Ladies and gentlemen, good day, and welcome to the Ipca Laboratories Earnings Conference Call, hosted by DAM Capital Advisors Limited. As a reminder, all participants' lines will be in 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. Nitin Agarwal from DAM Capital Advisors Limited. Thank you, and over to you, Mr. Nitin. Yes, we are. Good afternoon, everyone, and a very warm welcome to Ipca Labs Q1 FY25 Earnings Call, hosted by DAM Capital Advisors Limited. On the call today, we have representing Ipca Lab management, Mr. A.K. Jain, managing director, and Mr. Harish P. Kamath as corporate counsel and company secretary. I'll hand over the call to Mr. Jain to make the opening comments, and then we open the floor for quick Q&A. Mr. Jain, please go ahead, sir. Yeah. Thanks, Nitin, and DAM Capital for organizing this call. Good afternoon to all participants, and thanks for taking out time and joining us for FY Q1 FY25 Earnings Call. Today's call and discussions and answer given may include some forward-looking statement based on our current business expectation that must be viewed in conjunction with risks that pharmaceutical industry business faces. Our actual future financial performance may differ from what is projected and perceived. You may take your own judgment on information given during the call. Our domestic formulation business for the quarter has delivered a growth of around 12%. If you look at external data, mid-June 2024, Ipca ranked as the 16th pharma company in IQVIA, and it's the fastest growing company among the top 20 players, as per mid-June 2024. We have delivered market-leading growth in both acute and chronic segment, and data recorded by IQVIA for Q1 2025. Overall, IPM in this period has grown by around 9%, and Ipca delivered growth of 13%. On acute segment, IPM growth was around 8%. We have growth of around 12%, and on chronic segment, IPM growth was 11%, and we have delivered around 20% growth as per IQVIA. The company continued to increase its market share. In mid-June 2024, our market share has crossed around 2.01% from 1.91% in mid-June 2023 And for Q1 2024, our market share has gone up to around 2.17%, as against Q1 2023 of 2.06%. So there is a clear gain of almost around 11 basis points. From export formulation business, there is a decline of 1% in Q1 2025, from around INR 398 crore- INR 395 crore. We face major challenges in, shipping, getting containers timely, and, some of the challenge, also faced in, on supply chain side. That has resulted in decline in the business. On API business, we continue to face, some challenges, and, in Q1 2025, the business declined, by 2% to INR 295 crore, as against, from INR 295 crore to around INR 287 crore. On margins, basis, if you look at margin, our standalone, EBITDA margin for Q1 is 22.25%, is better than our guidelines of 21% for the, for the financial year. Our consolidated EBITDA margin might be around 18.52%, is also better than overall guidelines for the year, at around 18% for the year. Improvement in the margins are because of improvement in overall product mix, lower input costs, as well as lower manufacturing and other costs. Income from operations, if you look at, the company has delivered a standalone growth of around 5%. It is lower compared to our guidelines of around 10.5%- 11%, largely because of exports that we have discussed above. We expect better growth in line with our projections for Q1 2025 and also for the rest of the year. Consolidation results are not comparable, as Unichem results are consolidated from the second quarter of the FY 2024. I mean, given the broad numbers, then I would request participants to ask their questions. 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 the questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity, sir. Sir, on the gross margin front, firstly, on an ex-Unichem basis, there has been a very healthy improvement. Is this to do with lower exports? And so if as the exports scale up, would we see some rationalization of gross margin going forward? Okay, on export also we have good margins. So it's not that, except the U.K., where the margins are little lower, but all other markets also we have, we have got good, good margins. So the reason for overall, So, these kind of gross margin is sustainable for FY25 also? If you look at the only factor which is there, that we have lower gross margin on API side, and API business has not grown. But to some extent, because of this product mix also, there is a margins could be better, but, it's largely because of product mix improvement and also because of lower input cost and also our operating costs remaining in control. Understood. And exports, so if you look at our manufacturing other expenditure, that has grown by just 2% year. Right. Right. And on the exports- Employment cost may be around 9% year. Yeah. So I'm sorry for that, sir. Yeah. Secondly, on the exports also, do you see revival happening soon, or this logistics issue might, you know, prevail for a couple of quarters? Logistic issue will take some more time because the ground situation has not improved yet. So those issues will continue for some more time, but export certainly will improve. I think the major setback in this quarter we have faced was, must be, one particular geography, Australia, New Zealand, where the business has dropped down by almost around INR 30 crore. So that is the one which by and large is relating to some supply chain on the API side that got little issues. So we didn't, we are not able to manufacture those kind of products. The supplies may come in, maybe in this quarter, so systems will start happening again on the third quarter on those from that market. So that was the major challenge we have faced during this quarter. Some exports, the shipment also got little delayed in the market, yeah, because of the shipping issues. Understood. And lastly, on API side, so if you could just say, what would have been the volume growth and the price erosion that would happen in the quarter? Price erosions are now very limited. Price erosions were there, but now it's very, very limited. Now it's not, maybe 2%-3% here and there, but price erosion trend has stopped now. And, I will say that input cost is also not moving up to that extent. There is a marginal improvement here and there in solvents and others, but by and large, margins are, your material costs are also very stable, yeah. Understood. Thank you. That's it from me. Thank you. The next question is from the line of Ayan from Nomura. Please go ahead. Hi, sir. Good afternoon. Just wanted to understand, you know, the issue on export formulation and API, you highlighted a few issues. Also, the guidance that you had given, end of last quarter, with respect to API, you know, delivering 6%-7% growth and generic also double-digit growth. How should we think about that, given this uncertainty and you know, how much it can be recovered for the rest of the year? Yeah, our guidelines are around, overall guidelines, if you look at were 10.5%-11% growth for the year. And, I think second quarter, we certainly delivered that kind of growth. And, going forward, that also that kind of growth will come, but I think whatever deficiency has come in the quarter, that's very difficult to bridge. So overall, for the year, there, there could be overall growth of around 9% or so, broadly. Okay, understood. And on Unichem, if you can update on the progress that you've seen. We've seen improvement in gross margins and, you know, the overheads have remained largely flat. So, how are you thinking about the progress there and the synergies that you mentioned, both on the revenue and the cost side, where are we with respect to realizing those? And, you know, if you can give some color on the future there. So on the top-line side, the, I think, there is a marginal pressure on pricing, so it's not very high. Even looking at that also, the overall, there is gross margins has improved because, we could, substantially reduce the lower pricing on procurement side. And advantage we could extend for the, overall combining the volumes of procurement, of Ipca and Unichem put together and then negotiating the prices. So our price negotiation is, far more improved. There are certain operating efficiencies has come in the, their operations, and that is also resulting in the overall better margins, margin side. And on utility side, they have further improved the cost on utilities, and therefore, their manufacturing, other expenses has not gone under, grown, in line with overall business growth and all. So that also savings has come. Some of the intermediates, they could reduce the cost of productions and I think that's going to be commercialized in next two quarters. So that advantage will also come. And as far as the other objectives of market extensions are concerned, there is every month reviews happening and a lot of work are happening on that line. But it's maybe a, I think those advantage would come in the... I think maybe around one and a half year from now. It's nothing is going to come very quickly because a lot of work are happening, the other compilations are going on. They will be filed with regulators, and once they review and whatever their queries are there, that's replied. Only after then we will get the approvals, and then marketing preparations will lag. So it's a 1.5-2 years kind of journey. So that work is continuously going on for extending products to the various markets, whether it's Europe, whether it's a market in Latin America, like Chile, or whether it's Australia, New Zealand or those kind of Canada markets. So everywhere, those kind of work are happening. So that's a little longer term, and that is what will give the real advantage once those benefits start coming in. On API process reduction side, also a lot of work is happening, but again, it may take 1-1.5 years time for that to reflect in the results. So right now, it's basically all low-hanging fruits. That is what we could like is creating efficiencies, purchasing efficiencies and their shipping costs. I think earlier they were practically almost around 60% of their volumes were going through air and 40% by sea for US market. So that has been reversed now. It's only 17%-18% is now going by air. But in spite of that, their freight costs have moved up in this quarter, largely because sea freight has also grown almost around 3 times. So that is somewhat but overall, maybe I think in time to come, maybe situation will ease. And I think what operational efficiencies which we have built up, that will bring even shipping costs in time to come down. So that will further help to the overall profitability of Unichem India. Okay, sir. Thank you. I I will stand by. Yeah. Thank you. The next person will be from the line of Shiva from Purnartha Investment Advisers. Please go ahead. Hello? Yeah. Yeah, thank you for the opportunity and, congratulations on strong margins as you've posted. My first question is with respect to Unichem. For the full year, I just wanted to understand, obviously, Unichem posted a great number last year in generics. So the base has been little bit on the higher side, and, the first quarter, as you pointed out, one was the logistics, which is going down. But on an overall level, how do you see the environment of generics in USA per se, and how do you look at it for the year of Unichem? There are not much pricing pressure. It's only marginal pressures are there. But otherwise, let's say the U.S. is a good market, and we are not seeing that kind of bloodbath now. So, it's a better time for the generic business overall. The demand outlook is strong? How are you, like, do you feel there's a double-digit potential growth or how do you look at the overall growth? It's possible to achieve double-digit kind of growth for us, yeah. Okay. Perfect. Okay. And, with respect to MR, obviously we've added substantial amount earlier. Just wanted to understand, what was the productivity of the MR for the full last year? And what is the current strength, and how do you look at the productivity for this year, as a percentage of the company for the exact number, but how—what kind of improvement are we looking at? We have around, close to around, 6,500 MRs right now. Last year, maybe around 800 less than 6,000 around that time. Some more MRs are being added now, because one more division on team we are, we are starting now. It may be around next two months' time, that division will be launched in the market. So in overall productivity, I think around, the, first quarter last year, we had a productivity of INR 4.21 lakhs. Current year, first quarter, it is around, I think, two points, 4.52% kind of, INR 4.52 lakhs is the productivity per month. There is a significant improvement from INR 4.21 lakhs-INR 4.52 lakhs per month, per month, despite the overall increase in the same, same staff. Thank you very much. Ladies and gentlemen, before we take the next question, I would like to remind the participants that you may press star and one to ask a question. The next question will be from the line of Damayanti Kerai from HSBC. Please go ahead. Hi, good afternoon, and thank you for the opportunity. So you mentioned the shortfall on the export side, which you have seen in one quarter, that might not be bridged. So, how do you see the overall export growth for the market? And, in terms of profitability at the consolidated level, what are your expectations for FY25? Overall, I think top line growth, our earlier position was around 10.5-11. That may remain around 9% for the whole of the year, for the company. I'm telling you, we stand alone. As far as profitability is concerned, I think that it's going to be better than what we have initially projected. So we, what the earlier guidelines we have given last year was, for the Q4, around that time was, the profitability, of around 18.5% overall years. Consolidated. Consolidated margins we have guided. And overall, EBITDA for the full year was guided around 20.5%-21%. So there are possibility of further improvement in that, because our current quarter margins are better, and second quarter, we are the much better quarter, so it may further exceed that. And overall, margins are maybe around 0.5-1 basis point, it will be higher than what guidance we have given earlier. Okay, that's helpful, sir. My second question is, if you can update us on your advancement in the US market, in terms of how you are advancing in supplies or in filing for the market. Look, I understand it's slightly longer term to scale up, but nonetheless, if you can talk about the progress which we have happened, which we have seen so far. So currently we are, I think two products are launched already there, and I think in this, balance period of current financial year, at least, 3-4 products will be commercialized more. So around 5-6 products will be, launched in current year, and, then next year, maybe another, another, 6-7 products may be launched. So overall, next two years, I think we should reach to around 12-13 kind of products in the market here. Okay. But, this should be helping at least in better utilization of your US plants, right? Although, like, sales will come, maybe, later on. We'll see better sales later, but at this point of time, you are utilizing plants better, and, that makes it- Better, and that will also improve the overall profitability, because most of these products are from captive consumption. So So practically everything is from captive consumption. So our API plant utilization and our formulation plant utilization, both will. And that will add to the overall margins also. So the 12-13 launches in next two years, cumulatively, and, what's the update on the filing part? Are you filing new products or, on the existing ANDAs only you are trying to update the details? Last 10 years, we have not worked on US market, so, there is no pipeline for filing in Ipca as far as... So that pipeline is building now, so, and it takes time. So a lot of bioequivalence studies and other things are going on. So, once we file, then we will start updating, but still, I think maybe 6-8 months away from filing anything new. Okay, sir. That's helpful. Thank you, and I'll get back in touch with you. Thank you very much. Ladies and gentlemen, in order to ask a question, you may press Star and One. Ladies and gentlemen, I would like to thank you. In order to ask a question, you may press Star and One now. As there are no further questions from the participants, I'd like to hand over the conference to the management for closing comments. Hi. We have nothing to add, so if there are no further questions, we can close this con call. Thank you. On behalf of Dam Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.