Good day, ladies and gentlemen, and welcome to the Q1 FY 2023 earnings conference call of Indoco Remedies hosted by JM Financial Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that the conference is being recorded. I now hand the conference over to Ms. Cyndrella Carvalho from JM Financial. Thank you, and over to you, ma'am. Thanks, Michelle. Good afternoon, everyone. I, Cyndrella Carvalho, on behalf of JM Financial, welcome you all on the quarter 1 FY 2023 earnings conference call of Indoco Remedies. At the outset, I thank the management of Indoco Remedies for giving us this opportunity to host the call, and I congratulate the management on delivering sustainable number trends. Today from the management team we have with us, Ms. Aditi Panandikar, Managing Director, Mr. Sundeep Bambolkar, Joint Managing Director, Mr. Pramod Ghorpade, Chief Financial Officer, Mr. Vilas Nagare, Corporate Affairs and M&A. I now hand over the call to the management for their opening remarks. Over to you, Ms. Aditi. Thank you, Cyndrella, and thank you everyone for joining us this afternoon. Let me start with a couple of positives we have happening at Indoco right now. I'm very happy to share that last week we have gone live with SAP S/4HANA, all modules at Indoco. I'm very confident that SAP implemented at Indoco is going to result into higher levels of efficiency as well as help us in all our strategic pursuits. Secondly, as mentioned in the last call, in a few weeks from today, specifically on twenty-third of August 2022, Indoco will complete 75 years since it was registered. It's a matter of great pride for all of us at Indoco and Indocoites across all locations, all functions are engaged into various activities as well as improving sales to ensure that this is indeed a great platinum jubilee year for the company. Let me now come to performance of this quarter. As you all will recall, the organization had performed very well in the last financial year, partly because of certain tailwinds of COVID products as well as excellent growth in international business. I'm happy to share that while for India business, the tailwind of respiratory and anti-infective basket of products is not there, we have still managed to give a steady performance in business. In fact, without impact of those products, India business would have grown by over 14%. Also happy to share that international business has done a great growth for the company. We closed the first quarter of financial year 2022-23 with a consolidated sale of INR 395 crores, of which domestic contributed to INR 200 crores. International business contributed to INR 177.3 crore, which is 45% of the top line. In domestic markets, respiratory and anti-infective, as I mentioned earlier, had tailwinds of COVID last year and therefore they dented our performance. We are confident though that both these segments will recover and start performing well in the coming quarters. On the international front, the US business has grown by 40.7%. Sales in the Europe region are flat in view of some of the challenges we have servicing orders to Europe. As we take the business to other locations so that there is higher capacity to service contract manufacturing, this should get corrected. Going forward, we anticipate an easing down in the stress that has been put on the COGS or cost of goods and a normalization of other increases in freights, et cetera, which have put a constraint on our EBITDA earnings. I'm confident as the half year concludes and for the year forward, we shall show an improvement in our EBITDA margin, which took a hit this quarter. For the first quarter we have recorded an EBITDA of INR 71.3 crores, which is at 18% of income, and a profit after tax of INR 38.5 crores, which is 9.7% of sales. That is all from me. I will now hand over to Mr. Sundeep to take you through financial highlights. Thank you. Thank you, Aditi. Once again, good afternoon all the participants. Hope you and your family members are all safe and healthy. Let me first begin with the business highlights. Net revenues of the company grew by 3.6% at INR 394.9 crores. EBITDA to net sales for the quarter is at 18.1%. PAT to net sales for the quarter is at 9.7% at INR 38.5 crores, and earnings per share for the quarter is INR 4.17. Now, on the Indian pharma industry, IPM valued at INR 45,078 crore, has registered a growth of 2.1% during the first quarter. This IPM growth of 2.1% comprises of volume growth at -1.8%, price growth at 5.1%, along with new product growth -1.2%. IPM value trend line indicates a gradual normalization of the sales trend. Anti-infectives, vitamins, minerals and nutrients and respiratory are degrowing when compared to the slow-growing IPM. Derma and gynecology therapies growing at 24.1% and 25.3% respectively, are driving the growth of the IPM. Indoco ranks 27th on cumulative business. That is July 2021 to June 2022, with market share of 0.67% and reflects growth of 13.5%. Considering first quarter performance, Indoco ranks 29th with market share of 0.62% and reflects a growth of -3.4% during the first quarter. Domestic formulation business. Revenues from domestic formulation business for the quarter degrew by 7% at INR 200 crores as against INR 215.1 crores. Major therapeutic segments like dermatology, ophthalmology and gastrointestinal performed well during the quarter. Now onto the international formulation front. Revenues from international business registered a growth of 16.3% at INR 177.3 crore as against INR 152.4 crore. Revenues from regulated business for the quarter grew by 15.1% at INR 147.7 crore against INR 128.3 crore. Revenues from U.S. business for the quarter grew by 40.7% at INR 64.9 crore against INR 46.2 crore. Revenues from Europe for the quarter were at INR 77.7 crore against INR 79.2 crore. South Africa, Australia, New Zealand was at INR 5 crore against INR 2.9 crore, and emerging markets showed a growth of 22.7% at INR 29.6 crore against INR 24.1 crore. The API business of the company grew by 22% at INR 13.3 crore against INR 10.9 crore. Revenue from CRO and analytical services for the quarter was at INR 4.2 crore against INR 2.8 crore. This is all about the business highlights for the quarter, and I now request the participants for their questions. Thank you very much. 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 phone. 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 will wait for a moment while the question queue assembles. The first question is from the line of Aditya Khemka from InCred Asset Management. Please go ahead. Yeah. Hi. Thanks for the opportunity. Sundeep, sir, could you quantify the profit share that we received in 4Q in our export formulations? What is that number in 1Q FY23, please? Aditya, it's between INR 6.5 crores and INR 7 crores. This is for 1Q FY 2023, Vilas sir? Yes. Yes. What was the same number in 4Q? Fourth quarter last year, I think it was around seven. We are roughly doing the same numbers, Aditya. Yeah. The question here, Aditi ma'am, is that last year same, I mean, last quarter we obviously had some supply challenges in Brinzolamide, the second half of last year. My understanding was after our con call last year, last quarter was that the issues were now behind us and we were supplying. Why isn't the profit share number moving up? Yeah. As we had explained earlier, but let me do that again. When we supply Brinzolamide, we supply it to Teva, which is booked as our sales. The profit share comes to us after Teva further sells it in the market, closes their quarter and a quarter after that. It's a long kind of a gestation period. While we have supplied Brinzolamide to Teva in the last quarter, we are now in the process of regaining market share, which expense is going to be accrued in that when we will do it, and you will see impact of that in the future quarters. Understood. Could I also get a sense of the launch of Combigan, in the U.S. market? Yes, Aditya. We have finished answering the CRL, and all documents have been logged in with the FDA. We were given to understand earlier that by September first week we will get approval, but that has gone ahead by almost a month and 10 days. It should be around fifteenth of October that we will get the approval. The goods have already been shipped and they are with the partner's warehouse. All right. Basically the launch now will be in somewhere mid-October. Is that your TAD, target action date now with the FDA? Exactly, yeah. I'm worried about the sequential decline that we have seen in the regulated market revenues. I'm wondering, you know, Europe obviously our commentary has been very exciting there, you know, with Baddi getting commercialized. There also we are seeing no sequential uptake. When I say sequential, I'm comparing the fourth quarter of last year to the first quarter of this year. Same with the U.S., you know, despite at least supplying brinzolamide, even if no profit share, the number seems to be really weak compared to the fourth quarter of last year. What is driving that, sir? No, actually, there have been certain factors. If you recall, during the commentary of our first, sorry, Q4 of last year, we had clearly said that we need time till September for things to settle down and then, you know, show a real good growth. Because we have been passing through turbulent times for availability of material, for COGS, for so many other factors, availability of containers, availability of key starting materials, APIs. I think in spite of all that, the performance has been quite commendable, number one. Number two, coming to Europe's flat trajectory. There are a number of European products which are being site transferred to Baddi because we want to make Goa free for U.S. business. Now when you go to the authorities, they say that the site needs inspection, or here MHRA would be honored by mainland Europe and mainland Europe authorities inspection would be honored by MHRA. Now that's not the case since Brexit has happened. However, for one of our very large suppliers, the inspection is slated to be either end of October or beginning of November. We are on a very sound wicket as far as Europe is concerned. Coming to U.S., we have projected a figure of INR 300 crore+ for U.S. This is a short term blip you're seeing, and I'm 100% sure that we will be meeting our year-end target. Because of dosage form mix, sometimes things go up and down, but that will get carried from the second quarter onwards. Got it, Sundeep sir. Makes sense. Sorry, Aditi ma'am, on the gross margins, essentially, have we taken the NLEM product portfolio price increases in April? On the non-NLEM portfolio, have we started the process of taking price increase wherever due? Yeah. Yeah. Yeah, Aditi, I'll just add to that. You know that inflation in India was pretty low, 3.75%-4%. That's for the scheduled category products. So long we were getting hardly any price rise for that. Now the government has sanctioned, but we cannot suddenly jump into it. That's point number one. Second, non-NLEM products, we are allowed price rise, but however, we have to watch the competition also side by side. So these things are being watched and after a pricing period of 12 months we will be doing that. You may not suddenly see an impact quarter on a YOY basis. This is what I'm saying. No. That I understand for the non-NLEM because there needs to be a 12-month gap between the last price modification and the current price modification. I understand it happens over the year. For the non-NLEM portfolio, you know, AG as a company that which you have spoken to seems to be suggesting they've taken the entire 10-11% increase that is allowed. I'm just wondering why. Because our raw materials, our gross margins are down like 400 basis points, right? That there clearly is a cost pressure that needs to be passed on at least if we are keen on maintaining margins. I just couldn't understand the argument as and because going on. NLEM portfolio is only 11%. You know that. Yeah, I do. I'm worried about the 11%. Have we taken the price increase? Our product basket is acute, chronic. It's not as easy to just increase prices. We'll do it in a staggered manner. Okay. Understood. Lastly, on the growth for the India business, so obviously, you know, in the last call you mentioned there were about INR 40 crore-INR 50 crore of one-off sales in the last year driven by COVID-related sales of ATM and Febrex. I'm just wondering and this quarter you're saying 14% growth, excluding COVID-related products. I'm just wondering. Mm-hmm. For the full year, excluding COVID, will we do mid-teen, high-teen growth for the full year? Yes, yes, we'll be able to do it. That would have price increase element of 4%-5% or lesser or more? About 5%. Aditya, let me just take this opportunity to share some more details. Sure. As I said, if we just take the impact of Karvol Plus and ATM out, the organization would have grown like close to 14%. Driving this growth are fundamentally strong brands. Cyclopam is growing at 44%, Febrex Plus at 28%. The entire ophthalm portfolio is growing at 50%. Dental prescription-driven business is growing at 25%. There are some very good triggers which give me great confidence that these kind of blips, ups and downs that will be created because of base effect of last year. India business this year will do very well on a qualitative as well as quantitative basis. That makes a lot of sense, Sundeep. Thank you. Just before I get back into this, just one more question on the EBITDA margin. Do we stick with our EBITDA margin commentary on improving margins also last year? Because this quarter we have seen decline in EBITDA margin. Mm-hmm. Yeah. I think we have said very clearly that for the first half this year, it will take us at least half a year to stabilize, and after that you will see growth. Got it then. Thank you, and all the best. Thank you. Anyone who wishes to ask a question may press star and one now. The next question is from the line of Jainil Shah from JM Financial. Please go ahead. Yeah. Hi, thank you for the opportunity. You know, my first question is on the domestic business. You know, how many products have we launched in the last two-three quarters? You know, how are they performing? You know, any particular therapy area that you know, we will be focusing on, and you want to call that out? This quarter we did not have any new launches. Last year, specifically in the second half of last year, which is Q3 and Q4, we did have new product launches. The products we have launched are Noxa, which is ozenoxacin cream in the derma segment, but we are taking it to the general practitioner. Dropizin syrup, which is peripherally acting cough suppressant, so without sedation. We have also launched Subitral and Subitral DS, which is itraconazole with a micronized novel dosage form. I'm happy to share that in the first quarter this year, we have totally clocked around INR 3.6 crore sales from the new launches of last year, which is 1.8% of our top line, way above 0.9%, kind of levels that we used to do earlier. That's great. The therapy area that you are wanting to focus on? Yeah. We are still consolidating in the chronic space. Most of our launches are going to be in acute and subchronic respiratory, which is a very, very interesting space, and where we have a very big stake, as well as GI, where we have big stakes. Yeah. Yeah. That's helpful. My second question is on the, you know, U.S. business. You know, how should we look at this business, you know, going forward? You know, how many ANDA filings are you planning and launches that we can expect maybe in FY 2023 and FY 2024? We file at least four ANDAs every year, four-five. This business will grow. Definitely, it's on a very big growth path. We have certain strategic things to be implemented in the next two-three years. We made also a five-year plan. We are mainly into now the new pipeline is into complex injectables, into suspension ophthalmic, and into sustained-release solids. This is the idea going forward. You'll see a very good growth in U.S. business. What kind of size are we looking at, maybe say three years down the line, four years down the line in terms of? Current size, this year we would be around INR 305-INR 310 crore. The business will easily grow at 33%-35% per year. Okay, that's great. Yeah, that's all from my side. Thank you. Thank you. Reminder to all the participants to press star and one to ask a question. The next question is from the line of Dhara Patwa from SMIFS Limited. Please go ahead. Yeah, hi. Thanks for the opportunity. Ma'am, I just wanted to ask whether we have launched lacosamide in the U.S. market? Yes, we have launched both lacosamide tablets as well as lacosamide injections in the U.S. market. In fact, Indoco was the first company to launch lacosamide injections. For some months, no other company got approval, at least for two to three months. Now two other companies have got approval, but we are not sure whether they have launched. How much market share do we have in U.S. market for this opportunity currently? The U.S. market was $43 million when it was before it went generic. Subsequently it climbed to $49 million. As regards the market share, it's a bit too early. Maybe we are finishing three months in this at the end of August after launching. What I mean is to be patient. Maybe, you know, next meeting we'll be able to give you concrete numbers. Okay. Yeah, this is helpful. The second one, question was on the employee cost. This quarter it was 20.8% as compared to your historical levels around now 18%-19%. Is this the new base or there was some one-off in the employee cost in this quarter? This quarter increase in employee cost is a function of increments that have been given. To a certain extent, you can expect this number to be constant. However, as the sales grow, as percentage to sales, we should correct it. 19.5% should be assumed for the subsequent quarters since the increment won't be there in the subsequent quarters, right? Yeah. It's the same numbers that we have given for this quarter. Oh, okay. Yeah, sure. Thank you. That's it. Thank you. Before we take the next question, a reminder to all the participants to press star and one. The next question is from the line of Kunal Mehta from Vallum Capital Advisors. Please go ahead. Thank you very much for the opportunity. Personally, I would just like a clarification on the European side. I think you were always very optimistic on the growth of this business. Could you tell us, I mean, for this year, what are the targets you have set for the European business? Barring this, you know, this process of shifting the products to other sites, I mean, what do you see the general environment in Europe for our products? Yeah, yeah. The environment is fine. There was, as I explained earlier, one very important product, which is a huge supply. We want to site transfer it to Baddi, where we have huge capacities and big batch sizes. That is happening by November. Got it, sir. We will not hold that back. That apart, there is growth in every other product. Because we have this particular product seems so big, that's why you are seeing a flat number. From second quarter onwards, things should improve. Definitely. Understood, sir. Also in the last quarter, I think we had announced certain, you know, capacity expansion initiatives. I think there was one initiative which was announced in one line for high potency products meant for Europe. Also there was expansion of lines in injectables, I mean, sterile products, as well as suspension products. Can you just give us a status on these initiatives right now? Are they now, you know, being commissioned? You know, what sort of output do we have in terms of revenue from these CapEx activities? Yeah, perfect. I think, you got it right. The high potency department is just about to start functioning. We are about to start trial batches next week, and thereafter will be the scale-up and validation batches. That's online. The new line number five, is coming in into the plant by end of September. That is also on track. It will take two months after that to get qualified and validated, which means by first week of December we will start the trial batches on that line. We are planning one more line after that, after line five settles down. This is our CapEx program. Can you give us more understanding on this high potency business that you're trying to cater to? It is from what sources it is coming and, you know, what is the nature of this contract and, you know, other details, if possible, something. There are no contracts as such. These are products which are, you know, 0.25 milligram, 0.5 milligram per tablet, but very high potency. The regulators are not comfortable that the company manufactures such products in general manufacturing area because of cleaning validation issues. That's the reason we thought of this. I can just add here that, because these products cannot be made in multi-product facilities, there are very few sites which can make these products, and that is why it is a good business to look at. This is a business in addition to what you are doing right now. It's not as if, you know, you are getting a manufacturer from some other- Yeah. It's in addition. Sure. Additional. Yeah. Just one last question. When you say that you have a target of INR 300 crores for the year because this year, this amount is only, you know, it is excluding any profit share which would, I mean, you, I'm sure you are factoring in the regular royalty income, but any, you know, except any, I would say large quantum of profit share is something excluded from this or it's a part of this? No, no. This is a normal total business, including everything. Okay. You are also including, I mean, let's say Brinzolamide profit share starts coming from, let's say. Okay. Okay, sir. Sure. Thank you very much. Thank you. Anyone who wishes to ask a question may press star one now. The next question is from the line of Rashmi Sancheti from Dolat Capital. Please go ahead. Yeah, thanks for the opportunity. On Europe business, basically just need a clarity that the growth was flattish because of the shipping delays and you were facing some issues in getting the repeat orders? No, not repeat orders, Rashmi. It is, as Mr. Sundeep explained, there are certain orders from some geographies for which if you have to transfer site to another location so that capacity is freed, we have to wait for the regulator's approval, which is why things have gone a little slow. Basically, what you are doing is like from Goa Plant one, you are planning to transfer that to the Baddi 3 unit. Is it correct? Yeah. Goa one, you want to dedicate it completely for the U.S. business. Correct. Goa plant one, we don't have USFDA clearance, right? We have USFDA clearance. We have a warning letter hanging, but the clearance is very much there, and current supplies are going on. Okay. On warning letter, what is the current update? Have you heard anything from the USFDA related to the inspection or anything? No, nothing. Nothing yet. Okay. Ma'am, what is the reason for transferring, you know, the site transfer from Goa to Baddi? Basically everything to come under one roof. That is what you are aiming to? No, the idea is to segregate by geography because, you know, when the regulators come down, when the product mix, it is not possible to mix up or, you know, have too many products at one site. The idea is that Goa one, two, three will be dedicated for US and Baddi will be entirely doing Europe. Understood. How much time it will take for this, approval on the Baddi plant and when do we expect the smooth supplies from Baddi to Europe? Another quarter. Okay. We should expect normalization of European sales from the second quarter onwards. Third quarter onwards. By second quarter, approval will be coming. Okay. Do you maintain your guidance on Europe of around 20%, which you gave last time? Yes, we maintain. Okay. Ma'am, on U.S. business, what are the kind of launches or how many launches have you done in this quarter? Launches, 2. 2 launches we have planned in the current quarter. How many filings we have done in this quarter? In this quarter we have not. In the whole year we plan to file four or five. Okay. On U.S., basically we had installed a new line, new sterile plant, and that was about to get operational in June month. What is the current status on that? Whether, you know, is it operational, whether we have started supplying from that particular plant? No, no. That was a replacement line. The trial batches have started just now. Okay. The new line, absolutely new line number five will come inside the plant at the end of September, and that will get qualified by end of November, and the trial batches on that new line will start in December. Correct. As you mentioned. This replacement line which you mentioned, this is also in Goa 2 or in, Goa 3? Goa 2. Sterile plant. Okay. The new line which you're talking about is also in Goa 2, right? Yes, yes. Okay. What kind of filings or how many filings, basically you are planning to do from this particular plant, or is it that, you know, we can expect the numbers only from FY 2024 onwards? See, filing is a continuous process. As I said, you know, it will take five filings per year. We don't want to give you details at this stage whether it is oral, injectable or solids. It is considering the total business that we are talking about. Okay. Aditi, last time, I mean, last quarter, you all mentioned that, you know, in India business you will be taking or we have taken 6% price increase across the base portfolio, which includes 4%-5% on non-NLEM and 10.70% on NLEM portfolio. Is it that, you know, it has not taken yet and you were just saying that, you know, you're planning to take it and now because of the competition you will take it in a phased manner? Correct. That's correct. Correct. Okay. Even on non-NLEM you won't be taking it. That also you will be evaluating the competition and then take it. I think that we will take, but I just want to. Okay. Got it. Yeah. Okay. In first quarter and second quarter, as of now on NLEM portfolio, you have not taken any kind of price increase on any part of the portfolio. Yes. Yeah. Correct. Still you maintain that domestic business would show a growth on a high base of FY 2022 in a mid-teens%. Yes, we maintain. Okay. On gross margins and on EBITDA margin side, when you say that, you know, we would see an improvement from the second quarter, can we expect that from the current levels, the gross margin should at least improve by 100 basis points, in FY, for the full year? Yeah, of course. Definitely. Okay. You maintain that your EBITDA margin within the range of 19%-20% for FY 2023? Yeah, we've said that earlier also. Okay. As of now, we are not seeing any risk, the cost or the freight cost or the raw material cost going up. We are basically seeing softening month-on-month, or we are still seeing some challenges on that. In fact, we are seeing things softening down in the last, you know, three-four weeks. Okay. That's it, sir. Thank you so much, and that's it from my side. Thank you. Thank you. The next question is from the line of Kunal Mehta from Vallum Capital Advisors. Please go ahead. Thank you. Sorry, apologies again. Ma'am, I just wanted to understand what is the reason behind, you know, delaying this or probably deferring this price rise in India. Because when we study the Alkem data, I mean, even the data of our, you know, underlying molecules and salts, I mean, a lot of the players actually have taken market share, and even across a few players, there has been good price increases of at least, you know, high single digit, of course not entire 10%, but at least good high single digit. I mean, could you please help me understand what is the reasoning behind, you know, deferring this price increase in a non-Indian portfolio? If you speak of Alkem in particular, see, you have to understand one thing. We have several products which feature in the top five in their own therapy segment. Possibly when it comes to anti-infectives, where Alkem is a very large player, they probably have a brand in a position where they can take that price rise and be comfortable with it. I'm not saying we are not going to do it. We just have taken it all in the first quarter. Sure. Since now we are in, you know, August, 10 days, nine days have passed, and we only seen July, so could you give an outlook of how the season, Q3 season and give that a season for the next, this quarter and the next is likely to shape up? Any early indications that you read from the data which you have on hand? We've already closed July, but I'm sorry I'm not free to discuss that. It's very clear that, at least when you look at the rains, every time it rains in Indoco there's a celebration because obviously with respiratory and anti-infectives both contributing close to 40% of the top line, it's very clear that sales will pick up for both these products. We are also seeing other segments, as I said earlier, which are not necessarily linked to season are doing exceedingly well. If you look at our prescription growth and our climbing of ranks on the prescription basis, there is great positive and possibly some data which is already in public domain I can share with you. For the month of July, we have jumped one rank in IPM and are now twenty-sixth. We overtaken Ajanta both in growth as well as units sold as well as price, et cetera. And so- Things are looking good for India. Yeah. Sure. For the month of July, YOY, have you seen prescription growth? Yes. YOY, MAT, YTD, across all doctor specialties, across all products. Even where. See, primary fluctuation you will see this year because there was a lot of over-the-counter last year in some areas. Prescriptions are very much there. Even for ATM and Karvol Plus, our prescription levels are better than many other competitors. Sure, ma'am. Sure. Thank you very much for the data points. Thank you. Thank you. The next question is from the line of Aditya Khemka from InCred Asset Management. Please go ahead. Yeah. Uh, uh, picture with you on the, uh, softening of- Mr. Khemka, we are not able to hear you. Um. Sir, your voice is breaking. Am I audible now? We are hearing you in phases. I mean, it's not very clear, Aditya. Okay, I really don't know what the problem is, but I'll try to put my question and let's see. Now we are okay. Yes. Now we are okay. Okay, great. My question was on the softening of prices. We have heard similar commentary from other pharma companies as well, where, you know, the prices have sort of come off from the peak, even it's not normalized to pre-COVID levels. I just wanted to understand how much inventory of raw material do we generally carry? I'm sure it, because of driven by COVID, we would have carried higher than normal inventory. You know, how much time would it take for us to go from high priced in inventory consumption to lower priced inventory consumption? We generally carry, because of COVID, you know, we had to build up inventory. We generally these days carry two months inventory. Two months inventory. Yeah. That's including raw material and packing material, Sundeep sir? Yes, yes. Okay. Secondly, on the IMS data, I think you guys present secondary audit data on your presentation. The source is IMS or is it AIOCD? AWACS, secondary data, or prescription. Which one did you want to know? The brand data for the Indian business you put on the presentation deck, right? That's AWACS. Generally the primary, secondary, whatever we call it, which you get from the agency that is AWACS. I'm sure they have written it. If not, we will add it. The prescription data, if anywhere quoted, would be IQVIA. All right. Understood. What I noticed in that data was that some of your new launches are also doing phenomenally well. As you said, you know, ophthalmics and some of the newer products. Could you talk about, you know, the chronic portfolio built out? Ma'am, internally, do you evaluate your performance? The India business performance in the acute subchronic chronic bucket, or do you make two buckets, acute and subchronic together, chronic separately? What is sort of your MR productivity in individual buckets and what is the upside in that MR productivity is what I wanted to understand. Yeah. I will not be able to give you right now, MR productivity by product baskets or buckets, because these products, although we call them acute, subchronic and chronic, they are actually spread across all our divisions. Except for Synergy, which is the division formed from CND and Focus, which is a pure chronic division. Almost all other divisions carry all three baskets. Let me give you some more details of how these categories have performed for us. In the first quarter this year, acute actually de-grew by 24% because of respiratory and anti-infectives, as we have discussed. The subchronic basket has grown by 17% and chronic by 5%. On immediate preceding quarter basis, acute is flat. Subchronic has grown by more than 19% and chronic by 10%. This is how they fare. Average PCPM based on people on payroll is around 3.7. Perfect. Ma'am, I know it's very difficult to break into chronic given the intense competition and the intense marketing power of the incumbents. On a very small base, the 5% growth in chronic seems, you know, lower than what the market will be seeing. So is there something? I'm sorry. You want to complete your question? Yeah. The The question was, does something need to change as far as strategy or. Yeah. What we have done, Aditya, is if you remember, we had two divisions in chronic. One was CND, which was focused on the cardiologist, and the second was Focus, which was on endocrine and consultant division. Since we were not able to make too much headway with two divisions, we consciously decided last year in the last quarter that we would create a new division, Synergy, from these two divisions. What we have done now is that we've established a good specialty brand matrix in Synergy. There are products like Aloja, which is our alogliptin, and Telmichek, which is a telmisartan, which are the growth drivers. Other products like Glychek, which is gliclazide, Price Check, which is glimepiride, and Cal-Aid, we are consolidating. We have done away with the tail, you know. I mean, there was really no point, as you said, you also said, being fortieth in a particular category and things like that. From around 290 people in both these divisions, we are now at around 170 with one division and consolidating. I feel this will be qualitatively a much better business and we'll be able to, you know, develop good brands. I've got it. You rationalized a few products at MR. Your portfolio just shrunk and then you have grown on to brand new molecules. Your voice is really cracking. Can you repeat that? It's okay, ma'am. It's okay. I'm saying that you have rationalized a few products and a few MRs, so your base would have shrunk on the chronic side. Right. Yes. Yes. Yeah. Yes. Yes. Yes. Yes. You have grown on that base. That's how we should read it, right? Yes, yes. Absolutely. Yeah. Got it. Last question, ma'am, on the India business again. When you look at the environment where you have online pharmacies, you have Amazon entering into, let's say, the region, other markets, not in our market yet, hopefully. You have, you know, some of these generic announcements being made, margin caps being made. At Indoco, what are the vulnerabilities that you have to any of these or all of these sort of changes happening in the broader market? Yeah. Aditya, possibly what is not a very great strength at Indoco becomes a huge strength when it comes to dealing with all these supply chain kind of disruptions that are happening. That is if you have legacy products with good prescription support and a very good demand attached to them, there is very little that happens by way of discount expectation because the demand is there. Okay? So we feel pretty comfortable because, as of now, at least the e-pharmacies and all the others have been picking up products from our own stockists. So we are not doing anything separately with them, because the demand of product is there. In fact, even on Amazon one of our products featured but could have put by somebody else, so we asked them to withdraw it. These kind of things happen. When it comes to generic and others, as you know, we have seen this having more traction in the chronic space. Erstwhile products, brands over INR 50 crore, very well developed with good prescription support, they are comparatively less impacted by this. Also we do not have very high priced products. The generic price advantage, which the customer should get, it doesn't feature much. Yeah. Compared to some other companies, Indoco is in a much better place. Yes, this is an evolving kind of landscape and we are aware and watching it. I understand. Thank you, ma'am. Sundeep, on the export side, you mentioned freight costs as well as one of the issues in terms of being able to supply to European countries. Again, some of these indexes like the Baltic Dry Index, et cetera, that we track, they are showing some cooling off in freight rates and higher availability of containers. Is that something you have noticed around as well? Yeah, yeah. See, the problem started because of non-availability of containers. You know, simple economics, you know better than me. When there's a shortage, the prices shoot up, and that's what happened. Yeah. Manufacturing of containers was taken up on a war footing globally, and today the situation is eased quite a lot, and as a result of which the prices of the rates of freight have come down. My question was that from the second quarter onwards, which is, I mean from July onwards, have you seen more lag in manufacturing and dispatch, or is there still a significant lag between manufacturing and dispatch? No, no, no. The lag is very, very short. The moment the batches are ready, they're lifted off, go to the seaport and shipped immediately. I get that. In the API bucket, Aditi ma'am, I think. See, for Patalganga, you know, we expanded capacity, and I think we've talked about it. How do we stand external API percentage we are consuming more and more internally, but please give us. Again, I couldn't hear you very clearly, but I think I get a gist of what you're asking. As you rightly said, our internal consumption is going up, but we are also now able to, you know, last year we suffered from this specific issue where our internal customer satisfaction and external customer deliverable clashed for time. Some of our capacity had gone wasted. This year, there is very good planning, and I expect we will do much better. We have orders. We have orders both from internal as well as external customer, and we are working towards it. I feel this year we expect a good growth in API this year. I understand. Wish you all the best. Thanks. Thank you. The next question is from the line of Cyndrella Carvalho from JM Financial Limited. Please go ahead. Thanks for the opportunity. Ma'am, I just wanted to understand from you how should we understand our injectable portfolio strategy ex-U.S.? What is the thought process over there apart from the U.S. market? Do you have any plans which you could share with us right now? Currently the injectable business we are concentrating only on U.S., because in India, if you want to go into injectables, you must have a front end in the critical care where we do not have one. This is an entirely new business thing we'll have to look at. Within U.S., there are many injectables which are in shortage. If you check FDA sites on any particular day, you'll see that. That's because, not only are injectables very much needed and demand increases day by day, but they're difficult to make and several plants have had challenges on sterility and other fronts. It becomes a good niche segment to be in because if you are able to deliver products well, then you can garner good market share. In the injectable space, for Indoco, we are getting into difficult to do and complex injectables, so that we do not want to get into commoditized kind of segment. I hope that answers your question. It does. Ma'am, if we have to understand what is the kind of capacity utilization for our USFDA approved plants as of now, if you could share any rough indication around that. Right now, I think, plant two, which is a sterile plant, we are about 67%-70% capacity utilization. Plant one, we have plenty of capacity. We are supplying only one product to the US. Plant three, our capacity is occupied right now because of European products, which we are going to transfer to Baddi. Once that happens, that plant will be totally free to manufacture US products. Thank you so much. That's it from my end. Thank you. Thank you. As there are no further questions, from the participants, I now hand the conference over to the management for closing comments. Yeah. I'm really thankful to the participants for a very, very active call. Wish you all safe and healthy period ahead. All the best wishes to you and your family. Thank you very much. Thank you. On behalf of JM Financial, that concludes this conference. Thank you for joining us, and you may now disconnect your line.