we can, you know, estimate for going forward. So like, sir, considering the contracts in hand, for remaining of FY 2024, can 11% be taken as a profit share element? No. Annual wise, if you see, it is, it was 8% and moved around 8%-10% basis. Understood. This, in the presentation you have highlighted about this repositional product, Cenexi new contract. Any color you would like to give in terms of how big is this opportunity? No, we can't comment on that. It, it just shows the, the technology, what they have, and, you know, that's also another synergy we are looking at. We don't have that capability at Gland, we can, you know, we'll start looking at developing a portfolio to that as well. Too early to comment on that. Okay. Just lastly, on R&D spend, which has been on absolute basis, quarter-on-quarter lower, so what should be a sustainable range rate to look for, both as a percent of sales or on an absolute basis? No, sir, last quarter, January to March, was a little lumpy because of more filing happened in that quarter. Our range is generally 5% of the standalone revenue basis. Okay, sir. Thank you. Thank you. Participants who wish to ask questions, please press star and one. The next question is from the line of Bharat Celly from Equirus Securities. Please go ahead. Yeah, hi. Thanks for the opportunity. Just wanted to get sense on milestone income. What was it last quarter, and how much it is during this quarter, if you could quantify it? Last quarter means Q4 of FY 2023, it was 7%. We are referring to a profit share number. I'm referring to the milestone income, sir. Only milestone income. Correct. Milestone. Correct, sir. Understood. Milestone income in Q4 FY 2023 was 7%, and in Q1 it was 9%. This year, this quarter, both, milestone and profit share are 11%. These are all number on standalone basis I'm talking. Right. Since we have actually collaborated with the newer partner, partners for almost like 15 products, which were getting registered last quarter, so have we received any extra milestone payment related to those 15 products for during this quarter? No, not much, because these are all more generic products, so these are more, profit share kind of, arrangements, what we have. We have done several, technology transfer projects as well, part of this. In the last few quarters, that's, that's also been a focus where, we're trying to do a lot of technology transfer projects from Big Pharma, to, so that the, the margins are better and also getting into a high-margin, product portfolio. Sure. That's helpful. Thanks a lot. Thank you. Ladies and gentlemen, to ask questions, you may press star and one. The next question is from Bino Pathiparampil, from Elara Capital. Please go ahead. Hi, good evening. If I heard rightly, you launched 23 products in the U.S. in 1Q. Seemed to be a bit of bunching up there. What would be your target for the full year? On an ongoing basis for the next couple of years, how many products do you target to launch in the U.S. per year? Normally it's around 24, 25 our own products, and then tech transfer, we do about 10 to 12. Last year, I think we did 39 launches. This year, because of the relaunches, what we're doing, we have done more, but normally it's around 40 molecules. For this year, will it be higher or around 40 itself? No, this will be higher because, of course, you know, if you consider the relaunches, relaunches will be around 2023, 2024, more than normal. Okay. total, we are talking about 60+. Yeah. Okay. Next year onwards, on a regular basis, we can expect around 40. Correct. Okay. Thank you very much. Thank you. A reminder once again to participants, that you may press star and one to join the question queue. Ladies and gentlemen, to ask questions, you may press star and one. The next question is from the line of Alisha Mahawla from Envision Capital. Please go ahead. Hi, sir. Good evening. Thank you for the opportunity. Just wanted some color from you in terms of how is the drug shortage scenario in the U.S. currently, and are there any spaces where there could be an opportunity for us in the near to medium term? You're talking about drug shortages? Yes. Yeah, I know. You might have heard in the news as well. A lot of oncology products are under drug shortage situation. There, there could be some opportunities coming that way, yes. During COVID, we used to highlight that the USFDA would obviously look at this and would contact us, like, ensure that there was sufficient supplies in the market. Just wanted to know if anything like that is already in motion? Yeah, that's, that's happened. We are also monitoring through our partners, you know, which are those products. Like I've been already saying, you know, the, the reaction time is a little longer than earlier because a lot of oncology products, the procurement time is longer from material perspective. The opportunities are there and we are, we are working on those for sure, yes. Cool. My second question is on, Cenexi margins? By when do we expect... So I, I did hear that, you know, there are steps in place that will start, you know, coming in from the next few quarters, but is there an aspiration by when they can come closer to the standalone margins of yesterday? The standalone margin of Gland, you know, probably is, you know, it's a long shot. It will take some time, but at least, the margin improvement you should see from, I think the target internally is in 2 quarters from now, 1-2 quarters. Because the, the base costs are higher compared to here. Probably a year, 2 years down the line, once, once we invest into some more additional capacities or, more efficient lines, and then I think you might see a larger, benefit from it, but in the next 2 quarters you'll see some, improvement in the margins. Can they go up to 20% or high teens? Not in the near term, but maybe, maybe in the future, yes. Okay. Thank you. Thank you. The next question is from the line of Ashish Thakkar from 361 Asset Management. Please go ahead. Yeah, thanks for the opportunity. Sir, anything on biosimilars? Obviously, we also launched a product in China. If you can give us any color as to what, what the number of launches that we are doing in China, and what could China become like 3 years out, what proportion of total revenues it can be, and plus also on the biosimilars part? Yeah, the biosimilar part, like you said, you know, we signed one, the plasma protein contract. That's not really a biosimilar, similar. The rest, I think, it's in a slow move now because of the tight investments coming into that sector. You know, we are interacting with a lot of customers on that, I would say. China, one product is launched last quarter. Still, you know, we're monitoring the market formation, how the revenues will look like. One more product will be launched soon. The second product is close to approval, that will be launched in the subsequent quarter. You would expect the China economics to be more or less similar to the U.S. or to the ROW markets? Current pricing looks better than, better than the U.S. The four products is expected to get launched in next nine to 12 months. This will be through the partnership model, right? The front end at least will be through a partnership model. Correct, correct. Okay, fair enough. Lastly, on this, Pfizer's disruption at their injectable facility, anything which is coming our way? Any discussions with our distributors or our potential partners? If you really look at the, the products, what, you know, what got disrupted, many are not in our portfolio. There are a few actually, which already got moved to Gland's facilities, earlier part of this year. The two products which already moved. There are opportunities there for one or two products, but not many, not substantial. Okay, fair enough. You said, normalization in sales from two of the customers, where we have seen disruption in the recent past. When you say normalization, do you mean that the sales decline has got arrested? Yeah. Because they were completely exited, now we have to rebuild that business. There are few products where the buyer has already taken over the contracts. There are four or five products which are under the GPO contract that got transferred to the buyer. That's, that's getting continued. Once they started selling of the inventory, what they got from the previous company, then, you know, they started placing orders. Those will be back. The rest of the products, you know, we are launching through other customers. They will be, you know, rebuilding their business. Of course, most of these are not exclusive products. They're already been sold by other customers also. These new launches will also help add more volumes. Yes. Fair enough. The last question on, since we are also planning to launch onco injectables, but there are not many companies, including the likes of Torrent, Alembic, and possibly Catalent as well. How do you see that competition panning out in the onco injectables? It seems everyone wants to take deep dive, which is readily available. How would you... Like, at least from the next 1-2 quarters, do you feel that there would be a bunching up of launches and possibly there could be some... As far as the price discipline is concerned, what would be your view? No, we're already there in onco. It's not new launches for us. Most of these products are already approved and there. We've been selling a lot of oncology products historically. It's just that because shortage situation, some products might sell more, like cisplatin, carboplatin, and, you know. Some of these products, the demand is high because of the shortage, but otherwise it's not a new entry for us. Okay. Just lastly, sorry. In your past experiences, in your assessment, how, how long would these shortages last? Typically, what is the cycle? It, it depends. You know, some are longer, but, you know, depending on demand, demand, because especially oncology, the player who went out had, had market share of 50%-55% for most of the products. To replace that, from a single facility will be difficult. So it, it could last a bit longer than anticipated. I mean, we can't really guess how long the, the shortages will happen. Sometimes it go away in 3 months, sometimes it could be 4 years. Perfect. Got that. Thanks and all the best. Thank you. Thank you. The next question is from the line of Harsh Bhatia from Bandhan Mutual Fund. Please go ahead. Yeah. Thank you. Good evening. Am I audible? Yes, go ahead. 3 quick clarifications. In terms of these large products that we are currently catering to, primarily for the U.S. market, in terms of, let's say, vancomycin or heparin, doxycycline. Over the last 2, 3 years, we have seen a couple of Chinese players enter the market. Some might be doing front end and some might be doing contract manufacturing, the CDMO part of it, for the injectables, purely for the U.S. market. Just to get a little bit more flavor in terms of their behavior, and why have they... Or rather, how their behavior is panning out on the last 2, 3 years? Like, anything incremental that you can help us understand. There is aggressive pricing which, which happened, I would say still recent past. I, we see now a bit reasonable in terms of the launches what we have made in the recently. I think people are realizing long-term, it doesn't work, with that kind of an aggressive pricing, especially with the inspections, happening and coming, going after aggressively, the facilities. Maintaining the GMP standards for a longer time and continuously investing into R&D and infrastructure, unless you have enough margins, it's very difficult to sustain. I think, now that the inspections start again, we should see some sanity in terms of the pricing. Sure. In terms of one particular product, ketorolac, if you may, we have seen our partners consistently gain market share. At least that's what the secondary data shows. Is there anything particular that's happening at that front? Is there any player exits that are happening or some incremental opportunity that we are seeing? Because this is something that's panning out over the last few quarters. This is primarily for Fostimon and Angiogen. We have, you know, a big share of that market. All these partners source product from us. Technically, it's a different product and a high-volume product. Companies have approvals but not able to consistently supply. It's an alcohol-based product and also some risk is more difficult to manufacture. I would say it's a technically difficult product to make at the same volumes as, like, other products. That is one of the reasons people are not able to supply. For many quarters, we have, we, we held substantial market share for this product, and in spite of having a lot of approvals, you don't see them selling a lot of quantities of this product. Sure. That's helpful. Lastly, just as a broader thought process, if you're talking about these relaunches over the FY 2024 period, the high number of relaunches, primarily. Just to get the thought process right, the way to think about it is that we are basically... It's basically reconfiguration of our client because of any particular reasons, and the only way to win or grow the top line through relaunches is us to get back into the market and gain the market share. That's the broader thought process, right? I'm just trying to understand how are we looking at these incremental opportunities or rather, the base opportunity, in terms of our ability to relaunch and then garner back the market share that we've already lost. There are a few things, right? I mean, the, the companies who exited this business got out of injectables, so we had several products with them. When they exited there, they held some GPO contracts which are tied up to, to our products. When, I think, Seagen acquired this business, they acquired this business, they acquired these contracts as well. They'll start taking products from us. These products are the relaunch, but basically, the GPO contracts will continue. What we lost for a quarter, two quarters, we'll restart again, and that's what happened this quarter. Now, the other set of products where Because of competition, there was a pricing issue, so people couldn't sell or partners could not sell. These are relaunches happening, based on our own, internal life cycle management, what we have done with products, reduction of cost, change of APIs, sourcing, increase of batch sizes. We could have come out with a competitive pricing. We re-re-relaunched it so that we can have a, a better edge in terms of competing with the, others. There are two, two ways to look at it. Sure. That's helpful. Thank you. Thank you. Thank you. you. The next question is from the line of Nithya Balasubramanian from Bernstein. Please go ahead. Thank you. Sadu, can you give us an update on the complex injectable filings as well as your pipeline? Yeah. We have filed 7 complex products. Then we have another 12. We're going to file 4 more this year, so that will be 11. We have another 8. I think total is 19. Another 8 in the next 12-14 months. That's the pipeline we have. With Cenexi coming on board with the liposomal technology, we want to add more products now with the portfolio. Yes. Cenexi, are these most. Can you just talk a little bit about the technology? Are these all suspensions, microspheres? If you can just give us a little bit of color. Yeah. Also, when are you expecting some of the approvals, the first set of approvals to come through? You know, there are 4 complex peptides, one emulsion. There are 7 hormonal, suspension products. There are 2 microsphere, 1 nanosuspension, and 4 normal suspensions, so they're 19 split. 1 complex peptide we just launched last quarter. It's not a huge product, but limited competition. The rest, we are waiting for approvals. Any large opportunity that you're expecting in FY 2024? 2024, Either it's the last quarter of FY 2024 or the first quarter of 2025, you know, based on the go date what we got this. Got it. Thank you so much. Yeah. The second one, second question I had was on enoxaparin. You had mentioned at some point that you would expect the run rate to go up because Kabi is, you know, transferring all the volumes to Gland. Is that still the expectation in FY 2024? Will we see that in this year? Yes. Our agreement is active. It's just that they are rationalizing the inventory. The earlier run rate, what they thought was INR 24 million, now it's around INR 15 million, and the inventory for the built-up is getting reduced. That's the reason why we couldn't sell, ship this quarter. You see that moving from next quarter. Yes, I think their expectations sell out 15 million syringes a year. Understood. Thank you. If I may squeeze in another one. On Cenexi, I think the gross margins obviously look very attractive. If you can just help give us some color as to. Why that is the case? Because I look at any other European CDMO I'm tracking, nobody's even in the range. Lonza none of them are even close to the gross margins of the Cenexi. What explains the these high, high gross margins, and do you think they're sustainable? I think most, several products, what they have are unique in nature. It is only the brand selling this or the company which bought the brand. One product, actually, U.S. is exclusive. I also talked about a pre-filled syringe oncology product. Again, it's a, a single, single product. They have several of that nature where there not, not many CDMOs are doing it. That's, that's the reason we said, you know, we actually identified several products where we dropped it. Now that they have these technologies, we want to enter. I think I would say that's one of the reasons why they have the high margins, yes. Got it. Thank you so much. Thank you. Thank you. The next question is from the line of Anubhav Sahu from Moneycontrol Research. Please go ahead. Hello. A couple of questions. One on this new product, heparin and enoxaparin. If you could talk a little more on the, you know, near to medium term strategy on these two product lines. It looks like a case that we are gradually exiting from this space. If you have, would you have any internal target, you're keeping, maybe in terms of sales volume or, you know, percentage of sales to whole? If you could elaborate more on the strategy part. No, these, you know, as a company, it's, these two are important products for us, you know, we're never going to exit that. It's just that limiting certain markets where the margins are too low, and trying to focus on operational efficiencies for, you know... See, ultimately, the ROI is there, right? We can't invest our lines on products when there's not margin. It's not that this is going to stay forever. For example, heparin, based on the work what we have done in approving several approved suppliers and additional heparin suppliers through our network in China, we could reduce some costs, and now, you know, you will see some volumes moving in the U.S. also. We're trying to become more competitive. It's a question of how much backward integration you can go in these molecules. It's just like slowing down in some markets till you get those market shares. Still we feel we are far better off in terms of competition, other than one or two Chinese players who are 100% backward integrated. We have an edge in than many others as well. It's not that we're exiting, it's just that we're trying to be more selective in selling now while we work on the improving the costs. That's the whole idea. Understood. Understood. If I get it right, these two product factors something around 20%-25% of sales for the U.S. market, could you give an idea how much of this sales, I mean, sales as for these two products are coming, are coming from U.S. market? While last year it was, you know, 25%-27%, this year already it's, it's reduced. In fact, that's a good sign because the dependence on that has come down. We have launched several other products which have taken load of these molecules, which are better, more profitable. While we are working on improving costs for, you know, products like heparin and trying to see how we can do a pricing to, to, to get some contracts in the U.S. That, that's the plan. Okay. Okay. Like, out of this INR 1,000 crore or, or now probably it has reduced, how much of the percent of sales coming from these two products is from U.S.? It's a good, some kind of estimate, because probably U.S. is one market where probably we are slowing down these two products. We can come back to you with the exact number for the last quarter, what percentage are from these two products. Sumanta, you know, can send a message to Sumanta, can address your query. Okay. Okay, that's great. Secondly, just a clarity on this Q- on- Q number for U.S. You mentioned, you know, out of 25% growth, we have seen, 11% is from the new launches, 4% from the volumes from the existing products, right? So that, takes it around 10%, takes it because of the milestone payment. Hello, did I get it right? Hello? Give me a second. If you see, overall, it's 11%, but the U.S., the, new launches and quantity is almost 20% growth. Oh, sorry, sorry. Hi, yeah, please. You can come again? Overall, as a company, 11% came from new launches, but if you see just the U.S., between new launches and quantities, about 20%. 20%. Okay. Okay. Okay, the rest of it is the milestone, around 4%-5%? Yeah, correct. Correct. Okay, understood. Thank you so much. Okay. Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Services. Please go ahead. Yeah, thanks for the follow. In the previous remarks, you highlighted that the pricing for, in China is better than U.S. Even after considering it being a tender, nature of the business being tender, still you think the pricing is much better than U.S.? The portfolio, what you have selected, has this nature. You know, we're not going after every product, where it get into that, tender, but we are selecting products which are not part of that. That's where the margins are. This you're referring to the gross margin? Correct. secondly, just the profitability for these new customers which you have added, as, as we lost certain customers or certain customers going bankrupt. So, effectively, whatever new customers you added, the profitability is more or less similar or they are now at a lower margins? although the contracts, contractually, we have a higher profit share because the milestone income is avoided for most of the products, but because of the pricing, probably it could end up at the same level. Okay. All right. Thank you. Thank you. you. Thank you. Thank you. The next question is from the line of Sunil Khatri, who's an individual advisor. Please go ahead. Yeah. Good evening, sir. Good evening. Yeah, my question is a very small question, that revenue from India is very a small portion of total turnover of our company. Is there any special efforts are you going to put for the increase the revenue from India operations? See, our portfolio, if you look, you know, mostly it's hospital injectable products, mostly these are under NLEM, right, so under price control. That's the reason why we've been facing the issue of sales, because highly GMP compliant is today, the costs are always high. It's very difficult to compete in this tender market. We are, we are evaluating. We have too many things on hand now, but we are also looking at branded business, if we can get into that kind of a, that kind of an area. That, that's more on our strategic discussions, what we're having, but not in the near term, no. Okay. One more further small question. The Cenexi revenue for 2 months is only there. It is around $3 million-$14 million. You can assume that $20,000 million will be there annually? Yeah, last year, the revenue is around INR 190? 190. Around one nine- one eighty. One ninety, sorry, 190 million EUR was the sales last year. You can assume, you know, it will be in that range. Yes. Okay, sir. Thank you so much. Thank you and congratulations for providing better results compared to QoQ. Thank you. Thank you. Thank you very much. That was the last question. I would now like to hand the conference back to the management team for closing comments. Thank you. Thank you for joining us today on our first quarter earnings call. We appreciate your participation. If you have any further queries or clarifications, please feel free to get in touch with us. Thank you. Good night. Thank you very much. On behalf of Gland Pharma Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.