Ladies and gentlemen, good day and welcome to the Q3 and nine months FY26 earnings conference call for Jagsonpal Pharmaceuticals Limited. As a reminder, all participant lines will be in a 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 Ms. Soumya Chereddi from Go India Advisors. Thank you, and over to you, ma'am. Good evening, everyone, and welcome to Q3 and 9 months FY26 earnings phone call of Jagsonpal Pharmaceuticals Limited. We have on call with us Mr. Manish Gupta, Managing Director, Amrut Medhekar, Chief Operating Officer, and Nilay Vora, Chief Financial Officer. We must remind you that discussion on today's call may include certain forward-looking statements and must be therefore viewed in conjunction with the risks pertaining to the business. I now request the management to take us through the same and provide some more insight on the quarter gone by. Post that, we'll open the floor to Q&A. Thank you, and over to you, sir. Yes, thank you, Soumya, and good evening, everyone. Thank you for joining us today for this earnings call of Jagsonpal Pharmaceuticals. We appreciate your interest in JPL and your continued support as we navigate through this pivotal phase in our journey. Our journey has always been about combining medical science with purpose-driven growth, and that commitment continues to define us. As you know, the last quarter saw strengthening of our leadership team with the appointment of Amrut as CEO and Nilay Vora as CFO. Both have settled well and are already making valuable contributions in driving the next phase of Jagsonpal. Coming to the performance during the quarter, it was at best flattish. We acknowledge that this outcome has been below our own expectations as well as relative to the broader Indian pharmaceutical market. While we faced the headwind of our RPM, which is the market that we are present in, growing at less than half the IPM growth, we also lost a bit as we reviewed and refreshed select strategies under the new leadership with an overall intent to improve the long-term growth engine of the company. The benefits of these should start reflecting from the current quarter itself. While the performance in the last two quarters reflected a temporary pause in our momentum due to certain transitional factors such as GST, which got changed in Q2, and our own improvement initiatives in Q3, on a nine-month basis or a year-to-date basis, we had a resilient performance with 6% growth in top line, driving a 13% bottom line improvement. As I mentioned earlier, we are confident of a growth acceleration to double digits from Q4 itself. At an industry level, the IPM grew at about 8%, largely driven by price growth of 5%-5.5%, even as the volume growth stayed muted. Our RPM has grown relatively slower at 3%-3.5%, reflecting the inherent cyclicity that some segments go through from time to time. Historically, such phases tend to rebound, and we expect growth to normalize and improve in the coming quarters. Overall, the quality of business stays robust, as is reflected in strong cash generation of over INR 15 crores during the quarter. Now, I request Amrut, our Chief Operating Officer, to take us through the performance and initiatives for the period. Thank you, Manish, and good afternoon, everyone. I'm honored to join Jagsonpal, which has built a strong reputation in India Pharma, and I'm excited to lead our next phase of growth. Our mission remains coherent: to deliver high-quality medicine at an affordable price and innovate with a patient-centric approach. We'll continue to strengthen our presence in the branded generics while expanding into new therapeutic areas where patient needs are underserved. I firmly believe that our greatest strength lies in our people. Together, we'll foster a culture of collaboration, accountability, and growth. My immediate priority is to empower our teams, reduce attrition, and strengthen the bond between the company and our team to ensure every colleague feels valued and motivated to contribute to our shared success. Strategically, we'll sharpen our focus on growth drivers, including orthopedics, women's health, and select therapies, while investing in digital transformation and supply chain excellence. Our goal is sustainable growth and balancing strong financial performance with long-term market leadership. I'll briefly touch upon our operating performance and execution priorities. Over the past few months, we undertook a deliberate recalibration of our field operations to enhance execution excellence and better align our resources with the core therapeutic priorities. This included a strategic repositioning of brand teams to sharpen focus on high-potential brands and optimize the field force deployment. While these changes led to some near-term disruption, including a phase of elevated attrition, they were essential to strengthen our commercial effectiveness. I'm pleased to share that this transition is now largely complete, and we are seeing clear signs of improved team stability as well as operational momentum. Going forward, our focus remains on improving field productivity, strengthening our brand investments where we see the highest returns, and driving more consistent execution across the markets. With the operational challenges largely addressed, we are confident of delivering improved performance in the coming quarters. I will now request Nilay Vora, our CFO, to take you through the financial performance for the quarter and the nine-month period in more detail. Thank you. Thank you, Amrut. Hello, everyone. Happy to welcome you all to this call, and thanks for continued support. Our third quarter performance remained largely flattish, with revenue at INR 73 crores. EBITDA for the quarter stood at 16.7 crores, translating into an EBITDA margin of 22.7% for the period. PAT grew by 10% year-on-year to 12.5 crores, with PAT margins improving by 180 basis points to 17.1%, reflecting the company's operational resilience and underlying brand strength. For the nine-month period, performance remained healthy, with revenue growing 6% year-on-year to INR 223 crores, while EBITDA increased by 5% year-on-year to 50.3 crores, with margin at 22.6%. PAT for the period stood at 35.9 crores, reflecting a 12.5% year-on-year growth, with margin at 16.1%. Our free cash balance now stands at INR 176 crores, reflecting an increase of INR 15.2 crores in the quarter, again reflective of our strong operational discipline. Coming to New Labour Code, based on initial estimation, we have provided for an additional past service cost of INR 2.1 crore as an exceptional item during the quarter. That concludes the update from our side. We shall now open the room for questions. Thank you. Yes, sir. Should we open the floor for Q&A? Yes, please. Yeah. Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question comes from the line of Deepesh Sancheti with Maanya Finance. Please go ahead. Hi, am I audible? Yes, sir. Yes. How do you think on an overall basis on how pharma companies will be taking this New Labour Code, and how has it affected Jagsonpal going forward? I don't think we can comment on how other companies will be taking it because. Overall, in the pharma business? I don't think it will be very different from how we have handled it. Clearly, there are guidelines around it. It is effective from 21st November, but the state rules and notifications are yet to happen. There will be some restructuring of salaries involved at all levels. But having said that, there will be some one-time hit as we have taken, and similar things will be probably applicable for most of the companies. But I mean, that's my general feeling. I don't want to speak on behalf of other companies. I personally welcome this move. It kind of puts up a common framework across all the setups, and it's a good move in the form of balancing the labor interest and the industry interest. Okay. So will there be any sales force rationalizations considered? Not at all. Not at all. Amrut, if you would like. No, no. There won't be any. This is Amrut. There won't be any rationalization on the field or at HO. Okay. Now, my second question is regarding the growth. I mean, firstly, is the management really happy with the 6% growth? And going forward, where do you see this? And secondly, how have the brands actually performed in this growth system? It's a mixed bag of performance. Obviously, as Manish has said in his opening remarks, the growth is not even as per our own expectations. So obviously, there's a lot of scope for improvement for us to do, and that's what we are on the job to do that. However, the growth, if you're asking in terms of breakup of the growth, then some of the brands have certainly outperformed the market, while some of the brands are lagging. So that's where we are working. And hopefully, we'll be able to beat the market growth as soon as possible. So will that affect our sales mix going forward? As in, are we planning to correlate this data and try to get a better sales mix going forward for these brands which are performing well? Is that going to happen, or we are going to explore the market as it is? Obviously, sales mix is primarily what the organization wants and where the need lies in the market. So that gap is obviously where we are trying to fit in. And if that means that it will change our gross margins, no, it won't. No, I'm not talking about the gross margins. I'm talking about the sales growth. I'm sorry, sales growth, are we going to go with the brands which are doing better sales? Yes, of course. So we'll obviously bet on the winning horses. Okay. So along with that, what will be the sales? I mean, what will be the growth drivers for the company going forward for the next one to two years? So the mix will largely remain as to how the India Pharma has been behaving. So 50% of the growth we are expecting with the price increase as well as some new product and new SKU introductions. And remaining will be the volume growth. Volume. Okay. Thank you so much. Thank you, Deepesh. Thank you. The next question comes from the line of Neelam Punjabi with Perpetuity. Please go ahead. Thanks for the opportunity. My first question is on the expense on account of the New Labour Code. So is this INR 2.1 crores one-off expense, or going forward, would this impact the employee costs that we have on a recurring basis? Yeah, Neelam, there are two elements to this. Since the impact has started from 21st of November, and yet the notifications from the respective state governments is yet to happen. We expect, or what we at least read in the media, that the reward from the state governments is only expected in the coming month, which is February. So we expect that the notification should happen early March or end of March. And therefore, the applicability will start from the 1st of April, essentially. However, we have provided for this code currently one time of INR 2.1 crores. And going forward, there's a very little impact in terms of the overall cost increase for the employee remuneration. Neelam, if I may just add, basically, if you see the code, there are two elements which impact. One is gratuity, the way gratuity is calculated, and the way leave encashment are calculated. So this INR 2.1 crore, because gratuity is relating to past many years of service, and leave encashment again is linked to based on company policy, how many leaves you can carry forward based on years of service. Therefore, this is a cumulative impact of the past. And hence, it is shown as one-time and exceptional as per the institute guidelines. And as Amrut has clarified, ongoingly, there is very limited impact. Understood. So this was very helpful. My second question is on overall growth of the company. So in the past, we have highlighted that Jagsonpal's portfolio should have a steady 12%-14% kind of organic growth going forward. So while we understand that in the near term, we've recalibrated and rejigged our portfolio. So going forward, are we sticking to this long-term three- to four-year outlook of 12%-14% organic growth? Yes, Neelam. So what we are looking at is if there are not any macro changes or external changes happening, we expect the growth to be into double digits. Got it. Okay. Thank you. And another question is on Yash Pharma. So if you could just comment on how has the acquisition played out, how have the brands of Yash Pharma played out since our acquisition? Are we happy with the progress? We are essentially looking at the past two years since the acquisition has happened. The team has really worked very hard, and today it is contributing more than the expected lines towards the growth, and also, we are looking at future further expansion of the portfolio into the specialty mix. Got it. Thank you. That's it from my end. Thanks, Neelam. Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one. The next question comes from the line of Aditya Chheda with InCred Asset Management. Please go ahead. Good evening. Can you please break your growth within price, volume, and new product launch for Q3 and nine-month growth? And if you have any rough mix that you can share between chronic, sub-chronic, and acute of your portfolio, that would be helpful. So Aditya, thanks for your question. However, offhand, I don't have this makeup exactly, but it is in the similar lines as the industry has, which is more than 50% of the growth is coming with the price, and the balance is coming from the volume and the new products. That's where we are. So we are no different from the industry growth currently. We expect that we will be able to increase our volume growth going forward as well as contribution from the new products. That's part one. Can you repeat the second part of your question, please? The mix of chronic, sub-chronic, and acute within the portfolio. See, we are not into very long chronic therapy. So typically, nowadays, the industry is having three segments. So you have chronic, semi-chronic, and acute. So we have a typical mix of roughly around 35%-40% of acute, and remaining is into semi-chronic. Got it. And we have reported a minus 1.5% growth for this IPM. It should be driven by the rejig. Aditya, your line has suddenly turned bad. Can you repeat the question? Yeah. Since we have reported a minus 1% growth for Q3, this should be all a function of lower volume growth led by the temporary rejig that the organization is going through. If you can advise more details about the nature of this rejig and what exactly was the exercise about, it would be helpful to better appreciate the three numbers. Aditya, I'll put it into two lenses. One is not a rejig, I will call it, but it is more of a resource reallocation for better optimization of the resources. Number two, in terms of growth element, since it's minus one, you can understand it's a minuscule degrowth. We are kind of flattish. This has also been corroborated with the fact that there were some adjustment post-GST rationalization, which is a great move by the government. And third is we were also looking at in terms of strategically whether we can reposition some of our brands so that we are able to drive better growth in the coming quarters. Got it. That was helpful. Thank you, Aditya. Thank you. The next question comes from the line of Sajal Kapoor with Anti-Fragile Thinking. Please go ahead. Yeah, thank you for taking my question. Good afternoon, team. Just a few questions from my side. First of all, hopefully that Q4 growth will be along the lines that we have been hoping and guiding for some time now. Assuming that we mean 10% when we say double digit, so I'm taking the lower end of that range of double digit. In that 10% assumption, what is our assumed industry growth rate? The assumption is currently the industry is going at roughly around 8%, and I expect Sajal the similar kind of trend to continue, so industry is expected to be around 7.5%-8.5%. We are expecting upward of 10% in the current quarter, so it's not at the lower end. We hope to be better with the numbers, Sajal. Sure, sure. And do we expect that number to be much more sustainable beyond the Q4? 100%, even better. Our idea, Sajal, at least what I'm aiming in the short term is 50% more than the industry growth. Okay, right, so fiscal 2027 should be a very good year given our low base currently, right? Yes. Okay. Understood, understood. Thank you for that. And what is our current confidence, Amrut and Manish, in terms of this much-needed improvement in the per capita or the field force productivity? Because we have been grappling with this for a while now. I understand the pain of this question, and I think that is the same pain point which we have. But as we grow organically, we are also looking at some product launches which are into high-growth territory with a better yield per patient. And hopefully, that should happen somewhere at the end of H1 in the coming financial year. And that should add to the volume and value increase, thereby increasing our per capita. Sure, sure. And Amrut, on this cash sitting on the books, it's well documented. It keeps increasing every quarter, which is good. 14-15 quarter cash getting added to the balance sheet on a quarterly basis is a fantastic thing for any company, especially given our size, the small size. But it's also diluting the ROE, right? So what is the capital allocation thinking going ahead? Are we seriously looking at something? Yeah, Sajal, we are always seriously looking at something, but the capital market is not supportive from an M&A perspective. Obviously, everyone gets much better valuation in the capital market than what in strategic buyout effort. So clearly, M&A is a very strong intent at our end, but a disciplined M&A, which is accretive for our shareholders and not dilutive. So that's very, very important for us. The market has not been supportive in terms of cost or price of acquisition. We did one Yash Pharma and have successfully demonstrated our ability to create value out of it. We continue to be on the lookout, but we cannot put in a timeframe to it. Having said that, if we are unable to use our cash efficiently, we would rather return it to the shareholders in the right format. Yeah, sure. Sure. And finally, a quick bookkeeping question for Neelam, perhaps. Depreciation has moved up significantly since March of 2024. The gross block has also significantly increased. Now, please can you refresh my memory in terms of what's driving this depreciation in a business that is largely asset-light with all the manufacturing being outsourced? Thank you. Yeah, that's correct. Depreciation has largely moved up because of, if you would have seen our balance sheet, there is an acquisition which we had done last year, Yash Pharma. And the assets are largely comprised of intangibles, trademarks, and all. And because of that, those are getting depreciated over the period, and hence the depreciation line has gone up. Right. So that's purely because of Yash Pharma and the intangibles, not the manufacturing assets? No, no. So we do not have a very large base of tangible assets. It's very small. The largest portion lies in the intangible assets. Tangible assets are only laptops, Sajal. Okay. Yeah, fair enough, Manish. And then so this in a way should only help our operating cash flow, right? It's a non-cash expense. Absolutely. Absolutely. Yeah, yeah. Okay, okay. Thank you. Thank you. Not only helps that, but also helps our tax planning in a way. Yes, yes, of course, Manish. Yeah. No, thank you for all the responses. Fingers crossed. We look forward to a much positive Q4. Thank you. Yes, please. Thank you, Sajal, for your positive pressure. Thank you. Yeah. The next question comes from the line of Pulavarthi Sai Kiran with Pulavarthi Advisors. Please go ahead. Yeah, hi. Thanks for taking my question. Sir, if we can just elaborate, you always mentioned that Yash Pharma is a... I'm sorry to interrupt, sir. Could you please use your handset? Yes, I am using my handset. Can you please come? Am I audible? Yeah. Yeah, please go ahead. Sorry. Hello. Yeah. So I'm just wondering, sir, if you always mentioned that Yash Pharma is a successful acquisition. Just curious, from your perspective, how do you define this success in terms of acquisition? What are the parameters based on which you evaluate on the hindsight basis this is a successful acquisition? So let me respond my way, and then Amrut can add from a business perspective. But looking at an investment lens, A, the business is among the fastest-growing businesses within our portfolio. B, the margins, which were about half of Jagsonpal Pharma at the time of acquisition, have been already aligned with our overall corporate margins. C, the business practices or the cash flow generation out of that business is also fully aligned with our own business. And finally, of course, the ROI. For the price that we invested at, we certainly have more than double-digit returns on our investments within the first year. So these were the three or four criteria we used to justify this acquisition. From a brand or any perspective, if we wish to ask a question. Of course. One more strategic angle I would give it. Probably added two therapeutic areas because JPL had very limited RPM, and that helped us expand our RPM and provide us additional growth engines. Understood, sir. Sir, my second question is that in terms of one of the earlier participants' question, you mentioned in terms of the capital allocation, one is an M&A, or you also mentioned that if you can't find anything, you will prefer or rather you will find a way to return to the shareholders. Do you foresee any other way of putting the cash to work to expand the existing business organically? I do understand that you follow the asset-light model, but do you foresee a scenario where you would like to put some cash to work in terms of expanding the distribution or maybe adding a few more therapeutic areas? Is that something which you would like to consider? Absolutely. That is part of the agenda. But clearly, our kind of business does not require that kind of cash. So while we will put some capital to risk in terms of additional growth engines within our portfolio, but the kind of cash generation we have, unless it is used for M&A, and M&A can take multiple shapes. It can be a brand acquisition, business acquisition, and/or a company acquisition. But come what may, I don't think we can burn cash disproportionately given the way we run. Amrut, if you would like to add something. Yeah, I mean, both the options are on the table. So we'll obviously deploy capital in the most meaningful way, which is EBITDA-accretive eventually. And also, we are seriously looking at some of the good acquisition candidates. Currently, the assets are very highly priced, so we are looking at something which will bring value to the shareholders. Thanks, sir. Thank you very much. Really appreciate it. Thank you very much. Thank you, Pulavarthi. Thank you. Participants, if you wish to ask a question, you may press star and one. The next question comes from the line of Pushkar with Milli Capital. Please go ahead. Hi, sir. Am I audible? Yes. Yeah. So, sir, I am tracking the company for the first time, probably. So I just wanted to know in this generic market, what second-order indicators, for example, doctor feedback or prescription trends, do you monitor to detect early signs of market share erosion? I have not understood your question completely, but if you're asking me what are the leading or lagging indicators for the market, I would say that... Yeah, like market share erosion. If there is some brand which there are early signs of market share erosion in that specific brand, what are the leading indicators that we monitor? One would be, of course, what we get in terms of the market research reports, which are kind of custom-built for the organization many times. And then there are subscription models which are also available, which we do, and which will be early indicators for us. However, the report only comes post hoc. So that means it is a stockist-out data which gets released maybe a week after the month ends. But that gives a guiding idea in terms of where the market is heading. Right, right. And then if there is a market share loss in some of the brands, then there are corrective actions or maybe instant usage to sales force, etc. Correct. Okay, okay. Thanks, sir. Yeah. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question comes from the line of Priyasha, an individual investor. Please go ahead. Hello. I think the big question was, what is the current MR productivity and how do you plan to further increase the stockist support brand per doctor? You'll have to repeat the question. We couldn't hear you at all. Sorry. What is the current MR productivity and how do you plan to further increase the doctor support brands per doctor? So I will shoot two answers to the two pronged questions. In terms of productivity, we are a little less than our peer group, which we are trying to build up. And once we reach there, actually, our growth will be automatically driven towards higher double digits, which we are trying to do. Second piece is, obviously, this growth has to come from two ways. Either we increase our prescriber base or we increase P/ D, which is prescription per doctor, whether it is in terms of absolute number of prescriptions increasing for one individual brand or number of brands increasing per doctor. So we are working on both the pyramids and hope to see that the picture turns deep green soon enough. Okay. Thank you. Thank you so much. Thank you. Thank you. The next question is a follow-up question. It's from the line of Aditya Chheda with InCred Asset Management. Please go ahead. Hi. So apart from the internal calibration, would you attribute any other reasons for growth lower than your earlier expectations in 2026? Aditya, I think the industry itself is kind of flattish. Other than the new products and the price growth, it has been muted. So if you look at the recent past of maybe three or four quarters, you will find that the volume is hardly into a very, very low single digit, either 1%, 1.5%, or maximum 2%. Even the recent report is alluding to the same. I think there are two kinds of shifts which are happening, which I am making an assumption here. One is there is a good amount of government spending and therefore a lot of government purchases are happening, which is mostly of the brands which are eating into the private practice market. Second is the generics are also growing equally as the branded pharma, right? And also there is a theory that combination brands prescriptions from the doctors are increasing, and thereby per prescription number of brands are getting reduced. So doctors are prescribing more of combination brands, and this I am alluding to you with the data point. So combination brands are increasing in India vis-à-vis a single molecule prescription. So therefore the volume growth looks muted. Thank you, sir. That was helpful. Thank you. A reminder to all participants that you may press star and one to ask a question. The next question comes from the line of Dinesh with White Oak. Please go ahead. Yeah. Hi, Manish. Sorry, I was not there for the entire call, so you might have, I'm sure, you've answered this, but what exactly is the reason for the lower growth in the last two quarters? Dinesh, I think I would like to. I mean, we have two consecutive quarters of slow growth. One was certainly impacted by GST, as I covered in my opening remarks, and the second one, again, or the current one, has been lower than expectations, our own worst expectations, partly driven by, again, internal factors because we have, I mean, with Amrut joining us, he has initiated certain critical actions which are going to be, I mean, kind of impacted growth for short-term, but with a long-term intent of course correcting in terms of driving long-term growth. But anything you'd like to add? Yeah. I think, I mean, Manish has largely covered those two points, so we are looking at more of strategic alignment towards our strength, and there is also kind of resource reallocation of the product, the brand priority, as well as the people priority. Yeah. So if you can maybe simplify it further, have you let go of some long-tail brands? And GST also, we're not seeing it, at least not all companies are reported yet, but the companies that are reported this quarter, they're seeing good reported growth. So, is our GST distribution very different from the distribution of other large pharma companies because we are not seeing, at least for the companies that are reported, the slowdown being attributed to GST? So both the two things, if you can tell. I have not seen those reports so far, the two reports which have come out. Possibly, I will read much in detail. But frankly speaking, there had been an inventory correction in the market at the time of GST implementation, and thereby the primary sales have certainly got impacted. However, for us as well as the industry, I don't think much of secondary got impacted or the tertiary demand got impacted. So there had been this temporary pause, I will say, in terms of growth momentum which was there. But as Manish had said in the opening remark, that this is already behind for the industry and things are normalized from the last quarter. And hopefully, from this quarter, you will see a good growth happening for the business. What did you mean when you said there is restructuring? So there are certain tail brands that you have let go of, or what exactly has you think? Just elaborate on what you've done, what you're doing? Yeah. Towards the health of the organization, you would always like to bet on the winning horses and make your strength more stronger. So obviously, there has been a rationalization of some of the SKUs which were eating into the deployment of the capital because versus our sales, if you compare the batch size, we were sitting with more of the cash blocked on the books rather than getting it sold and liquidated from the market. So we have rationalized some of the very, very small SKUs. However, the focus is now largely on the large brands to be built. Okay. So what percentage of the revenue have you let go of? In terms of revenue, I won't be having off-the-cuff number, but it will be a small number, maybe around 1.5%-2% of the value of the top line. All right. Okay. Thank you so much. Thank you. Thank you. Thanks, Dinesh. Thank you. Participants, if you wish to ask a question, you may press star and one. If there are no further questions, can we come to then? Yes, sir. There are no further questions. You can go ahead with your closing comments. Thank you all participants for your valuable questions and engagement today. We appreciate your interest in Jagsonpal Pharmaceuticals. Should you have any further queries or any requirement of additional information, please do not hesitate to contact our IR team at Go India Advisors. We remain committed to engaging with all of you, fostering transparent communication as we continue advancing our objectives of creating value for our stakeholders. Thank you once again for your participation and wishing you a good evening today. Thank you. Thank you. On behalf of Go India Advisors, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.