Ladies and gentlemen, good day and welcome to Strides Pharma Science Limited Q2 and FY 2026 earnings conference call. As a reminder, all participants in line 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 this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. I now hand the conference over to Mr. Abhishek. Thank you, and over to you, sir. Very good evening, and thank you for joining us today for Strides' earnings call for the second quarter and half-year ended financial year 2026. Today, we have with us Badree, Managing Director and Group CEO, Arun Kumar, Executive Director, and Vikesh Kumar, Group CFO, to share the highlights of the business and financials for the quarter. I hope you've gone through our results release and the quarterly investor presentation that have been uploaded on our website as well as the stock exchange website. The transcript for this call will be available in a week's time on the company's website. Please note that today's discussion may be forward-looking in nature and must be viewed in relation to the risks pertaining to our business. After the end of this call, in case you have any further questions, please feel free to reach out to the investor relations team. I now hand over the call to Mr. Badree to make his opening comments. Thank you, Abhishek. Good morning, good afternoon, and good evening to all who are joining in this call. We are extremely happy with the results. The performance demonstrates our consistent execution as we invest in sustainable long-term growth. I'll cover this presentation and cover my speech in two parts. I'll focus on all the growth metrics on the business. Group CFO Vikesh will cover all the metrics relating to the efficiency as well as the profitability. I also will speak about some qualitative aspects of the key businesses which we have. In the end, we'll take all the questions that have to be answered. From our perspective, Q2 has been very strong for us. Our revenue grew by 4.6% year-on-year. Gross margins are 14.6%, 14.6% growth. EBITDA grew by 25.4%, and operational PAT at 84%. All we want to say is that consistency and sustainable growth has helped us to create the operating leverage, and the multiplier effect is very clearly seen from our results. A 4.6% increase in revenue growth resulted in almost 3x increase in gross margin growth, almost 5x to 6x increase in the EBITDA growth, and almost 20x increase in the operational PAT. This is based on the quarterly performance. As far as the yearly performance is concerned, the revenue grew by 5.5%, gross margin at 13.2%, and EBITDA at 20% growth for the full first half, and operational PAT at 82.6%. Again, the complete operating leverage is visible in the entire P&L. Overall, if you really see from a U.S. market, I'll go market- by- market now. The U.S. market at $73 million grew 2% year-on-year. There has been intense competition in recent launches. This is despite the competition we have grown 2% year-on-year. We also launched three products in H1 FY 2026, and the total number of commercialized products stood at 70. We continue to rank top three in 37 products, and we added one more product to this list, which contributes almost 75% of our U.S. revenue. We are given a long-term outlook to the street in terms of the $400 million by FY 2028. We are continuing to focus on that and continue to execute based on that plan. We have about 230+ ANDAs filed and 215+ ANDAs approved as of July. The company has invested in new segments of controlled substances, and we are spending the new R&D on all those programs which are beyond $400 million. I also want to cover some of the key points with respect to the U.S. business and the philosophy of the company in growing that business. As far as the U.S. business is concerned, our strength has been on the timing of the launch. We wait for the market to get disrupted, and we launch it at the appropriate time. The second thing is in terms of the service levels. Our service levels continue to enjoy a very premium position as far as the U.S. generic suppliers are concerned. We are able to maintain the service levels at a very high level, which also creates a lot of stickiness as far as the business is concerned. Our business discipline also has been in terms of focused discipline on the entire capital allocation. We are focused on programs which are beyond the $400 million, and we are starting to invest now. Profitability has been the focus. You see, the first quarter, we also dropped a few products from commercialization because we did not meet our profitability threshold. We are continuing to focus on the profitability as we go forward. Our in-U.S. for U.S. strategy has played out quite well with the Chestnut Ridge plant. They're delivering good outcomes for us. In terms of the overall context of the external environment in terms of tariffs and all of that, almost 1/3 of the revenue comes from U.S. The company continues to focus on execution and also supply chain efficiencies. This is what has led us to have very consistent performance in the U.S. in the last six quarters. As far as the other regulated markets are concerned, we are extremely happy with the progress of other regulated markets. As you know, the other regulated markets are difficult to operate, and given that each market has got a different regulatory pathway, making it a very high entry barrier. We are able to see green shoots in these markets. As has been reiterated in the past, the rest of the world market, which we call another regulated market plus the growth markets, have registered a very strong growth at 14%. With other regulated markets, it's almost about 16% year-on-year. There are a number of markets which the company is focused on, which have either got a B2B market, B2C across all geographies, which are in various stages of evolution. If you go back and see the last six quarters, the growth has been quite muted. The last two quarters, we have grown almost about 14 to 15% in these markets. We believe that all pivots are in place, and it has formed a new base, and we should be able to launch from now on. Overall, if you really see, we are very happy with the 15%, 14% growth, including the other regulated markets and the growth markets, and 16% in the other regulated markets. We believe that the new dollars will come from these markets as we start to increase our regulatory efforts. Our long-term objective of mirroring the U.S. market in the next 2-3 years' time remains intact. We believe that we have got all pivots in place to grow from here on. We are pleased with the base that has formed, and you will start to see the accelerated growth in these markets. Coming to the other regulated markets, we had a 16% year-on-year growth, and the deep momentum continues in Europe with large EU partners being onboarded. Onboarding a partner takes time, and we have already started to see green shoots in these markets. As far as the U.K. markets and other markets are concerned, it's very steady, and it has formed a new base, and we are confident of good growth in the near term. The portfolio maximization and the portfolio build-up in the last six quarters and the investments which have been made on various programs has resulted in this growth. As far as the growth markets are concerned, the growth markets revenue at $17 million grew 7% year-on-year. When we say growth markets, this consists of new markets where the new dollars are expected to come in the near future. Our Africa has done very, very well in this quarter. We are also starting to invest our regulatory efforts on the growth markets. A number of filings are being done. We should be able to see a substantial growth beyond FY 2028 in these markets. All the work is in progress, and we should be able to see a new amount of dollars coming in beyond FY 2027, FY 2028 in these markets, for which all pivots are in place, products are in place, regulatory strategy is in place, and the go-to-market is also being planned out. As far as the access markets are concerned, we know that it's very lumpy, and donor funding environment continues to remain challenging. It's very opportunistic for us, and it will continue to be lumpy. We believe the second half should be slightly better than the first half, but again, it has to be seen over the next two quarters how it pans out. It all depends on the donor agencies' decisions at that point of time. Overall, if you really see, we are very pleased with the entire results. We are focusing on long-term growth. We are also focusing on EPS growth. We believe that all the pivots are in place for us from a long-run perspective and to make the company extremely valuable in the near future. With this, I will hand it over to Vikesh to cover the profitability and the efficiency metrics that have gone into the results. Then we'll open the floor for questions from the management side. Thank you, and I'll hand it over to Vikesh. Thank you, Badree. Good morning, good afternoon, and good evening to all of you. As Badree mentioned, it's very pleasing to report yet another strong quarterly performance. Our performance has been exceptional across metrics of profitability, efficiency, and growth. I will start with the profitability metrics. First, I'll focus on the gross margins. Our gross margins for the quarter are at INR 706 crores. It's a INR 90-crore increase from what we reported in Q2 of FY 2025, with a gross margin percentage of 57.8%. It's a 500 basis points improvement from our gross margins last year. For H1, our gross margins are at INR 1,381 crores, with a gross margin percentage of 59%. Even for H1, our gross margins have improved by 410 basis points over H1 of last year. Coming to EBITDA, we are reporting a very strong EBITDA of INR 232 crores for the quarter, with EBITDA margin of 19%. As Badree already mentioned, it's a 25% EBITDA growth year-on-year. For H1, we are reporting a INR 450-crore EBITDA with an EBITDA margin of 19.2%. The EBITDA margin has also moved from 15.8% to 19% in Q2. That's a 320 basis points improvement for the quarter. Similarly, for H1, at 19.2%, we've improved by 230 basis points over H1 of last year. Coming to the operational PAT, our operational PAT for the quarter is at INR 140 crores. INR 140 crores is the highest-ever operational PAT that we've reported in a quarter. It's an exceptional performance from a PAT perspective, and an operational EPS at 15.2 is, again, our highest-ever quarterly EPS. For H1, our operational PAT is at INR 254 crores with an operational EPS of INR 27.6. Our reported PAT for the quarter is at INR 132 crores, and our reported PAT for H1 is at INR 237 crores. All in all, if you look at all the profitability metrics, you can see the multiplier effect flowing in, and the EBITDA- to- operating PAT conversion is also at a very healthy 57%. Focusing on a couple of other line items of the P&L, our operating costs have remained steady in line with previous quarters at 39% of sales, which is also visible in the EBITDA margin expansion. Our gross finance costs continue to improve. For the quarter, our gross finance costs are at INR 46 crores. Our net finance costs for the quarter are significantly better at INR 20 crores due to finance income that we reported in this quarter. For H1, our net finance costs are at INR 61 crores, which is significantly lower than the INR 105 crores of net finance costs we reported for H1 of last year. We expect our gross finance costs to continue to improve while the net finance costs for H2 may slightly go up due to the income that we've had in H1. Our ETR for Q2 and for H1 has been around 15%, and we expect it to be in the range of 15% to 20% for the year. Moving to the efficiency metrics, I'll start with the operational cash. We are reporting an operational cash of INR 394 crore for H1, which is about an 87% of EBITDA- to- operational cash conversion. This strong operational cash has helped us deliver a free cash of INR 73 crore, which we have used for debt reduction. Our net debt at the end of Q2 stands at INR 1,449 crore. We were also adversely impacted by forex on our net debt. That impact was almost INR 71 crore. Despite this impact, we were able to reduce our net debt by INR 73 crore, and consequently, our EBITDA- to- net debt ratio is now at 1.65x, improving from 1.9x that we reported at the end of March. We have also invested significantly in CapEx. Our investments in CapEx for H1 are at INR 149 crore. In addition to maintenance CapEx, we've also made investments for growth, including acquisitions of intangibles for future growth. Our cash-to-cash cycle remains steady at 113 days. We've improved by three days quarter- on- quarter, and our ROCE has now improved to 16% compared to 14.9% in March 2025. Our ROCE does not include both our capital employed and our ROCE does not include the investments in OneSource, which is currently valued at INR 339 crore. This INR 339 crore is also not adjusted in our net debt and EBITDA- to- net debt ratios. Overall, it has been a comprehensive performance across metrics, and that is clearly visible both in profitability and the strength of our balance sheet. We hope to continue and sustain this momentum as we focus on our growth levers for the future. Thank you, and we can now open up for questions. Panish, you can take the Q&A, please. Thank you, sir. Thank you very much, ladies and gentlemen. We'll now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use headsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. The first question comes from the line of Anand Mundra from SoarWealth. Please go ahead. Hello, good evening, sir. Sir, my question is with respect to other regulated markets. It has been strong this quarter. What are the key drivers, is this growth sustainable, and is it okay? Please go ahead. Please go ahead. Yeah. Is it fair to assume that other regulated markets should grow faster than U.S. going forward? These are the questions regarding other regulated markets. Yes. As far as the other regulated markets, I'll put it like this. One is in terms of the rest of the world markets, you have to look at it as a bucket: other regulated markets plus the growth markets minus the access markets. If you really see this quarter, we have reached an important threshold of INR 10.3 billion. That is INR 1,000 crore we recrossed in this market. If you really see the trajectory of the last six quarters, this market has been performing in various geographies. This is the first time we have just broken that trend. We believe that this is very sustainable in the future. Our long-term objective of mirroring the U.S. market in the next 2,3 years, and with the other regulated, I would say I'll call it as rest of the world markets, which consists of, again, other regulated markets and the growth markets minus the access markets, we believe that we can mirror the U.S. market in 3 years' time from now. We have got enough pivots in place. You You should not look at it from quarter to quarter. Over the period of 3 years, I think we should be able to get there. Okay. Sir, if I look at the U.S. market, it has been flat for the last six, seven quarters. Not for one, two quarters, but we have come back to the same level of what we were doing eight quarters back. Yeah. If you really see, we have also specifically said that as far as the U.S. market is concerned, there has been some intense competition in certain select molecules. If you really see the entire buildup of the U.S. market, we are focused on profitability, and we are focused on various other metrics which are outside the. We are also focusing on a number of metrics. We believe that the long term is intact. As far as we are concerned, we are focusing on long term. We are focusing on value more than the quarter-on-quarter trend. We believe that we have got enough products as well as these strategies in place to get there in the next 2.5 years- 3 years' time frame. Yeah. Badree, just one point I would want to add. Specifically on the U.S. market, in Q1 of FY 2025, we had reported roughly about $65 million, $66 million in terms of revenue. Over the last five quarters, we've been upwards of $70 million. It is a very calibrated approach that we focus on profitability rather than revenue growth, and you will see that, be it in U.S. or in other regulated markets. Other regulated markets, historically, for many quarters, we were at $40 million, and now we've stepped up to that $44 million range, and we expect to remain there. Similarly, for U.S., four quarters back, we had stepped up from $65 million to $70+ million, and we have steadied in that range despite the competition that has been there on certain molecules. We have been able to maintain and grow revenues. Our focus continues to remain on profitability rather than chasing revenue growth. Understood, sir. The second question is with respect to profitability only. It is largely driven by increase in our gross margin. This 58%- 60% gross margin, is this sustainable, sir, given the rising competitive intensity in the U.S.? Yes. Yeah. Yes, we have remained in that range for the last four quarters. This is helpful, sir. The third question with respect to our other income, which is INR 18.5 crore, this is being reported as a part of finance costs we have reduced. What is this related to, sir? This is related to interest on certain refunds that we've got. Largely, we've seen this income coming in year-on-year. It is more a timing of the income rather than that. The way we are looking at it is net finance cost for H1 is at about INR 61 crore. With this level of income not repeating in H2, it may slightly go up. Overall, we've seen our gross finance cost coming down quarter on quarter for the last many quarters. On a rounded basis, it's fair to assume INR 40 crore, sir? It should be less than that. Okay. Thank you, sir. Thanks a lot. Thank you. Thank you. Our next question comes from the line of Akash Jain from MoneyCurves Analytics. Please go ahead. Thank you. I think it has been an extremely positive surprise on margins, and I think the management teams should get full accolades for that. I just want to also understand a little bit on, is there an interplay between margins and revenue growth? I think a little bit of that you referred to earlier. For example, are we forgoing or are we stopping, reducing some revenues to improve profitability? Just to understand a little bit on, are we, is some of this margin also coming at the cost of revenue? Because the margins look great, but revenue has been, obviously, the trajectory has been lower than what we had expected and what we had guided earlier. Just a little bit qualitative and quantitative aspect of what is happening on revenue growth versus trying to manage and try to grow margins. Yeah. I will take this. If you look at the EBITDA, while the margin has been healthy, even the absolute growth in EBITDA and profits has been healthier, which is where you also see the multiplier effect right at EBITDA and at PAT. The focus is both on absolute profit growth and margin growth. What we are saying is we don't want to, we want to take in revenues that either meet our strategic margin thresholds in terms of profitability, or they should help our under-recoveries, which helps in improving our operating leverage. That philosophy has played out. We don't want to do loss leaders or chase extremely low margin products just for the sake of revenue. It's a very calibrated approach. We've achieved leadership positions in the products that we sell, and we want to maintain that niche. We have said that we will launch 60 products in the U.S. in the next 3 years. I think if you look at actual, the number has been significantly lower than the run rate that is required. I'm just trying to understand, in the light of the fact that you have said that the target for doubling U.S. revenues, sorry, the target for revenue growth in U.S. remains intact in terms of what you had guided earlier. How do I understand the both together in terms of filings and approvals versus revenue growth versus what we are seeing actually in H1? If you follow our historical trends as well, it has been a very calibrated approach in terms of launch. We don't launch products as soon as we get approvals. We wait for the right timing, both in terms of pricing and market. We prepare ourselves and make sure that when we launch, we launch it at a very profitable and at a very stable level. That strategy has really played out well for us. We continue to remain focused on that. Given that we've got the pipeline, we've got the products. From a long-term standpoint, we see that to be intact, which is what we continue to mention. While there were some near-term headwinds, our long term remains intact. Okay, thank you. Thank you. Thank you. Our next question comes from the line of Amresh Kumar from Geosphere Capital. Please go ahead. Congratulations on a very strong set of numbers. The first question would be on our Beyond Generics. We had launched our nasal spray. Is there any update on that in this quarter? We have already. The second question. Yeah, we have already filed for the one product, and we expect to file a few more in the next 12 months. Okay. The second question is on the balance sheet. It was heartening to see that the debt coming down with the free cash flow this first half. Do we foresee some more debt reduction going forward, and some reduction in further finance cost? Gross finance cost? We will continue to focus on profitability and efficiency. We expect finance costs to come down. From a free cash generation, whatever free cash we generate, our aim will be to reduce that. Okay. Sir, delivering on the same points of the previous two speakers, our run rate is about $300 million in the U.S. currently, more or less. This rate was increasing very fast by about 25% till about a year back. We are still maintaining that we will go from the current $300 million to $400 million by FY 2028. Are we going to see some step-up jump, or will we see a gradual increase from here? Yeah. It will be very steady. That's all we can say that in the next 2.5 years, we should be able to get there, is our hope. Of course, external events are there. We have to watch out, and we want to take step by step. The most important thing is we are focused on sustainability of that revenue or sustainability of that target. That's important for us and as a company. That's what we are focusing on. Got it, sir. Got it. Okay. Thank you so much. Congratulations once again on a very strong set of numbers. Thank you so much. Thank you. Thank you, sir. Our next question comes from the line of Krishna Mehta, an individual investor. Please go ahead. Hi, sir. On our CapEx intensity, it has increased to INR 149 crore in H1 FY 2026. Could you highlight the major areas of investment, and what will be our incremental spend in H2 F 20Y26 and FY 2027? I already touched upon the CapEx spends. It has gone towards maintenance CapEx as well as for future growth, including certain investments for intangibles that we have done. We expect to maintain it at similar levels for H2. Thank you, sir. Thank you. Our next question comes from the line of Rupesh Tatiya from Long Equity Partners. Please go ahead. Yeah. Hi, Badree. Hi, Vikesh. Congratulations on a fantastic set of numbers. I have a few questions. First question, Vikesh, I reported the PAT is INR 131 crore. Operational PAT, you said in presentation, is INR 140 crore. Can you give some reconciliation, maybe line by line? Also, this INR 71 crore adverse currency impact, what portion of that is routed through P&L? The difference between the operational PAT and reported PAT is just the exceptional items. These are expenses related to past events that are incurred in the quarter and are not relating to the performance for the quarter. That is the exceptional also. It's just one item that's a reconciliation item. These are like one-offs, basically? Yeah, these are one-offs. This INR 71 crore, what has the. In terms of the INR 71 crores, that is the balance sheet position as of the date. If you look at the average rate versus the closing rate, the closing rate is much higher than the average rate. The exchange does not flow through in the P&L, whereas from a balance sheet standpoint, it gets restated by the end of the quarter rate. There is some portion of that that would have flown through the P&L, but what happens is the impact in the P&L comes with a lag. Okay. Whereas the balance sheet is immediate. The balance sheet is immediate because it is as of that date. Okay. Understood. Second question, Badree, is where are we on the controlled substances execution? I think in one of the investor conferences, I think hosted by ANTI, you said we can hit $25 million near term. What is near term? Have you figured out how the quotas work? Have you launched the products? Some color, qualitative and quantitative around that would be very helpful. Yeah. As far as the controlled substances are concerned, this is the first full year of execution. Last year, we had some approvals of a few products. This year also, we have launched one or two products in the controlled substances space. This is a business which we are seeding in, and we are also working very hard to execute it much better. The full impact of the controlled substances will be seen only from the next year onwards. I'll put it that way because there are lead times which happen between the quota allocation, purchase of API, manufacturing, and then selling. All of this will be a very good investment year where we understand the entire various legs of the controlled substances, and we should see the full impact of that in the next year. Just one clarification, Badree, we have 15, 16, and thus, and the $3 million, $4 million per product kind of. No, no. Revenue realization? No, I don't think so. That is right. Overall, as controlled substances as a bracket, if you really see if you're able to get to the full potential, it will be slightly meaningful in the coming years. Okay. Final question, Badree, Q4 exit on that, U.S. $80 million, other regulated market $50 million. Is that good? Does it have good probability that we will get there by Q4? We don't want to make any forward-looking statements within the year. All I can say is. Let me ask you another way. What is the risk to those numbers? That $400 million over a 3-year period, we should look at us long-term. Quarterly, there can be here and there. It all depends on the market. All I can say is that our aim is to grow. If you see the other regulated markets, it is other regulated, when I say rest of the world markets, which includes other regulated markets plus growth markets minus the access markets, have reached a $10 billion mark. There is 1,000 growths. When we see all of that, we should see it as a basket. The most important thing for us is to grow wherever the opportunity is. That's what we are trying to focus on, not losing sight of the long term, what we have kept for ourselves. Okay. Just final clarification. Historically, H2 has been better than H1. Mr. Tatiya, I'm really sorry to interrupt you. I request you please listen to this question. It's a very simple question. I'm sorry. It's just a very simple question. Hi, Badree. Hello? Yeah, please go ahead. Yeah. Historically, H2 has been better than H1. Nothing changes this year as well, right? That's correct. Yeah, okay. Thank you. Thank you, sir. Our next question comes from the line of Pratik Kothari from Unique PMS. Please go ahead. Yes, hi. Good evening and thank you. Sir, one question on competition. Last quarter, we had called out some intense pricing pressure in the U.K. This quarter, we are talking about, I mean, in the presentation, we have spoken about US. We have, I think, discontinued 56 products in the first half. Just across two markets, anything to read into it, how to look at it. Is it. Is it just one-off, some products coming in? Is this some intense increased competition that we saw 3, 4 years back? Some color, please. Pratik, just to give you clarity on this, see, the competition is something which no company has got control of, right? From our perspective, at the end of the day, you have to look at it as a portfolio. Some you will gain, some you will lose, right? From that perspective, if you really see, there is definitely some competition in the marketplace. What is more important for us to focus on is how we are ahead of the competition. That's what the company is working on. The most important thing is we don't want to compromise the profitability of the company at the cost of top-line growth. That has been the philosophy all throughout. If you really see that this year, this quarter, we have added one more product to one more to the 37 out of 70 products are at a market-leading position. It is a trade-off between the competition and the profitability as well as what you want to do as a company. Our disciplined execution has really helped us to get here. I think that is the right way to look at us. We don't want to be looked at for every quarter in terms of ups and downs. Overall, what we are chasing is something which is very value-driven than the volume or the price-driven. Actually, the point that I was coming from was because it happened over two quarters, two geographies, and hence the question, right? I mean, is it just some product-specific? I mean, is it just the number of players fighting has gone up, or maybe last 2 years were good for U.S. generic market, and now someone's taking price hike or market share at cost of pricing? I mean, obviously, we're too soon to call out any trend, but basically, what you're saying is you're not on correct. There is no specific trend. All I am saying is competition will come and go. What Strides will do is to how to stay ahead of the competition is what we are focusing on. Quarter- on- quarter is something which we should not even look at. From a long-term perspective, I think we have got enough strategies in place and will continue to execute on our strength, which will give us all the value which we are chasing. Pointed out. Sir, second. R&D, we got to double our R&D spend from $10 million last year to $20 million. I mean, is that run rate already hitting our P&L? Have we ramped that up? Yes. We said that it will be between $15 million to $20 million, and we are on track to spend that. R&D expenses. Fair enough. Earlier, Vikesh mentioned about this spend on intangibles, and that is what we see in the balance sheet. Intangibles have gone up by about INR 100 crore. If you can just highlight, this is just a few registrations, etc., or if you can highlight the nature of these intangibles. Vikesh, you would like to take that? Yeah. It is a few intangibles, a few ANDAs that we have acquired, and it is for near to medium-term growth. It is in the INR 100 crore. It is a combination of the acquisition as well as exchange rate impact because exchange has also moved significantly in the last 6 months. That will also impact when you compare year-on-year numbers. Thank you, Mr. Kothari. Please rejoin the queue if you have more questions. Thank you. Thank you. Our next question comes from the line of Nitin Agarwal from DAM Capital. Please go ahead. Thanks. Badree, congratulations on our team for a very good performance. Just one question on the R&D. Now, R&D, the $15 million, $20 million that we're looking to spend, are there any particular areas that you're going to be focusing on more that you can highlight? We have said that we'll be focusing on nasal sprays and the Beyond Generics. There are certain specific domains we have identified within. It's early days, but we are committed to focus on that. Nasal sprays is one thing, something which we need to call out at this point of time. Okay. Secondly, Vikesh, on the CapEx, this year is about INR 300 crore or thereabouts. Is this a run rate we should work with on these future years also? Our maintenance CapEx is going to be between INR 100 to 150 crore. The rest is more quarterly driven rather than being a trend. It is more event-driven, is what I would say. Okay. Lastly, on the overheads, I think we've done a pretty commendable job in terms of setting out, creating operating leverage on the overheads over the last few quarters. Do you still see opportunities to create more operating leverage on the overhead part of the business, overheads going forward? We still have some level of under-recoveries across our plants, and that is where we have focused on to get in the incremental revenues without the need to spend in new operating costs. There is surely some legs that are left as far as the operating leverage is concerned. Okay, sure. Thank you so much. Thank you, sir. Our next question comes from the line of Siddhartha Bhattacharya from Authum Investment. Please go ahead. Hi, am I audible? Yes. Yes. Yeah, a couple of questions. First, I wanted to understand about the gross margin expansion. How structural is that? Is that a function of the product mix that we did during this quarter or the first half? If you could throw some light on that. It is fairly structural. I mean, if you look at the last six quarters, we've been in that range and expanding in a very calibrated manner. H1 FY 2025, we were at 55%. H1 FY 2026, we are at 59%. Q3, Q4 of last year, we were at 58%. It is in line, and it has got to do with the discipline that we follow across markets in terms of how we onboard new businesses. Okay. The second question I have is that H1- to- H1, if I look at numbers, your gross margin increase has not really translated into corresponding EBITDA increase, which tells me that there is some variable cost that has grown much faster than the gross margin increase. Going ahead, you think that will sort of taper down and lead to EBITDA expansion in the coming quarters? Yes. If you see Q1 of last year, the expenses were significantly lower, the revenue was lower. From Q2 onwards, that is where the year-on-year difference you're able to see is much more starker. When you look at Q3, Q4, the last four quarters, it has been fairly in a very steady range. Okay. Got that. Thank you so much. Thank you. Our next question comes from the line of Sarvesh Gupta from Maximal Capital. Please go ahead. Hi, team, and congratulations on a steady set of numbers. First question is on the tariffs. Now that we have seen one month post-tariff in the quarter gone by and one month in this quarter, can you throw some color on the impact of the tariffs that we are seeing on our business? Currently, there is no impact. We continue to watch the external developments, and things are changing every day. At least some clarity has come in that the tariffs is not going to be there in the near term. It's as good as news every day, right? We have to watch out. So far, there has been no impact for us for same goes for pharmaceuticals. Understood. You said that the other regulated market business would mirror U.S. business. The U.S. business itself, on a quarterly run rate, can grow to maybe $100 million in another 2, 3 years. Do we mean that the other regulated business will also reach that level in that timeframe, thereby increasing by almost 2.5x? Yeah. I just want to make a small correction in what you said. When you said that U.S. market, we have got a plan to go to $400 million. I named. Other than U.S., which I call it as rest of the world, which consists of both other regulated markets and the growth markets, reached at INR 10.3 billion, INR 1,030 crore, which is the first time we are crossing INR 1,000 crore in that market. That's growing steadily at about 14% on a first half for the last two quarters. If you keep up the same trajectory, we should be able to mirror the market, the U.S. market, in the next 2, 3 years from now. That's the thing I said. You have to, I didn't say other regulated markets, other regulated markets plus growth markets, minus. Plus growth markets. That's it. That should also reach a run rate of $100 million in 2, 3 years? Yeah, that is what is our plan. Again, that's a long-term aspiration. When it will happen, we don't know, but we are working towards it. With the growth, whatever trajectory that is there, we believe that it can catch up. Thank you. Finally, on the expensed-out things versus capitalized, you have $15 million, $20 million of R&D that you mentioned. You have a maintenance CapEx of INR 100 crore to INR 150 crore, and you have filing-related intangible expenses, I think. How much of these items are going through the P&L, and how much is going to get capitalized, and under what timeframe? Everything that we spend internally, except for the filing fees, goes through the P&L. Anything that is bought out is what goes through the balance sheet. Are these R&D expense and maintenance CapEx going through the P&L? Maintenance CapEx is for the factories. Okay. The R&D? That is not pertinent to R&D. The R&D expense of $15 million, $20 million? Is already in the P&L, in the reported numbers. Okay. Thank you. All the best. Thank you. Thank you. Thank you, sir. Our next question comes from the line of Kiran Dee from Table Free Capital. Please go ahead. Hi. Congratulations, sir, on a very good set of numbers. A couple of questions. One, we are talking about $400 million in the U.S., maybe $200 million, $220 million just in ORM. ORM plus growth market is $400 million. I'm thinking ORM will be somewhere around $200 million, $250 million. Again, not asking for a quarter to quarter, but at least from a run rate perspective, we should at least start hitting $80 million, $85 million, $90 million in the U.S. and probably $50 million in other regulated markets. Do you see this happening in FY 2027? Again, not for a particular quarter, but at least some run rate growth that we have to see to reach $400 million, right? It will not suddenly jump to $400 million. Yeah. Just to reiterate, this is an aspirational goal, right? We are starting to see growth. All we are saying is that the last six quarters of market formation has resulted in a growth for the rest of the world markets, excluding access markets. We believe that if you are able to grow in the same trajectory, we should be able to mirror that market in the next two years. That's what we are expeditiously working on. You will see the narrowing as we go along from quarter to quarter between the U.S. and the rest of the world markets, which includes both the other regulated markets and the growth markets. My question essentially was, we should see some run rate increasing, right? At least in the U.S. markets to 80, 85. Growth markets, not growth market, but at least the ORM markets to 48, 50. I am asking, is that run rate that we're going to see in FY 2027, that 80, 85 kind of run rate in U.S. and 45, 50 in ORM next year? Yes. I don't want to get into specifics on how you are thinking in terms of modeling. All I can say is, if I have to mirror the markets in 2, 3 years, all of what you said is true. Got it, sir. Second question, sir. In terms of nasal sprays, we said we'll launch one nasal spray. Most of our nasal sprays are going. R&D is also going around majorly in nasal sprays. Is there any particular therapy area, sir? Because some industry players do INR 1,000 crore molecule in a single product, right, in nasal sprays. Just wanted to understand if there's any therapy area that we can talk about. No, we are not going to specifically talk about any therapy play. All we are saying is that we filed one product. We are in the process of filing a few more in the next 12 months. Once we get an approval, we'll have to look at launch. At least it is about 18 months to 24 months away from the current date. Kiran, sir, please rejoin the queue for more questions. Thank you. Our next question comes from the line of Chirag Shah from White Pine Investment Management. Thank you. Please go ahead. Yeah. Thanks for this opportunity and congrats for a good set of numbers. Sir, three questions. First question is on currency. What is our average hedge duration? When will we see these benefits of stock INR depreciation in P&L? That's one. Second, on this intangible or ANDA that you have, if you can give more color on that in terms of number or what kind of opportunity size it will target if everything plays to the playbook? Third was on the U.S. competition, in general or in general competition that we see. If you can just give us a color, how should one look at it? Simply because we all have a refreshed memory of competitive intensity after COVID, which lasted very long. If you go back into the history, generally, is this competition a short-term one to two-quarter event, and how intense generally tends to be? Yeah. Thanks, Chirag. On the currency, I did not follow your question. I will repeat it. I think you indicated a reasonable amount of hedge loss. Accounting hedge loss when I say hedge loss, given the currency movement. What is the duration of our current outstanding hedges, and from when can we see the benefit of current INR rates, for example? We are seeing the benefit of the current INR rates. You should also appreciate that we have a large part of our operations outside of India, where there are costs that are in USD. Largely, the way we really focus on is that on a net basis, the currency impact benefit flows through, and we see that flowing through in terms of the P&L. The impact on the balance sheet comes in when the depreciation is far steeper than what it is during the course of the period where the currency benefits come, with a lag over subsequent quarters if the currency rate stays. If the currency rate stays, that benefit should flow through over the next few quarters. As far as the ANDAs or the products are concerned, they are in line with our strategic profile in terms of how we look at the products internally, and we expect to launch them in the near to medium term. Those are very small tuck-ins that we really saw value in and took them over, but we cannot get into specifics of it. They will form part of our pipeline and growth in the near term to medium term. As for the competition and the intensity, it is very specific to the new launches that we've had over the last 12 months. If you really see across the rest of the portfolio or the large part of the portfolio, we are not seeing any erosions. In fact, we continue to maintain our market leadership position, both in terms of volumes, and which is where you also see that gross margins are steady. What the impact on these products meant is that what could have been a very solid growth, that growth did not come through because of these impacts. Just a clarification. First, on hedges, what I was referring to is whatever balance sheet hedges losses that we have booked would be with respect to the outstanding forex you would have taken for forward booking of revenue, right? Potential revenue. We have not booked any balance sheet losses or hedges. That impact is not much. What I spoke about was the impact of restatement of foreign currency debt. Okay. Restatement, more about restatement. Okay. I understood that. It is more restatement of foreign currency debt. We don't have any significant outstanding hedges that are impacting. Just clarification on this competitive intensity. Generally, in the past, if we exclude the post-COVID period intensity, how long? You You will be in better position to make a guess than us. Understanding that it's a forward-looking statement, it may or may not hold true. I understand that. How long generally, or how long it lasts? Forget about the intensity. Generally, because there are multiple things, if you can just help us understand, because we all think that when competition sets in, it can last for 2, 3 years, and the price erosion could be very serious, given the recent experience of post-COVID. Yeah. I mean, like we had said, our focus remains on profitable expansion, and we continue to remain focused on that. We expect that through our AVD programs and cost improvement plans, we will be able to offset the mitigation. We will be able to mitigate and offset these impacts. It is just that when an impact comes in, it comes in immediate, whereas your improvement takes 6- 12 months to get back those margins. That is what we are focused on, that we need to recoup. It's a competitive market. We have to continuously work on our costs and keep improving our costs across line items and retain our leadership positions. Thank you, sir. Ladies and gentlemen, due to the time constraint, that was the last question for today. I now hand the conference over to the management for the closing comments. Thank you, everyone. I wish you a very happy weekend. We are saying that we'll continue to focus on long-term sustainable business with EPS accretion. Thank you. Thank you. Thank you, sir. On behalf of Strides Pharma Science Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.