Thank you very much. We will now begin the question -and-answer session. The first question is from the line of Saion Mukherjee from Nomura.

Sandeep, you mentioned about growth in India higher than IQVIA market growth as per IQVIA. We have seen some improvement in growth rates, but 10.3% is lower than most of the pharma companies who have reported so far. Can you throw some light around the dynamics here? What do you think is impacting the growth rate in India? And is there someth ing that would ease to improve growth rate in the quarters?

Yes. So see, I think the India growth rate is kind of dragged down because of the Trade Generics. Trade Generics growth was flattish to a very mild growth and Trade Generics now con tribute reasonably to our domestic formulation. So that dragged it downside.

What was the branded growth this quarter, branded generics?

It was 12%.

Okay. Nitin, on -- the costs have gone up. I mean you had, I think, guided earlier employee cost and other expenses are on the higher side. So if you can indicate how much of the cost is on account of CDMO MedTech, which might not be contributing at this point or for that matter, if you can talk about the EBITDA loss from these businesses in this quarter?

Sure. So in terms of employee cost, yes, the growth is more than 16% in the quarter. There are 2, 3 reasons. One is definitely the annual increment. The second is we have added around 1,200 MRs in the last few quarters. So that also impacted the employee cost. And the CDMO business in Enzene became operational from November '25. So that was the third impact on manpower. In terms of other expenses, yes, there were expenses on account of Enzene CDMO business, plus the conversion rate for dollar has increased, which has also benefited us in terms of top line, but the impact is also on other expenses where all our subsidiaries, foreign subsidiaries expenses got converted at a higher rate. It's almost 10% higher than the last year rate. So these were the reasons. MedTech, yes, we have completed the acquisition of Occlutech, but that was in mid of July. So our quarter 1 numbers were not impacted because of Occlutech. Yes, the ortho business, which we acquired, but I think small scale, at consolidated level, the impact is not that high. But just to share the numbers, yes, there was between -- you can say, if we exclude the diligence cost and all of Occlutech, there was an EBITDA loss of around INR5 crores to INR7 crores because we are also investing into this business. We are filing our products outside India. So definitely, this business will break even maybe in next 12 months, but the scale is small like at yearly level, we'll do around INR50 crores of sales from the Ortho business other than Occlutech.

And the U.S. CDMO operation, Nitin, I mean, how much is the drag from there?

U.S. we incur around INR60 crores of operational expense. So definitely, it's a new business. So we plan to break even in the next, say, 4 to 5 quarters. But yes, for the quarter, it was around INR60 crores.

The next question is from the line of Sandeep Kumar from Clindus.

So the first question is on like what is the current status of denosumab biosimilar in the U.S.?

Yes. So denosumab biosimilar approval is a little bit off. So we did not get the approval on the goal date. So that is pushed off by at least a few months.

Okay. So then my second question is on the EU region. So on the -- following the approval of [0 11:13], so are there any specific targets like region markets where the launch is being prioritized or is like full EU availability expected simultaneously?

Okay. No, no. Sorry, I didn't get you properly. You're asking about denosumab Europe like plan, right?

Yes, Prolia biosimilar. So is there any specific regions we are targeting or like…

Yes, Prolia?

Okay. Yes, your usual suspect. So we have a partnership with a company called Theramex. So they are our partners. We are not doing it directly. And as you know, it's very competitive. So there are many, many players even in Europe, just like U.S. So it's not going to be a very meaningful ramp-up for any one of us for some time. So it's not something very significant, yes.

Okay. So my last question is on the r eason -- opinion on Xgeva biosimilar. So when can we expect the launch of Xgeva biosimilar in Europe?

We could be like 3 months away.

The next question is from the line of Amlan Jyoti Das from JPMorgan.

Sir, my question is regarding the India biosimilar...

Sorry to interrupt, Amlan. There is a background noise coming from your end.

Yes. Is it alright now?

Yes, please proceed.

Yes. My question is regarding the India biosimilar front. You had some 6 to 7 -odd biosimilars in India launched for the India entity. How has this portfolio done over the -- since launch? And what has been contribution to the India revenues per se?

Yes. Nitin, do you want to take that? You know the percentage better.

So we have already launched 7 products, as you said, and we do around INR150 crores of annual sales. So I think we have done really well. And because of this backward integration, the margins have also improved for these products at consolidated level.

So sir, this revenue is a part of your India revenues, is it?

Yes, yes.

Then next on Occlutech. So sir, since you have closed the deal in July this year, how do you see the growth for this business as a whole going forward? And how do you see the margins are panning up? I remember you guided to some reaching 10% margins in the near term. So does this guidance...

This year -- see, the original plan was to complete the acquisition and start integration sometime in first quarter, but that got delayed. So we just completed the acquisition last -- in mid of July. And we have started the integration. So this year for around 8.5 months, our target for Occlutech is around INR400 crores of sales with breakeven EBITDA because of delays happened in case of integration. So yes, it will be a bit off from the guidance which was last said.

So every year, you will see a gradual improvement in margins. And as we discussed during our investor meet that a lot of the integration with India operations will start picking up from next quarter. And -- but yes, you can see a 7% to 8% improvement in EBITDA year-on-year and we target to achieve our guidance over 3 to 4 years. Yes. But it will be a very healthy EBITDA business for us within 3 to 4 years.

Okay. And sir, lastly, if I may squeeze in. From this OAI, the Daman unit, could you share the percentage of revenues from this unit for the U.S. if it's available?

I think 45% of our U.S. revenue comes from this facility.

And sir, all of the revenues -- all of these products are still in supply? Is it?

Yes, yes, very much. Yes, yes. Absolutely.

The next question is from the line of Kunal Dhamesha from Macquarie.

Can you throw some color on why the Trade Generic bu siness is not growing? What is -- is it industry dynamics? Is it company-specific dynamics?

I think it's a combination of both. It has got very intensive, the competition. 4, 5 years back, you will remember that not many companies wanted to play in this segment, but now a lot of big guys have entered. And also it's internal because at a large number -- law of large numbers always kicks in. We are maybe the number 1 or number 2 in this segment. And we also tightened our market practices slightly where we are little strict on the number of days outstanding. So therefore, it is leading to this. Nitin, go ahead.

If you look at our numbers for Jan to June quarter -- Jan to June period, we did well in terms of growth. But yes, from April to June, there were some strategic calls taken on outstanding DSOs and all. And also, we have increased our prices because of increase in API prices. So I think the inventory levels in market may have also gone down. So in coming quarters, the primary sales or the sales from this business should recover and lower growth, which we saw in quarter 1, I think in upcoming quarters, the growth should be higher than that. So Jan to June, we did well in Trade Generics, if you look at 6-month numbers.

And sir, well means double-digit growth, how to put that into some form of quantification?

So it was higher single digit.

High single digit. Okay. And then we are saying April to June was flat on a year-on-year basis?

Yes. Yes.

Yes, you can say that. Yes.

Okay. Secondly, on the CDMO business drag of INR60 crores, right, that number looks quite big. So basically, what's the -- this is annual or quarterly?

This is quarterly.

Yes, this is expense for CDMO, U.S.

Yes. Okay. So let's say, for us to become breakeven in the next 12 months, what kind of revenue we need to generate? And then in terms of the pipeline of projects, do we have that visibility now?

No, good question. So next 12 months will not breakeven, just to be very clear. For U.S., we will not breakeven. That's number one. The revenues what we need perhaps will be close to USD20 million to breakeven.

Sir, I didn't get your number, sorry, USD12 million?

No, no. I said USD30 million. Sorry, I said USD20 million, but actually it's USD30 million. USD25 million to USD30 million, we'll break even over there.

Per quarter?

No, annualized.

Annualized. Okay. And for that -- and what -- because CDMO is a pretty big spectrum, right? So which is the part that we are initially targeting? Yes, that would be helpful.

Yes. As Enzene is into monoclonal antibodies, so it's precisely that. We are just into mAbs and we do the development to clinical trial supplies and hopefully commercial in the future. But right now, these are most of the time clinical trial batches and development batches.

Sure, sure. So let's say, for that USD30 million run rate, would you be -- like how many projects do we need to be working on?

No, no. So all that we know. So it depends. Some projects are pretty large. So it's not the number of projects. I think we've got a de cent pipeline. A CDMO has a sales cycle very different from what we traditionally do as branded pharma. So I think we'll have to be patient over there. And the cycle time is pretty large and to work with these companies who could be innovators, not necessarily large pharma, even small biotech, they take their own time. And it's dependent on a lot of things, how well they get funded, how their clinical trial progresses. So I think it's a mixed bag where patients would be rewarded. And just like -- I'm sure you all track lot of CDMO companies, you'll know that. So we cannot measure it with the same tape which we measure the traditional Alkem Pharma or any pharma. But we are positive. Therefore, we have put the facility.

And sir, lastly, let's say, what type of capacities do we have there? Is it currently more R&D related? And then eventually, would it require for us to put some kind of capital expenditure?

Yes. So we have reasonable capacity. We are not very big. We have small capacity, but the technology is a little d ifferent. So if I tell you in KL, that will not really do justice to what we can produce over there. And second part, at some point of time, it will require capex to happen over there as we ramp up because without it, we'll not really get economies of scale, just like any API/CDMO or biotech business. And that will not be this year.

And this facility is GMP compliant, like U.S. FDA-approved?

It is not U.S. FDA -approved because that ha s to get triggered, but it is absolutely in U.S., and we are working with a lot of good companies, and we'll have to trigger the U.S. FDA.

Which will happen with some of the client when they file...

Yes. Absolutely, sir. Absolutely.

Okay. And last question on the U.S. plant. We said the revenue contribution is 45% of U.S...

Of Daman.

Daman, yes. What's the number of pending ANDAs? And what's the total pending ANDAs right now?

On Daman, we'll come back. We don't have the exact number. We'll come back to it.

Next question is from the line of Kunal Randeria from Axis Capital.

First question on the India business. Last year, you made a [0:22:57] orthopedics by making couple of small acquisitions. Would you still be kind of looking to expand this business or would you rather wait until they see you as...

So orthopedics we have not acquired, this is a MedTech kind of...

No, no. You have acquired a couple of small companies, right? Bombay Ortho and...

Bombay Ortho is medical device, sir. It's not your prescription pharma...

Yes. My apologies. So would you be ki nd of still expanding into this or would you be kind of waiting for maybe some new CEO to join and then see how to expand?

Right. Okay. Sure. But any plans? Now you have INR5,700 crores cash. Any plans that you would like to share?

No, nothing. Everything is the same like before. Nothing changed from last quarter.

Okay. Got it. And just one more. Would you be launching Tolvaptan in the U.S. generic [0 24:24] in the U.S. this quarter?

Yes, we would be.

The next question is from the line of Abdulkader Puranwala from ICICI Securities.

Sir, my first question is with regards to the Trade Generic business. So I understand that had got impacted because of your receivable policies or your credit period. But I mean, we have been - - the business has been growing at a slower rate for the last couple of quarters. So any time line you would like to share with us by which you expect growth in this particular segment to bounce back?

No, bounce back -- what does bounce back mean? So like how much do you think we should be doing?

Say, at least in line with what your Branded Pharma business is growing?

No, no, that's very hard. We still want to see -- also it's a matter of discipline. We'll have to reset it, and we'll have to figure things out, and we'll see how the market also evolves. So I think personally, as a promoter MD, I'll be happy with late single digits is perfectly all right. We just need execution and discipline in that business more for the next 1 to 2 years.

There is no capex requirement, the ROCE...

Yes, ROCE is good because, yes, the CFO always reminds me that. So yes, we'll have to be careful on that. Yes.

Sure, sir. Got it. And sir, my second question is with regards to any thoughts on hiring a CEO?

Yes. So we told you last time, we are looking out. So thoughts are the same. And hopefully, next time when we have the quarterly meeting, he'll be there with you. So we are looking also. As you know, it's a critical hire, we can't hurry up. But we are looking also, it's very clear, yes.

Got it, sir. And just a couple of bookkeeping questions. So from the tax rate, I think last quarter, we had guided for a 27% to 28%. Are we still kind of maintaining that for the full year?

See, that was for stand-alone. But at consolidated level, it will be in the range of around 30% to 32% because a few of the entities like our Enzene in U.S. and all, which are reporting losses and currently, we are not creating deferred tax asset on those entities because of which our consolidated tax rate looks a bit higher as compared to stand -alone. So at consolidated level, it will be in the range of 30% to 32%.

Next question is from the line of Tushar Manudhane from Motilal Oswal.

Just with respect to the India business, could you share price volume, new launches growth for the quarter?

So in terms of price, the growth was around 6%. This -- we are only talking about other than Trade Generic business. New launches was around 3% and volume was around 2%.

And sir, in general, the industry growth rate has sort of improved over the last, I would say, few months. Any change you've seen or experienced which is sort of driving this growth? And how sustainable you think these numbers are in terms of overall IPM growth, may it be Chronic, may it be acute?

No. According to us, I think there's nothing dramatically changed. I think semaglutide has gone off patent and -- so those kind of t hings are driving Chronic, I think, by and large. And so we think it's quite sustainable whatever we are doing at least.

Got it. And how much benefit would we have got from semaglutide for...

It's very small right now, sir. Yes, small. But we are among the top 3 in generics. I can share that with you.

Got it. And sir, just secondly, on U.S. CDMO, this opex, how do you see this over full year '27? INR60 crores opex?

You can annualize that. Opex will remain the same. We have to get business, and that's how we can break even and eventually make money. We can't cut opex too much because you know the complexities of a U.S. plant.

Got it, sir. So some business opportunities got pus hed, which is why the breakeven is sort of little taking time? Or this is the way it was -- it has been sort of tracking?

I think it's a combination of both because sometimes reality comes and delays things. So I think we knew that it's goin g to be expensive and business would pick up, but it's taking more than, let's say, a couple of quarters to reach what numbers we were targeting. And also CDMO is a lumpy business, as you know. So when it rains, it pours kind of things. We don't -- whenever it comes, it will come big, we feel.

Got it. So the new contracts, which is where the efforts are, so some gestation period to sort of get the fruits of that?

Yes, absolutely.

The next question is from the line of Rashmi Shetty from Dolat Capital.

Sir, just on the U.S. part, if we convert into the dollar business, in constant currency terms, we see some softness in the U.S. sales during the quarter. So if you can specify the reasons for that, both on Y-o-Y and quarter-on-quarter, I'm seeing that. And earlier, we guided that for the entire

year, U.S. will be in high single digit. So now after this quarter, what is your outlook, also taking into consideration the Daman plant OAI?

Yes. So I think the last thing I'll answer first. I think Daman plant OAI is a concern, but we don't see it as impacting our business because nothing is stopping and Daman has kind of gone through. So we feel confident that this year would not be impacted. Also , we believe that we'll come out of this in 6 to 12 months' time, hopefully. So Daman should not have an impact on business this year. And I think the price erosion was just close to flattish. So price erosion has kind of bottomed out, we feel for us and maybe for the industry, I'm not sure. So U.S. is challenging. We really don't have volume growth. It's more because of currency, and that remains a reality in these products.

So you meant to say that you have not seen any major volume expansion in the products which you'll have launched last 12 to 24 months?

I would say so that's a fair assumption. Yes.

Okay. So then what will be the outlook for the whole year? Still we keep our -- maintain our guidance of around high single digits or you feel it will be flattish?

I think it will be high single digit to mid.

Okay. Mid to high single digit.

Yes, yes. And it will be helped by currency for sure.

Okay. And th is USD30 million revenues which we are expecting from the CDMO business, when can we anticipate that, in which year, by which year we can expect the revenue to kick in?

'27, '28.

FY28?

Yes.

Okay. And again, on the India business, put together Trade Generic business and the Branded Formulation business, what kind of growth can we expect for the entire year?

Round about what we told last time, but we could better that by, say, 100 basis points.

So you feel that in the subsequent quarters, we'll be able to cover it whatever growth we have lost in the Trade Generic business and Branded Formulation will continue to perform. Is that the right assumption?

Yes, we could end up by close to 12%, yes.

I remember a couple of years ago, you mentioned in your annual report that you are focusing exclusively on the non-U.S. markets and international business. So has there been any significant development in that? So this double -digit growth that we are seeing, how sustainable do you think this is?

So this is quite sustainable, more than sustainable. Yes, we are seeing good double-digit growth. And it would continue.

On that, you would like to highlight?

I mean, see, the thing is U.S. is so big that everything else -- even if they grow extreme -- like very high, it will not rea lly move the needle for the next 2 years. But there are some countries on a low base, they continue to grow in very, very healthy double digits. But they're on a small base. So like Germany, it grows by 35%, 40%. But so small that I don't feel like talking too much about it, might not be a good use of our time right now.

Even in Chile and Australia, we did well there.

Yes, yes.

Chile and Australia both like a big market for us, and they have been doing well.

Okay, sir. Sir, and my last question is on the gross margins. We see an improvement on the gross margins this quarter. So sir, any particular reason for this? And how do you see the margins sustaining in the near term in FY27 and '28?

In quarter 1, there were 3, 4 reasons. One is that as we discussed our Trade Generic, the growth was lower and our Prescription business did really well. Then there was also impact on account of currency because U.S. and other markets, even in Aus tralia also the currency supported us. So overall, the mix was better for us because of lower Trade Generic business and also support from the currency side helped us. For the full year, we maintained the same guidance because there may be some impact on account of API price increases, which we have already seen. But since we had inventories -- old inventories at old rate, so the impact was not that high in the current quarter. But in subsequent quarters, there will be impact because of API prices. So we maintain the same guidance of 66.5% to 67% of gross margins for balance part of the year.

Ladies and gentlemen, as there are no further questions from the participants, I now hand the conference over to the management for the closing comments.

Thank you, Yusuf, and thank you, everyone, for joining today's call. Should you have any follow-up questions or require any clarification, please feel free to reach out to us. Thank you. Have a pleasant weekend.

Thank you, ma'am. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.