Ladies and gentlemen, good day, and welcome to the Ipca Labs earnings call Q4 FY 2026, hosted by DAM Capital Advisors 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 touch tone 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, sir. Thank you. Hi, good afternoon, everyone, and a very warm welcome to Ipca Labs Limited's Q4 FY 2026 post-results 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 Kamath, Corporate Counsel and Company Secretary. I will hand over the call to Mr. Jain to make the opening comments, and he will open the floor for questions. Please go ahead, sir. Thanks, Nitin. DAM Capital for organizing this call. Today's hearing call and discussions answer given may include some forward-looking statement based on our current business expectation. This must be viewed in conjunction with the risk that pharmaceutical business face. Our actual future financial performance may differ from what is projected foresee. You may take your own judgment on information given during the call. Our domestic formulation business in Q4 FY 2026 has delivered a growth of around 12%. Business was at around INR 853 crore as against INR 764 crore in Q4 2025. Mid-March 2026, Ipca rank continued to remain at 16. However, we have marginally improved our market share to 2.09% as against 2.08% in mid-December 2025. Six of our brands are featuring among the top 300 brand in the industry, and both chronic and acute segment, we are continuously beating the market. Overall, for FY 2026, our domestic business has grown by around 10% to around INR 3,817 crore as against INR 3,455 crore in FY 2025. Our export formulation business has delivered growth of around 9% for the financial year 2026 to around INR 2,083 crore from INR 1,919 crore. The promotional business for the quarter has delivered growth of around 14%, and for all of the year also, this business has delivered a growth of around 14%. Overall business for the financial year is around INR 664 crore on promotional business, promotional branded business, export business, as against INR 582 crore in last financial year. Generic business, excluding tenders, has delivered growth of around 17% for the financial year to around INR 1,149 crore from INR 982 crore in FY 2025. Our institutional business has declined during the year to around INR 270 crore from around INR 355 crore in last financial year. Even in the last quarter of the current year, also, business has declined to around INR 74 crore as against INR 111 crore in Q4 FY 2025. API business for whole of the year has delivered business growth of around 10%. The business now stand at around INR 1,396 crore as against INR 1,266 crore for FY 2026. Overall consolidated business for the company in FY 2026, March 2026, has grown by around 6% to around INR 2,388 crore from around INR 2,274 crore. Consolidated revenue for whole of the year has grown by around 8% to around INR 9,646 crore around, against INR 8,940 crore for the financial year 2025. Standalone EBITDA margin for the Ipca in Q4 has improved to around 25.27% as against 21.19% in Q4 FY 2025. This is an improvement of almost around 4.08%. For the financial year, March 2026, overall EBITDA margin standalone for company has gone up to around 25.18% as against 22.66% in March 2026, an overall improvement of around 2.52%, and we have significantly overall improved the margins as against our guidelines for the financial year. The consolidated Ipca Q4 FY 2026 EBITDA margin has improved to around 20.52%, as against 18.24% in Q4 FY 2025, an improvement of around 2.28%. For all of the financial year, March 2026 EBITDA margins has improved to around 20.72%, as against 19.94% in March 2025, an improvement of around 1.78%. We have delivered better margins as against our guidelines of 20% for FY 2026 overall. Having given the broad numbers now, I'll request questions from the participant. 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 in the touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Far as concerned, requested to use while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Aanchal Jalan with Lotus Wealth. Please go ahead. Hello. Thank you for taking my question. Sir, if we want to grow at 15%-20% for the next two to three years, how many molecules do you think we should be launching at a yearly level? Because old molecules will have higher competition and price erosion is also happening there. How many launches do you think we should be doing in a year? Secondly, what is our product pipeline for Q1 and Q2 of FY 2027? Yeah, that is my question. As far as we are concerned on the old molecules, we don't see any kind of price erosions as such. Normally, our policy is to take the price rise of around 5%- 6% in a year, depending on what kind of price rise competitors are also taking at the marketplace. That policy will continue that way. As far as domestic market are concerned, we don't launch too many products in a year. Each division has around two or three power brands, and then there are support brands in each division. At the most, in each division, we may launch one product or some line extension here and there. If we have 20 divisions in the year, we should be launching in domestic market around 18- 20 products. That has been our business philosophy because the more number of products you launch, the attention of the people get diluted. That results in the overall defocus from your power brands. We normally don't launch too many products in the marketplace. As far as generics are concerned, let's say currently we are marketing around eight products in U.S., and I think this year also, maybe around six to eight products will be commercialized in the current financial year. As far as European and other markets are concerned, each market situations are different. Normally we launch three to four product in each market in every year in generics. That is our overall position. Okay. Sir, specifically for Unichem, six to eight product, right? Unichem has also good pipeline, and I think they should also be launching at least five to six product in current year. The whole year of FY 2027? Yeah, that's a part from Ipca. Okay. Thank you. Thank you. Our next question comes from the line of Surya Patra with PhillipCapital. Please go ahead. Yeah. Thanks for the opportunity, sir, and congrats for the good set of numbers. Sir, the first question is on the U.S. business. Is it possible, since it is a full year financials, what was the U.S. revenue that we would have generated out of Ipca? What outlook that we are providing for next year? Okay. One minute. Overall, if you look at the consolidated numbers for the overall business, Ipca U.S.A. and Unichem U.S.A. put together, I think in the quarter, U.S. has done business of around INR 428 crore as against INR 388 crore in Q4 last year. There is a growth of around 10%. Overall, for the full of the financial year, U.S. business is around INR 1,567 crore as against INR 1,379 crore last year. U.S. has given a growth of around 14% on consolidated basis. Okay. Similarly, sir, if you can just give some sense about the kind of a growth that you have seen for FY 2026, basically, for the key markets like let's say Europe, Africa, CIS, Australia, like that. Let's say India should be growing around 12%-13% in the current financial year. CIS market will have around 10%-11%. Overall promotional market, we expect almost around 12%-13% kind of growth. Overall generic market will also have around 12%-13% kind of growth, which will include the U.S. also. Overall, company as a whole, we should be able to, including Unichem and put together, around 12%-13% kind of growth on consolidated basis. On EBITDA side, from 20.7% currently on consolidated basis, I think it should be almost around 22% or 22.3%, something, more or less on that line. Okay. Next point was about the gross margin, sir. In fact, we have seen strong improvement. For the full of the year also, there is a kind of improved performance that we have seen. See what can be attributed for this improved performance, whether it is the currency advantage or it is the synergy or it is the product mix improvement, U.S. picking it up? What would have contributed to this margin improvement, and how sustainable the gross margin be? I'd say if standalone, you look at as against growth of around 10%, our overall material cost has declined by around 2%. Great. Overall, for the whole of the year, except from February onwards. Earlier, the overall prices of materials has remained steady. There was not much of fluctuations as far as the material cost was concerned around for the first 11 months, say, for the whole of the financial year because we maintain certain stocks. As far as consumptions are concerned, not much. Except in February and March, the solvent prices and some other materials which was supply chain disturbance, like ammonia and so many other things, acid alkali, there are many of those materials has moved up. Little material cost has moved up in the month of February and March in Q4 of the current financial year on a standalone basis, if you look at the numbers. The improvement in overall margins is by and large because of product mix changes. Okay. If domestic business is doing good, ROW market business is doing good. Cardiac business proportions has moved up, overall, the generic business, which is happening in most markets, has also given us the better overall margins. Even on the API side, we have improved overall margins. That has resulted in overall margin improvement on standalone basis. As far as Unichem is concerned, their overall EBITDA margins has declined from 12% to around 8%, and their turnover has not moved up. That has resulted in overall, otherwise, EBITDA margins improvement for consolidated business would have been further higher. Okay. Just last one point, sir. Whether this supply chain disruption or any impact on the raw material availability or the price rise, that situation is kind of already behind us or even the current quarter, subsequent period could see some impact in the FY 2027? There is a significant improvement increase in the prices now. Let's say if you look at packaging material, aluminum has moved up, PVC, PVDC has significantly moved up. On solvent price, if you look at prices are still 40%-50% higher than what we were paying in the month of January or earlier in the whole of the financial year. Let's say prices of lot of other API has moved up because of, again, some or other things in the supply chain is disturbed. Overall, I see if current trend of petroleum prices remain, overall material cost should rise by almost around 10%-12%. That's the kind of price rise is there currently in the market. Like, say, simple product like paracetamol has moved up significantly, metformin has moved up significantly. That movement is much higher than what number I am talking. I am talking of overall. Okay. That overall is around 10%-12% kind of overall increase is there in the marketplace. Practically, the product prices have gone up higher than the input prices. I would say that these inputs has gone up. Again, sir, what is happening on our output, like say, as far as API is concerned, what we are selling today, entire cost increase, we are passing on to the consumers or to the buyers. There are no issue. As far as the domestic market is concerned, products which are in price control, the prices remain at same level. You can't increase even INR 0.01 on that. Overall, the other decontrolled product as against 5% kind of price rise, which we are taking. Looking at the overall input cost increase, this year price rise may be a little higher, maybe around 6%-7%, to offset the kind of price increase which has happened at the marketplace. That will completely offset the entire overall cost rise, which are there in the marketplace. As far as generic market are also concerned, there the arrangements are little longer term, we are taking up with the buyers and increasing the prices wherever there are possible. I don't foresee much of that impact coming. There could be maybe half a percent point increase or maybe 0.75% increase in the material cost. I don't think so that will disturb my EBITDA margin significantly in the current year because, again, the product mix change and that playing. Overall, your margin, and therefore, I given the projections also of guidelines for the EBITDA margin for whole of the year, that it will move by around 1%-1.25% in the current financial year. As against earlier, we were always talking of around 1.5% or little more EBITDA margin improvement. That's little lower guidelines is only on account of material cost. If the petroleum prices again start moving up lower, then probably margins could still be better. Sir. Yeah. Thank you, sir. Wish you all the best. Thanks. Thank you. Our next question comes from the line of Rajkumar Vaidyanathan with RK Investments. Please go ahead. Yeah, good afternoon. Thanks for the opportunity. Sir, I just want to know what is the outlook for the Unichem business. When do you think the margins will improve? Unichem last financial year, their U.S. business has not grown up. Mainly because from certain high volume businesses, they have lost certain market share. They have again started gaining the market share, I think in current financial year, their U.S. business should grow by around 10%. Hopefully with that, the margins will also move up. They have done well in European market in last financial year. We also see from further from that point of view, that business will improve and margins will improve there. Plus, they have also incurred certain additional cost in last financial year because of their Ireland facility, there were manufacturing was happening, that is closed. Those people were also given the package on severance and all those kind of things. That cost also got debited. All those productions are shifted back to India. That also will result in better margins overall on production of those products here. Also the overhead cost which they were incurring in at Ireland facility may be around EUR 4 million-EUR 5 million. That expenditure will also stop in the current financial year. Overall there will be better improvement in Unichem also in the current year. Okay. We foresee that I think Unichem margin may become around 12%-13% in the current financial year from that level. From that level again in future years, as our filings in other markets start coming up and then we start launching products in other markets, margins will keep on improving. Okay. This 12%- 13% that you mentioned, that is the overall margin for FY 2026/2027? For Unichem, yeah. Overall, the full year margin, right? Yeah. Okay. Sir, the second question is, this inventory at Unichem seems to be on the higher side. Last quarter also I raised this question. You said there are some actions being taken, the inventory remains more or less at the same level as 25. Overall, I think inventory-wise, a lot of actions has been taken. If you look at the nature of business itself, in case of Unichem, because it's a U.S. business and supply chain disturbances all were happening. Certain kind of inventory, the movement was taking longer time by ship and all that. They have started shipping everything from ships instead of air shipment. Significant amount of air shipment was there in Unichem, maybe a year back to almost around 40% kind of shipment was moving by air. Now it's hardly around 4% or 5% kind of shipment are moving air. Therefore, the whole transit time has improved and increased and all that. Little inventory has gone up on that account, but overall, we don't see any kind of concern on that account. Okay. U.S. cycle itself is little longer, and their business is mainly U.S. Okay. As far as Ipca is concerned, if you look at overall last two years, if you look at FY 2025 and FY 2026, by and large put together our inventories and receivables entire, there's hardly any money has been put in overall in working capital. Overall there are accruals and there is hardly any kind of money has gone in working capital in last two financial years. We have perfect control. Okay. As far as your overall inventory cycles are concerned. Okay, sir. Sir, lastly, the question is on the Lyka Labs subsidiary. The performance has been deteriorating, because last year you took a impairment for Krebs Bio. Will it also lead the same way? Because the performance is really deteriorating quarter- on-q uarter. Let's say, I should not be speaking for Lyka Labs. I think they should be talking to Lyka Labs on that part. Otherwise, I see broadly, if you look at, they have started marketing their injectables and animal healthcare products in the market. They have recruited lot of field force. It takes time. Last two years, significant amount of expenditures has gone in creating the more sustainable business because of that. Because of addition of field people, there is on P&L account there are pressures, I think journey is going very well as far as those animal healthcare and the team which has launched and also the critical care team they have launched, they are progressing well and we don't foresee much of concern on that account. Maybe their profitability is currently lower, but as the time goes, these teams start maturing and business start building up, margins will start moving up there also. Okay, sir. Thank you so much. Thank you. Our next question comes from the line of Shashank Krishnakumar with Emkay Global. Please go ahead. Hi. Thanks for taking my question. My first one was on the other expenses bit for Unichem, which saw a sharp increase this quarter. Was it primarily driven by an increase in R&D? If you could also share what the R&D spend was, both for Unichem and Ipca standalone as a percentage of sales FY 2026. I think Unichem, that other expenditure moved up is largely because of R&D, because they are looking at some kind of institutional business in U.S. Around four to five products technology transfers are given to third-party manufacturer, so that we can manufacture those products for U.S. itself to supply for the government purposes. Therefore, this quarter had around INR 10 crore-INR 12 crore of additional expenditure on account of those technology transfers to the U.S. are supporting manufacturer. Other than that, there's hardly any kind of exceptional cost. The other expenditure is by and large moved only on that account. Got it. What was the R&D for Unichem and Ipca this year, FY 2026, as a percentage of sales? It's around 3.71%. Got it. Just secondly, if you could just share the market-wide growth trends for the year gone by for both branded formulations and generics. Particularly because this quarter we saw an increase in generic revenue, so which market primarily drove that? If you could just share some color around how the individual markets have performed. Domestic has grown by 12% for Ipca. Branded formulations have grown by 14%. Institution has declined by 33%. Generic market in this quarter has grown by around 39%. That's overall Ipca is concerned. As far as for whole of the financial year is concerned, domestic has grown by around 10%, branded by 14%, institutional there is a decline of around 24%, and generics has gone up by around 17%. That is already given in press release. If you go through our press release, all those numbers are very well displayed there. Yeah, I was looking for more market-specific trends, which you usually share. Any particular market which drove growth this quarter or during this financial year? Let's say, branded is by and large driven by, let's say, our CIS market and French-speaking African market. India is by and large driven by our pain and cardiac and derma in Europe and CNS portfolio what we have. Institutional has by and large declined because of funding constraints currently being faced by the institution. Generics are both Europe has done well, Australia and New Zealand has done well. It's a broadly all markets, and also the U.S. launches which has happened current year. Overall, the business has been good as far as generics are concerned. Got it, sir. Just the last one, if I could squeeze in. If you could just comment on the performance of subsidiaries ex of Unichem in this quarter and for the full year. As far as Unichem are concerned, I think current year was tough for them. I have already shared the guidelines as far as Unichem is concerned, that how they will be performing in current financial year. They should be growing around 10% in current financial year. They will improve their EBITDA margins also. Other than that, we have a domestic subsidiary which is called Trophic Wellness. They have done well. I think they have significantly contributed. They are marketing nutraceuticals. Their business is maybe around INR 125 crore, and I think they are generating profit of almost around INR 40 crore plus overall profit. That. Lyka I have already talked about. It's not our subsidiary, it's associate company. As far as the Krebs are concerned, their performance is improving now. One of their plants, which is at Nellore, has started EBITDA positive. Other plant, there are certain concerns going on right now as far as pollution departments are concerned. Once that is resolved, I think hopefully we should be able to put that plant also on EBITDA positive kind of number. As far as European subsidiaries are concerned, we have two subsidiaries in U.S. One is Ipca formulation marketing company, and another is Onyx Scientific, which is doing your business of rendering the research services to the other formulation company. Onyx is facing some kind of issues there because of overall inquiry levels for those kind of projects has gone down because of current overall environment. This subsidiary last eight, 10 years has been doing very well. Last one and a half years, there are certain issues. We are now seeing signs of improvement there. Ipca subsidiary which is marketing the formulation, particularly in U.K., that has given a loss of almost around GBP 2 million-GBP 3 million. Largely because of last financial year, the pricing scenario in that market was very, very bad. We are seeing now again there lot of shortages and overall improvement in the prices. We hope to do better there also. As far as U.S. subsidiary is concerned, it's only one, which is the major one, which is Pisgah Labs. There also, there is a formulation facility is under construction there. I think probably in the fourth quarter of the current financial year, they should be ready to commission the plant. Any meaningful turnover coming from there will be, I think, in next financial year only, not in current financial year. Their API facility is also seeing now good order position now. Hopefully there will be further improvement in that operations also. Got it, sir. This is very helpful. Thank you, and all the best. Thank you. A reminder to all the participants, if you wish to ask a question, please press star and one on your touchtone telephone. Our next question comes from the line of Tushar Manudhane with Motilal Oswal Financial Services. Please go ahead. Yeah, thanks for the opportunity. Sir, on the exports front, you have guided for broadly 12%-13% revenue growth. Is this considering the currency depreciation as well, or is this in INR terms? No, the guidance given is in INR terms, Tushar. Okay, got it. As far as domestic formulation is concerned, given the raw material link pricing, but if you could share what could be the price volume new launches growth that we can expect for FY 2027? No, the guidance given for domestic branded business is around 12%. Maybe out of that, 1%-2% could be new product and balance price increase and volume. Understood. Sir, if you look at our overall material cost to sales ratio of Ipca, it's only 25%. Even if there is a 1% increase, that will get offset by overall increase in the top line and also overall the profitability of your products in domestic, ROW and all those kind of things. We don't foresee that this ratio will significantly alter. Maybe it's only 0.5% here and there. Yeah. How has been the freight cost trending, or will that maybe like at a gross margin level, I understood it's possible to pass it on the increase in the raw material? How to think about the freight or the logistics cost? Normally, let's say our branded formulation business and certain API business, that all happens through, let's say, C&F basis. There are a lot of other generic businesses that happens on where the freight are borne by the party. Overall, I think our freight cost has moved up by almost, I think, in the fourth quarter by almost around 25%. That trend is continuing currently also. That will have some impact on the profitability. Till the time this issue remains of Iran-U.S. kind of conflict, which is currently happening, the Strait of Hormuz and all that kind of thing. Oil prices are elevated. Wherever air shipments are concerned, the freight has multiplied now. Even getting the sometimes the cargo availability of space also, it take lot of time. Sometime material remain for 10, 15 days. Availability itself is becoming an issue now to the various destinations. That issue is remaining, yeah. Effectively, will this have impact on Q1? Overall, we think that subsequently in the coming quarters, we'll sort of come back. There will be some impact of that. There will be some impact, but if the business improvement is also there, like say last year we have grown by 10%, this year we are guiding for 12%-13% kind of growth. That growth will offset everything. Understood. Got it. Thanks a lot. Material cost to sales ratio is around 25%. If you take your overall gross margin addition itself will be high. All these costs should get offset. Got it, sir. This is helpful. Thank you. Thank you. Ladies and gentlemen, a reminder to all the participants, if you wish to ask a question, please press star and one on your touchtone telephone. As there are no further questions from the participants, I now hand the conference over to the management for closing comments. Yeah, since all questions are answered, I think we can close this conference call. Thank you everyone for participation. Thank you. Yeah. On behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.