Ladies and gentlemen, good day and welcome to the Q1 FY 2022 earnings conference call of Sun Pharmaceutical Industries 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 call, please signal an operator by pressing star then zero on your touch-tone phone. I now hand the conference over to Mr. Nimish Desai, Head of Investor Relations. Thank you, and over to you, Mr. Desai. Thank you. Good evening, and a warm welcome to our first quarter FY 2022 earnings call. I'm Nimish from the Sun Pharma Investor Relations team. We hope you received the Q1 financials and the press release that was sent out earlier in the day. These are also available on our website. We have with us Mr. Dilip Shanghvi, Managing Director, Mr. C. S. Muralidharan, CFO, Mr. Abhay Gandhi, CEO of North America Business, and Mr. Kirti Ganorkar, CEO of India Business. Today, the team will discuss performance highlights, update on strategies, and respond to any questions that you may have. As is usual for ease of discussion, we will look at the consolidated financials. Just as a reminder, this call is being recorded and a replay will be available for the next few days. The call transcript will also be put up on our website shortly. The discussion today might include certain forward-looking statements, and this must be viewed in conjunction with the risks that our business faces. You are requested to ask two questions in the initial round. If you have more questions, you are requested to rejoin the queue. I also request all of you to kindly send in your questions that may remain unanswered today. I will now hand over the call to Mr. Shanghvi. Thank you, Nimish. Welcome, and thank you for joining us for this earnings call after the announcement of financial results for the first quarter of FY 2022. I hope you and your family are safe and healthy. Let me discuss some of the key highlights. We recorded the highest-ever quarterly revenue in the first quarter. Consolidated sales for the quarter were at INR 96,694 million, recording a growth of about 29% year-on-year and a growth of 14% quarter-on-quarter. All our businesses, excepting API, witnessed strong growth driven by a combination of robust core business growth, low base of the last year, and sales of COVID and associated products. We are enthused by the all-round growth across all our businesses compared to Q4. Let me now update you on our global specialty business. For Q1, our global specialty revenue was approximately $148 million across all markets. Global specialty sales do not include ILUMETRI end-market sales. Specialty sales have increased over the March 2021 quarter, despite the entry of ABSORICA generics and the subsequent reduction in ABSORICA sales. ILUMYA sales have increased both on a year-on-year and a quarter-on-quarter basis. We are encouraged by the sequential growth recorded by ILUMYA and also by CEQUA, and we expect it to record strong double-digit growth during the year. ILUMYA sales are also ramping up as it gets launched in more European countries. Specialty R&D accounted for approximately 26% of our total R&D spend for the year. Abhay will give you more details on the specialty business later. I will now hand over the call to Murali for discussions on the Q1 financial performance. Thank you, Mr. Shanghvi. Good evening, everyone, and welcome to all of you. Our Q1 financials are already with you. As usual, we will look at the key consolidated financials. Q1 sales are at INR 96,694 million, up by 29% over Q1 last year. Material cost as a percentage of sales was 27.4%, which is higher than Q1 last year due to product mix and geography mix. Staff cost stands at 18.2% of sales. Other expenditure stands at 26.6% of sales. An increase in the absolute value of other expenses is attributed towards higher selling and promotional expenses and R&D, while in Q1 of last year, these expenses were lower on account of the total lockdown across markets. As indicated in our past earnings call, the expenses are seeing an increasing trend across all the markets as we reach full normalization. Though they are currently restrained. Forex gain for the quarter was INR 799 million, compared to the gain of INR 792 million in Q1 last year. As a result of the above, EBITDA for Q1 was at INR 27,717 million, up by 59% year-on-year, with resulting EBITDA margin at 28.7% compared to 23.3% for Q1 last year. Let me now briefly discuss the exceptional items for Q1. Taro has made a $60 million provision relating to its ongoing multi-jurisdiction civil antitrust matters. The exceptional items also include charges of INR 1,503 million towards impairment of DexaSite and acquired intangible asset under development, and INR 382 million on account of write-down of a manufacturing facility, which has been classified as assets held for sale as per the requirements of Ind AS 105. Excluding the impact of exceptional items, the adjusted net profit for the quarter was INR 19,792 million, up 73% over the adjusted net profit of Q1 last year. Reported net profit for Q1 was INR 14,442 million, while reported EPS for the quarter was INR 6.02. Let me now discuss the key movements versus Q4 FY 2021. Our consolidated sales were higher by 14% quarter-on-quarter, at INR 96,694 million. Material cost stands at 27.4% of sales, which is higher quarter-on-quarter on account of product mix and geography mix. Staff cost stands at 18.2% of sales. In absolute terms, the staff cost has increased on account of annual merit increases. We had a Forex gain of about INR 799 million for Q1, as against a Forex loss of about INR 508 million in Q4. As a result of the above, EBITDA for Q1 at INR 27,718 million was higher by 39% compared to Q4. EBITDA margin for Q1 was at 28.7% compared to 23.5% for Q4. Adjusted net profit for Q1 at INR 19,792 million was higher than the adjusted net profit of Q4 by about 47%. The company has repaid debt of about US$185 million in Q1 FY 2022. Over the last 5 quarters, we have repaid debt of about US$765 million. As of 30th June 2021, we are net cash positive even at the ex-Taro level. Let me now briefly discuss Taro's performance. Taro posted Q1 FY 2022 sales of US$147 million and adjusted net profit of US$41 million. On a year-on-year basis, sales for Q1 FY 2022 were higher by 25%, while the adjusted net profit was higher by 42%. I will now hand over to Mr. Kirti Ganorkar, who will share the performance of our India business. Thank you, Murali. Let me take you through the performance of our India business. For Q1, the sales of branded formulation in India were INR 33,084 million, recording a growth of 39% over Q1 last year. India business accounted for about 34% of consolidated sales for Q1. The growth was driven by a combination of core business growth, sales of COVID-related products, and a low base of last year. Sales of products used in treating COVID symptoms and other associated products accounted for about 8%-10% of India's sales for Q1. I am happy to announce that we have recorded a strong growth in the underlying base business, even if we exclude COVID-related product sales. In terms of the growth, our business growth, we continue to witness good growth in the chronic segment, while the sub-chronic segment was a significant growth contributor for the quarter. The second wave of COVID infections in India, particularly in April and May month, impacted our field activities. Many states in the country have imposed lockdown restrictions, which has resulted in savings in selling and travel costs. For Q1, we launched 13 new products in the Indian market. Sun Pharma is the largest pharmaceutical company in India. We have about 8% market share in the domestic market as per the June 2021 AIOCD AWACS MAT report. As per the SMSRC report, we are the number one ranked by prescription with 10 different doctors' categories. We also continue to remain the partner of choice for in-licensing of products, given our strong number one position in many therapy areas, including therapies for the treatment of COVID infections, coupled with our large distribution network. I will now hand over the call to Abhay. Thank you, Kirti. I will briefly discuss the performance highlights of our U.S. businesses. For Q1, our overall sales in the U.S. grew by 35% over Q1 last year to $380 million. While all our businesses in the U.S. have grown, the main driver of growth was the specialty business. The U.S. accounted for about 29% of consolidated sales for the quarter. Our specialty revenues in the U.S. have grown over Q1 last year, mainly driven by ILUMYA, CEQUA, LEVULAN, and ABSORICA LD. Specialty sales have also grown compared to the March 2021 quarter, despite the drop in ABSORICA sales. While doctor clinics have been open in the U.S. during the quarter, the situation is yet to fully normalize. Patient flow to doctor clinics, as well as frequency of doctor calls by our medical reps, are both still below pre-COVID levels. All of you would have seen our recent announcement of the in-licensing of WINLEVI in U.S., an anti-acne specialty product subject to HSR clearance. WINLEVI is a new class of topical medication in dermatology and will complement our existing oral acne portfolio. The addition of WINLEVI further strengthens our position in the acne segment. It is already approved by the U.S. FDA, and we expect to commercialize it in the U.S. in the October-December 2021 quarter. Let me now update you on our U.S. generics business. While the U.S. generic business continues to be competitive, the Sun ex-Taro generics business has recorded growth both on a year-on-year and quarter-on-quarter basis. This growth is driven by a combination of new launches and better supply chain management. I will now hand over the call to Mr. Shanghvi. Thank you, Abhay. I will briefly discuss the performance highlights of our other businesses, as well as give you an update on our R&D initiatives. Our sales in emerging markets were at $218 million for first quarter, up by about 25% year-on-year. The underlying growth in constant currency terms was about 19%. Emerging markets now account for about 17% of the total sales of Q1. Formulation sales in Rest of World markets, excluding the U.S. and emerging markets, were $185 million in Q1, up by about 35% over Q1 last year. ROW markets accounted for approximately 14% of the consolidated Q1 revenues. API sales for Q1 were at INR 5,149 million, down by about 7% over Q1 last year. We continue to invest in building an R&D pipeline for both our global generics and specialty businesses. R&D efforts are ongoing for the U.S., emerging markets, RoW markets, and India. Consolidated R&D investments for first quarter were at INR 5,926 million compared to INR 4,206 million for Q1 last year. Our current generics pipeline for the U.S. market includes 86 ANDAs and 13 NDAs awaiting approval from the U.S. FDA. Let me now update you on our specialty R&D pipeline with multiple clinical trials ongoing for enhancing our specialty portfolio. The key molecules include ILUMYA, which is undergoing phase III clinical trials for psoriatic arthritis. SCD-044 is undergoing phase II clinical trial for atopic dermatitis and for moderate to severe plaque psoriasis. MM-II is also undergoing phase II trial for the treatment of knee pain in patients with symptomatic knee osteoarthritis. Finally, our GLP-1 agonist is in phase I trial for diabetes. With this, I would like to leave the floor open for questions. Thank you. Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on your touch-tone telephone. If you wish to remove yourself from the question queue, press star and two. Participants are requested to use a handset while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, press star and one. The first question is from the line of Neha Manpuria from JP Morgan. Please go ahead. Thank you for taking my questions. Abhay, on the recent WINLEVI in-licensing. Just wondering, when we launch this product, given we have the ABSORICA sales force and the derma sales force already, how should we look at the incremental cost associated with launching WINLEVI in the latter half of this year? Second, could you explain the differentiation of this product? This is a new mechanism of action. You mentioned that in the press release, but how confident are we of the market share the partner had mentioned in their communication previously? Neha, I'll start with the last question first. Clearly, acne, as you know, is a multifactorial condition. At least there are four different pathways and problems that can cause acne. In the last quite a few decades, no new mechanism of action has come through. This is the first one. It at least addresses two distinct pathways out of the four. Therefore, in hormonal acne, whether it is in males or females, this would be a very good addition to the armamentarium of the doctors. On the other hand, if you see ABSORICA, the indication is very specific. It's only in severe nodular acne that cannot be cleared by any other treatment, including antibiotics. It has a niche in the treatment of acne. Our expectation is that WINLEVI will have a far broader-based appeal. For us to be able to handle two acne products in the same team, which is the target, should definitely be possible. The ABSORICA team, which already has a relationship with the customer, will be the one that will be marketing this product, and I think they are best positioned to make it into a good, successful product for the company. Sir, in terms of launch activity, would this require higher spend, given this is more broad-based than ABSORICA was, and I am assuming you would have scaled down ABSORICA spend over the years? In the HSR period, we are not allowed to plan ahead of what we will do. Conceptually, as it's a new product, there will be a certain investment that will have to be made to familiarize doctors with the product. Directionally, yes, we will have to do some investment in the product. To be honest, how much amount, we haven't even figured it out as of now. Okay. Very well. My second question is on CEQUA. We launched the DTC earlier this year. Last quarter, you also indicated more setting up on the promotion efforts that have been impacted because of COVID. Where are we in the entire process? By when do we expect to see momentum in the CEQUA market share? I know you mentioned there has been quarter-on- quarter growth. In terms of market share, when do you think there could be an improvement in market share for us? I think we are gaining market share. That's my understanding. Yes, sure, all of us would like even faster growth than what we are seeing, but I think we are gaining market share. I think for a new product, it will take time to ramp up, and we started DTC, as I told you, two quarters ago. This will be the second full quarter of DTC. I think we will see improvement, and that's what the team is focused on anyway. Okay. Thank you so much, Abhay. Thank you, Neha. Thank you. The next question is from the line of Damayanti Kerai from HSBC Securities and Capital Markets. Please go ahead. Yeah. Hi. Am I audible? Hello? Yes, please go ahead. Okay. Thank you for the opportunity. Sir, my question is on ILUMYA. Can you specify the sales numbers the way you have done in previous quarters? I just also wanted to know the progress of launches in other markets, such as Japan and Australia. If you can share some updates in quantitative terms, say, market share gain or sales, how we are progressing in the ex-U.S. market, wherever we have launched. That's my first question. Murali, can you help me with the global number that we have for ILUMYA? Abhay, I think we've shared the annual number. The total specialty business is what we have given. Yes, correct. Yeah. We've not given product-specific numbers. Yeah. No, to that I remember. Total specialty business, I think, I don't recall, was it $143 million or $145 million? $148 million total this quarter. Yeah. That is what we have disclosed. Last year was $81 million. Yeah. Yes. That was- There are a lot of specific numbers that we haven't given. This is a total specialty business that we have given. Q1 last year, our total global specialty revenues were $81 million. Okay, sir. Are you not specifying a product-specific number for the quarter? Just to clarify. Yeah. We are not specifying a product-specific. We have been sharing global specialty revenues of all the branded products. Okay. Sir, progress in other geographies, the key geographies where this product has been launched, say Japan or some other big markets? Japan, I think, we are in the process of getting entry into hospitals because, unlike many other countries, Japan still has certain restrictions on COVID and medical reps being able to visit hospitals. The uptake is likely to be a little bit slower. Japan team is very confident about becoming successful with that product. Australia, also, I think we continue to grow the product quarter after quarter. In terms of getting new patients, I think it's competing quite well within the IL-23 class. Okay, Sir. That's helpful. My key question is on the U.S. generic business. You mentioned business remains competitive, but what are your observations on the U.S. pricing environment recently? Some of your peers have faced some challenges. On your portfolio, what kind of changes are you observing on the pricing part, and how do you see the U.S. generic business moving up from the current level in terms of growth over the next few quarters? We have consistently maintained that the pricing environment remains challenging. It is, of course, a product-specific thing. Depending on the product, you could face slightly more or slightly less pressure. That's been our consistent stance then, and nothing has changed, which makes me think any differently. Having said that, in that environment, we have to continuously try to find ways to grow the business. New product launches is one avenue, and of course, trying to increase the share of the existing portfolio of products through both in-market activities as well as the management of the supply chain, I think, are the critical components of our strategy. Okay, Sir. Thank you. I'll get back in the queue. All the best. Thank you. The next question is from the line of Krish Mehta from ENAM Holdings. Please go ahead. Hi. Congratulations on a great set of numbers, and thank you for taking my question. I wanted to ask on the plaque psoriasis second indication for ILUMYA, which I think you said was psoriatic arthritis. The phase III trials, when are we expecting the results? I think there's some confusion. I said that ILUMYA is undergoing a phase III study for psoriatic arthritis. Right. It's already approved for plaque psoriasis. Right. SCD-044, the product that we licensed from SPARC, is undergoing phase II trial for atopic dermatitis as well as for plaque psoriasis. It's an oral S1P1 agonist. We are very confident that the product is likely to be a very effective orally working agent. What's the market size for psoriatic arthritis if the product gets approved? Abhay, you want to respond about ILUMYA? I don't have the exact number that I can speak to. We know it's a large market, but to be able to break it down by indication of different products is a difficult task. I don't have that granular detail that I can give you a number and say it's a market of this size. Right. Just to follow up on the first one, just to clarify the - It's a large indication, if that helps you. It's a large indication and a large size of market. I don't want to misquote by giving you a number in mind. Right. Just to clarify on psoriatic arthritis, it's undergoing phase III trials, right? When do we expect the results? We haven't disclosed the timeline, but I think the trial is currently recruiting patients across centers. Okay. Thank you so much. Thank you. Thank you. The next question is from the line of Anubhav Aggarwal from Credit Suisse. Please go ahead. Sir, about your report on ABSORICA generics sales. In this $148 million, is the ABSORICA AG sales included, or is that included in U.S. generic revenue? ABSORICA and ABSORICA LD are both included, Anubhav. No, I was talking about the authorized generic that you launched. He's asking AG, authorized generic. I think it will be in the generic space. It's in the generic space. Okay. So there- For the specialty and with the lower cost that we're running right now- Anubhav, your voice is breaking up. I don't know who the question is for, but at least I'm not able to get part of your sentence. Sorry. I was saying that for the specialty, now we have a higher scale and lower cost. Have we achieved EBITDA positive in this segment now? No, we said that period, now that hopefully by next year or in the subsequent year it will become positive. That's not changing. You mean to say, Dilip bhai, FY 2023, you expect it to be EBITDA positive? If we are able to gain market share and grow, then hopefully we should be able to, and I think that- Thank you. I'm happy with the progress that we are making. Thank you. We move to the next question. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead. Hi. Thank you and good evening, everyone. Sir, the first question is on WINLEVI. I'm just wondering, which is a mature market in the sense that you have got other options for topical treatment of acne. How important is a new mechanism of action if the old mechanism is working perfectly fine? Just on the reimbursement environment over here, I would imagine that there will be a lot of generic, lower-cost options available. Who would you be competing against? Would it be these generics that you need to convert back into significantly higher-priced WINLEVI? What are your thoughts on this? When you speak to doctors, I think the level of dissatisfaction with the current available options for the treatment of acne is very real in the doctor's mind. Because really speaking, what will work and what will not work, and the level at which the doctors will see a skin clearance for acne patients is a challenge that they all face. That's the reason why, in acne, polypharmacy is very commonly used by doctors. The rate of changeover from one drug to the other is also pretty high. The need for a doctor to get something more, and especially a new mechanism of action, is very real. I don't think it's a saturated market, the way you say. Sure, some molecules like the one that you probably are alluding to are genericized, but there is always a place for a new mechanism of action. Generally, when you talk about access, a new mechanism of action is always helpful to gain access. I think we haven't even started the work till the HSR clearances are through. At some point in time, when that is done, we have to start thinking through the value prop from a payer perspective. Too soon for all that. Yeah. Thanks, Abhay. That's very helpful. Just a small point, your voice is a little faint, so if you can speak a bit, maybe it would help. Yeah. The second question I have is about the generic business in the U.S. A couple of points. One is, it's been very long, I would say 10, 15, even 20 years, since the pricing has been eroding. Not only for new products, even for the base business. Is there some sort of time when you say we are at the bottom of the pricing, how can it go on eroding the base business or older molecules? That's one. Second, sir, where do you see the opportunity for complex generics over the next five-year period, and how is Sun positioning to benefit from this? Sameer, yours is a million-dollar question, which I don't think anybody in the industry has an answer to, of where is the bottom. We really don't know the answer to that. We all hope it is today, not even tomorrow. I don't see that happening in the near future, at least. How the industry will pan out and reorganize itself going ahead is a question on everybody's mind, but no real solution. I think- What was the other question, Sameer? Sameer, I think Abhay is asking more about the complex generics and how we are positioned for that. Before you respond to that, Sameer, my own view is that this business will continue to see price erosion because there will always be some products that have excess margin. I think you reach a saturation of pricing on some products. When they reach there, then I think competition clears out, and maybe the product may also see a price increase in the future. That's how the business is structured. Abhay, I think you can- Surprisingly, if you see that even in the last four or five years, with the price pressure being there. You can see that a large number of new companies are still coming into the market and registering products, maybe a single product, maybe one or two products. Competition is intensifying. The FDA is giving permissions and approvals to products. The competitive environment is actually gaining strength rather than reducing. Yeah. Thanks for this one. The second part, the complex generics? Complex generics are something that we are focusing on, and some of the products that we have launched, we are able to do reasonably well. It's also a learning process for us because sometimes, for a complex generic, the mode and way in which you sell a normal retail generic versus a complex generic is different. You have to go through the specialty network and so on. It's a good learning process, and I think we are learning rapidly, and in whichever products we are launching, I think I'm reasonably happy with the share that we are starting to see. The question is about the next five years, where do you see the opportunities? Just a broad segment. Is it all modified release or sort of a long-acting injectable or some of those categories? I just wanted to ask here, is it a fertile ground, or is the ground drying up, and there aren't too many opportunities? I cannot pinpoint a technology and say that, if you have a portfolio of, say, injectables or this or that, that's where the opportunity is. I think we tend to look at opportunity more from a product or a portfolio point of view, and the channel in which we can have a substantial offering, which you can then become meaningful to the buyer. That's how we tend to look at it, rather than focus on a technology platform in the complex generics. Now, sure, a lot of them happen to be in the injectables space. Some of them happen to be the inhalation space. That does happen. Our focus is more to try and look at it from A, the customer, and secondly, from a product perspective, rather than get technology-focused. Okay. Thank you very much. Thank you. The next question is from the line of Anmol Ganjoo from JM Financial. Please go ahead. Yeah. Hi. Thanks for taking my question. My first question is on domestic formulation. I know there's been commentary to the effect that it does contain a fair amount of COVID contribution. If I look at our portfolio and a sequential bump up of close to INR 600 crore in domestic sales, a significant part of it has to be driven by some of the other factors, like pent-up demand and some normalcy in this quarter as well. Besides that, we're also seeing things like consolidation of market share. I just want management commentary to the effect that how much of the incremental INR 600 crore sequential sale is attributable to COVID. I know I won't get a number for that answer, but any directional help would help. Sure. I think I already shared, at least directionally, the COVID numbers, 8% - 10% of our sales for the quarter. I think the way we should look at it is that we have grown on a base business also. I'll put this into three buckets. One is the chronic business, then semi-chronic, and acute. What we saw, our chronic business is a good growth, then semi-chronic has done exceptionally well, and the acute business is also in line with the expectations. In quarter one, all three businesses have performed well. In addition to that, we got some upside from the COVID sales. This is some form of performance. If you looked at both in IMS and as well as in AWACS, overall, the Indian pharmaceutical market has also grown substantially during these first three months. We are in line with the market. We are not very different from the market. I'm happy that in spite of COVID and challenging times in the month of April and May, when there were lockdowns, our team could perform well, and our base business has grown in double digits. Okay. Thank you. That's helpful. My second question is for Dilip. Dilip, this is with reference to some of your earlier remarks where you said that at some point, obviously, there is a large amount of products in the U.S. where competition will withdraw into the challenged pricing scenario. Just trying to understand in your assessment, how far are we from that? Because you have been, contrary to a lot of industry commentary for the last six quarters, emphasizing that U.S. pricing has not turned the corner, and a lot of trends have validated that view. Also trying to understand from a three to five-year standpoint, given now that the cash machine is chugging along, $185 million repaid in the quarter, are we ready to make incremental investments in the specialty portfolio to take it to the next level? Or we'll await execution milestones on the existing portfolio? Thank you. I think we believe that, in addition to our existing business, with our cash flows and our ability to find the appropriate place for this cash flow, the opportunity to invest in creating a global scale as well as a global specialty business is an important opportunity for us, and we are focusing on strengthening our ability to succeed in that. I am happy with the progress that we've made, and this progress allows us to confidently look at potential future opportunities that will come our way. If we are able to successfully execute, that will give us the confidence to do more transactions. We will continue to focus on growing our existing business and also look at additional opportunities for us to grow. If you've seen Sun Pharma, I think it's a history of organic growth and bolt-on acquisitions or sometimes more strategic acquisitions so that we can continue to grow at a significant pace, even on our very large base business. The earlier part that will also be positioned for the fact that at some point, generic pricing will bottom out. What, in your assessment, is the distance we are away from it, if at all? No, I think for you, generic price is an amorphous statement. For us, in the industry, we look at product-wise pricing. At any point in time, there are products that are, let's say, likely to see a price increase. At the same point of time, there are products which are likely to see a price reduction, and some products may remain stable. The impact of this on different companies is different because it is a larger percentage of their product portfolio. This is something which we have to keep in our perspective so that we can anticipate and, say, Aurobindo has seen significant price erosion quarter after quarter over the last maybe three to four years. A similar level of price erosion Sun hasn't seen, because we had a larger percentage of product in what you call already a highly competitive marketplace. I think price erosion is an impact that is different for different companies. That's not going to change. If tomorrow, let's say, we have it out of our existing business, a large percentage of business coming from a high-priced, very profitable product, then with new competition coming, we will also see price erosion. The trick is to keep on rejuvenating your product portfolio so that you can continue to grow the business in spite of eroding part of your sales. Thank you. That's helpful. Thank you. Thank you. The next question is from the line of Nithya Balasubramanian from Bernstein. Please go ahead. Yeah, hi. I had one question on WINLEVI. Is the in-licensing agreement restricted only to the approved brand, or will this also extend to any future optimizations that Cassiopea might do on the clascoterone formulation? Right now, it is on the approved brand only, and for both the U.S. as well as Canada. To the best of my knowledge, I don't think they have any product life cycle management research going on for the specific product in question. Okay. The other one was actually on India SG&A expenses. As I look at your other expenses line item, it is broadly flat quarter-on-quarter. Just wanted to get a sense of, would you say that sales and marketing expenses in India have largely normalized? Was Q1 another quarter, or was there, of course, wave two? Should we expect to see these numbers in sharp when things are hopping back to normal? In our readout, I've also said that the current quarter expenses have been restrained. Yes, the second wave was more so in India and not the same across all geographies put together. There are expenses that have increased. However, there are a lot of moving parts. Like we have some savings in traveling, maybe in India, but at the same time, the other expenses, we have the R&D, which has increased a good component of that. We do expect expenses to increase as full normalization happens. We definitely saw in this quarter that the expenses were correctly restrained. That's what we shared in our readout. Got it. Thank you. Thank you. The next question is from the line of Surya Patra from PhillipCapital. Please go ahead. Thanks for this opportunity, and congrats on the great set of numbers, sir. Just on the branded business, almost 70% of our business is branded business. If I just put them all together, into domestic, emerging markets, and RoW, kind of. All these markets have really delivered a strong double-digit year-on-year growth, and sequential improvement is also in the range of 15%-30%. Is it driven by some kind of channel filling, because we are coming out of a lull period to a kind of normalized period? Is it that, and hence accordingly, we have seen a kind of comfort in the overall profitability or margins? Can you just add something to this, whether this is a kind of quarter-specific trend or kind of a possibility of a continued momentum that we can see? So I think- Yes? We need to factor multiple issues before we respond. Sure. Current COVID status across different markets is very different, and we have no understanding of how that is likely to impact the business. I'm talking specifically about international business. Sure. Actually, even in India, we are looking at a potential third wave, and we have no understanding of how severe that wave will be. In such a situation, to give out a long-term or even a significant guidance number, whether we will continue the growth or not continue the growth, I think would be responding without having adequate operating control. I think what we are happy about is that in a challenging environment, all our businesses have found ways to deliver significant growth, more than what they were giving in the past, and also, as I see some things. Yeah. I think that part, I think I am reasonably confident that our teams will continue on things that are not in our control. Okay. This is not the channel-filling kind of development that led to the branded market, strong growth in the branded market. Is that correct, sir? Yeah. That's something which we are very closely monitoring all the time. We track secondary inventory in the marketplace with customers on a- Okay. Ongoing basis. My second question is on the specialty business, sir. Now, since we are getting ready for a kind of a recent product introduction, and we are also seeing a kind of a healthy progress in the overall specialty portfolio, and hence, possibly no incremental spend that we should be possibly seeing. Given these two facts, is it fair to believe that the SG&A spend on the specialty side is likely to either remain flat or kind of a correcting kind of a trend that we can see going ahead? Abhay, maybe you can respond. I got the question in a very jerky tone. If I have to state what I've understood, your question is that will the specialty will spend with the addition of WINLEVI remain flat, or will it increase? Is that the question? Yeah. Considering new product introduction and also potentially a reduction in the current spend rate in the portfolio. What is the trend that one should see there? First of all, on how much we are going to spend on WINLEVI, we haven't even reached there till we complete the HSR phase. Having said that, as I said, conceptually, a new product will require some investment going in. You also have to factor in your thinking that the kind of expenses we used to make on ABSORICA will come down. There will be an expense on ABSORICA LD for sure, but still, there will be some reduction in the expense, which we would have otherwise done on the whole ABSORICA franchise on a higher turnover. That —to some extent, and that's my hope, and I said we haven't done the work as yet— will normalize to some extent. Other businesses where required, if we have to invest, we will, keeping a long-term view in mind. Where we think the spending has been optimized and on the same expense base, now the real task is to grow the share of the market, we will go in those directions. Again, it will be dependent on a particular product, what kind of life cycle it is in, and what kind of investment it requires. We will look at it definitely very prudently. Sure. Just a small clarification. Whether the LEVULAN has become normalized in this quarter, that is one. Secondly, if you can share, sir, the share of ILUMYA in the IL-23 category in the U.S. These two things, can you please clarify? LEVULAN's share has normalized, but remember that Q1 is also a low quarter for LEVULAN because of the seasonal factor. If you see the overall market, I don't think it has come back to normal. Number of cases that a doctor is able to see with social distancing, norms, and all, is less than what it used to be, maybe a year and a half ago. When we say normalized, I mean it is up from the COVID times, but I don't think it is back to where it should be in a pre-COVID environment. Sure. Two ways of looking at the whole thing. Your second question was the share of ILUMYA of the IL-23 market. I don't recall the exact number, but in the ballpark, I think it should be in the range of around 8% or so. Okay. Sure. Thank you, sir. Wish you all the best. Yeah, thank you. Thank you. The next question is from the line of Nimish Mehta from Research Delta Advisors. Please go ahead. Yeah, thanks for the opportunity. Just one small question. Earlier, we used to feel that doctors would prefer IL-23 over IL-17. Has that still remained like that, as in with the increase in sales? Are you more confident about that? What is your understanding of the same? Abhay, you were responding? No, sir, I didn't get the question. As I said, I'm not getting the voice very clear. He's saying that IL-23 over IL-17, if doctors prefer it, then? Right. I mean, that's what I understood, Nimish. What is your question? Correct. Yeah, it's the same. Earlier, we had this assumption or theory, and I just want to know whether we still hold on to it, or if there is any change in the view, or even if it is consolidated? That would be helpful for me to know. Sir, I still haven't understood the question. What is the question? What he is saying is that you said in one of your calls, saying that doctors like IL-23. True. Over IL-17. Right. Is that still your view? No, that is still my view. Clearly. I see no reason to look at this any differently, because even though IL-17 is growing, IL-23 is growing much faster. Exactly. If you see the top three products in terms of growth in the overall therapy, the IL-23s are the ones that are driving the market. SKYRIZI is number one, and ILUMYA is number two in terms of growth. Understood. The driver for growth of the overall category is driven by IL-23, and therefore, I think I'm comfortable standing by my view that doctors are happy with the performance of this class of drugs. Understood. Yeah. Thank you very much. That's all. Thank you. The next question is from the line of Shyam Srinivasan from Goldman Sachs. Please go ahead. Hi. Thank you for taking my question, and good evening, everyone. Just the first one, margins have really surprised on the EBITDA side this quarter. We moved out of that range of about 20%-24%. Just want to understand, I know you don't give point guidance, but how should we look at this as we go forward? I'm just trying to tie some of the comments around SG&A going up, but is there something that we need to keep in mind? I also noticed that this is one of the few times that gross margins have come down, but EBITDA margins have gone up. I know there are a lot of moving parts, but just anything that can help us directly on EBITDA margin? Shyam, as we said, the expenses in the current quarter have relatively moved up, comparatively. Different geographies have a different impact of the second wave in India. Within April and May, they were impact. Overall, what we are saying is that the expenses will inch up as normalization increases. The company continues to focus heavily on cost optimization and improving efficiencies. That's one of the reasons, if you see the last eight quarters, there is a consistent improvement we're trying to make on the overall EBITDA margins, and the effort will still continue. It's pushed by the strong growth in top line and operational efficiencies. Got it. That's very helpful. Last question is on R&D. I think you've called out quite a lot of clinical trial activity. You're at about 6% or so. Is there anything that you're budgeting higher, say, 6%-7% or 7%-8%, as we've seen in some of your press releases? Just want to understand how we should look at R&D. Is that going to be bunching up, or do you think the way it is in terms of the different trials for the different candidates, how should we look at that number? Thank you. I think you should range it between 7%-8%. Got it. Very helpful. Thank you, and all the best. Thank you. Thank you. The next question is from the line of Sayantan Maji from Credit Suisse. Please go ahead. We can't really hear you. I can't hear at all. Sayantan? Is this better? Yes. Please go ahead. Okay. My first question was on ILUMYA. Just wanted to get a very broad clarity. If we consider two segments, the commercial segment and the Medicare segment, of the total sales today, which will be the larger segment out of these two? The commercial segment will clearly be the bigger segment. The commercial segment will be larger, roughly, right? Correct. Okay. Thank you. The second question was on WINLEVI. When you evaluated the molecule- When we what? Sorry, your voice is breaking for me. When we what? [audio distortion] Evaluated? He's talking of WINLEVI, Abhay. Yeah, yeah. Yeah. Cassiopea talks about them having the pre-discussion with the doctor, talking about efficacy levels similar to EPIDUO and ACZONE, but both the molecules will go generic soon. In your evaluation, what's the impact? Those molecules are kind of 1 million + prescriptions they have done. What would be the impact of them going generic before or around the time when you'll be launching this molecule? My answer is what I said earlier. I think for a new mode of action, there is enthusiasm at the doctor's level because of the dissatisfaction with current therapies and the outcomes, and also the use of polytherapy. I think both these give me the optimism that, despite the fact that two products will be going generic around the same time that we launch our product, there will be interest in the doctor community, because initiating use of our product. That's one of the things that we factored in, you're right, in our entire evaluation of the product. Okay. Thank you, Abhay. Dilip, just a question for you on the specialty segment. This is a continuation of the earlier question I asked. We are right now earning anywhere [audio distortion] I'm not able to hear you very clearly. I'm trying to ask even outside R&D, are we still EBITDA negative? We don't break out such detailed responses. I think my long-term view is always that at some point of time, this business will become far more profitable and will justify with return on investment in line with our other profitable businesses. We will continue to invest in this business. Also, I think like what Abhay said is that even though all our businesses in the U.S. have grown, our specialty business has grown much faster. We are expecting that because we have a relatively low share of the overall business, we have a significant opportunity to become bigger. Thank you, Dilip bhai. Thank you. Okay. Thank you very much. We'll take that as the last question. I would now like to hand the conference over to Mr. Nimish Desai for closing comments. Thank you, everybody, for taking the time out and attending our call. If any of your questions have remained unanswered, do send them across, and we will have them answered. Thank you, and have a good day. Thank you very much. Thank you. Thank you. On behalf of Sun Pharmaceutical Industries Limited, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.