Thank you very much. We will now begin the question and answer session. The first question is from Damayanti Kerai from HSBC. Please go ahead.

My first question is on Ambraxane opportunity. So obviously I think we are waiting for Goa clearance for this particular product. But can you comment in case we don't heard back favorably from the USFDA regarding classification etc. How far this product can be pushed in terms of launch in the market? If I remember correctly, earlier you said this launch could possibly come in second half of FY25. So what is your recent thought on this product?

Yes, I think it depends on the clearance of Goa. And I think from the time of the clearance, the clock starts pretty much for this product. So from a timeline perspective, th is is the fastest possible way.

Okay, in case Goa takes slightly longer, then you proceed with the CMO route, then how long I guess we have to wait?

So the CMO route is going to take much longer. That, you know, it will have to be filed as a supplement. So that is definitely over a year.

My second question is on the supply issues which you mentioned on Lanreotide. Is it purely the capacity constraint or there are some other issues and are you remain confident about preserving this in a quarter and then supplies going back to the normal level? And then a quick question on the four approvals which you got during the quarter. So I believe one is the peptide product, Calcitonin. So do you have manufacturing capability for that particular product or it will be again done through CMO?

The most Calcitonin (Salmon) is likely from a CMO because the source of the API itself is different. So yes, we are not doing it. It's being done through a partner. So that's on Calcitonin.

And on Lanreotide issue?

So Lanreotide is, I think there are two things that are happening. One is as we are expanding capacity, we have to reconfigure, the partner has to reconfigure the lines. I think some part of it is that. Some part of it is also that there is more demand than we anticipated. So I think it's a mixture of both. So it's capacity creation plus also maybe maintenance at the site because of which this quarter is down. I think we are confident that quarter four onwards we are good with this.

You are investing in the partner side for capacity expansion or how is the arrangement there?

No, our partner is investing. Our partner is investing. It is their site.

My last question is on India business. So again, I guess we expect to see better seasonality in 3Q. So are you seeing like initial sign of better pickup in the respiratory for third quarter and that's why you believe you could still outpace market growth in the full year basis because after 3Q, I believe, fourth quarter is generally a lean quarter, right?

That is correct. So the seasonal triggers for respiratory, the pollen alerts, the pollution environment typically starts after Diwali. So we are beginning to see some of that rising, but hoping that, I don't know how we will hit the season, but we are hopeful that this particular time of the year will mimic the other. Unlike the acute season, this is not solely a seasonal trigger. It is also the impact of pollution in the air. It is also an impact of allergens and pollen.

Thank you. The next question is from Anubhav Agarwal from UBS. Please go ahead.

Good evening. Just continuing on the question, Lanreotide, I am just trying to reconfirm that at your partner, there is no external constraint because of which the supply has been impacted because for European partner, supply was impacted in the June quarter. Now you face constraint in September and you're guiding for the December quarter also being impacted. So first, sounds strange that partner is expanding that's why 9 months of total capacity being out and severe shortage in Europe and you also facing shortage. So confirming that there is no external dependency for the partner, it is just because they were expanding that's why they're facing so much shortage.

So I think what we can confirm to you Anubhav is that the issue is not a supply chain related issue in terms of material or anything. The issue is linked completely to the partner's production.

And Umang, how do you get confidence that this will come back to full normal level?

Because we visited. Because our teams have visited, they've made an assessment, and we are on regular calls with the partners. So we have our confidence in that.

And what would be the impact for you guys? For example, $237 million revenues this would put it go down. But let's say about below 225 next quarter, what kind of impact will it be for…

Yes, I mean, we are going to see a fairly reduced number on Lanreotide for Quarter 3. And I think, yes, it could be lower than the 220 mark. Depending on how quickly we get supply back, we could be looking at something in lower than 220.

And just one more clarity, in this quarter was the generic Revlimid was this quarter-on-quarter higher in September versus June quarter?

I will ask Ashish. Ashish, do you want to comment on this one?

Yes, we don't give guidance on lenalidomide sales because of the contract that we have with them. And on the previous question, just want to clarify that quarter one , quarter two has not been impacted in Lanreotide while we may have talked about some anticipated supply issue in on our calls, but the numbers we achieved 35% share in Lanreotide franchise of both assets, and that's what we should revert back to after we have the supply issues sorted out in quarter 4.

Thank you, team. That's helpful. Just one more last clarity of this. So once capacity is expanded, are we talking about, let's say, just a ballpark understanding? Can our market share go up by 20%, 10%, some ballpark understanding in next 1-2 years on this product?

Yes, market share could be higher. That is for sure in this case.

No, that's obvious, right?

Anubhav, just one thing. I think one of the reasons we have attributed is to capacity increase. Not all the reasons on production not being there is solely linked to capacity , just to be very clear. There are no reasons on supply chain that constrain the product. The reasons that are constraining the product is production at a partner site. One of the reasons the production is there due to increased plans for capacity. But there are other reasons as well which may have perhaps, which may be the same that you may have picked up on from the European partner for this for our manufacturing part.

Thank you. The next question is from Ameya from JM Financial. Please go ahead.

First question I have on the Africa region. So this quarter we have seen a good amount of uptick in the Africa segment. So you expect the sales to normalize in the coming quarter because there has been some about 10 million jump in the tender sells as well as there is a 17% -18% growth in the private revenue while the secondary growth has been in single digits. So if you can clarify?

Sure, see, a couple of things I would like to highlight. One is, like you rightly said, there's been a significant increase in the tender business. Okay, this is more opportunistic, where we make good margin is where we participate. And we did some vaccine tenders as well, which has helped us to grow that. And tender business will always depend on tenders coming in as well as the margin that we are making. So, it will sustain, but it can also certain quarters may be different. The other reason for the performance is also now a fully integrated actor, which was not there in the previous quarter. So that has also added to OTC as well as Rx. And this is going to be sustained, this will sustain because actor is now part of our portfolio. So we'll add to growth through actor. And the third thing I would like to highlight is that we have been constantly focusing on new launches in South Africa which has also helped us to grow faster than the market. So yes, it is a big difference but these are some of the l evers which have helped us and will continue to help us to grow fast for other market.

So is it fair to say that Rs. 800 crore to quarterly run rate is largely a new base or vis-à-vis some movement in the tender side?

No, we can assume this to be the base. There will be no de -growth, I would say. But anyways, like we always have said, the focus on Africa will always be margin for us because it is margin dilutive on an overall basis. So it's lower than 25% at the company level. So the whole idea is just to focus on margin to get it back to track. So if that means that we have to give up some revenue, we may give up, but we don't anticipate degrowth in One Africa.

Sure, thank you so much. The second question I have is if you can provide the updates on some of the filings like, respiratory filings like Dulera/Qvar and Symbicort?

Yes, so the timeline has not changed for us. So the guidance that we had given earlier that of FY27, that continues to be there for Symbicort and Qvar, and one more partner inhaled asset that we have talked about.

Thank you. The next question is from Surya Narayan Patra from PhillipCapital. Please go ahead.

First question about the sequential decline in the US sales for the quarter what we have seen. Could you clarify what would have impacted? Because sequentially, we have seen improvement on albuterol, we have seen sequential improvement in Lanreotide and obviously the Revlimid would be sequentially remaining flat or slightly improved. So what would have impacted the QoQ performance in the US? Whether it is any pricing?

So one is definitely Lanreotide.

Press release indicates our Lanreotide market share has improved quarter-on-quarter.

That is as of August.

Yes, it's a matter of August.

That is as of August. I think the issue here is largely on account of a reduction in Lanreotide and potentially one other product which we may have and also please keep in mind though we did the 250 number in quarter 1, we were very cl ear that that was not the trend line for the US business and the real trend line for the US business was between 230 and 240.

Okay, so that was my first. Second question was about the removal of the patent for this Advair as well as Albuterol by GSK and Teva on the request of USFDA. So because of that, have you seen any kind of finance competition or any pricing implication or do you even expect any kind of if not seen so far, going ahead, do you see an enhanced competition price or what impact that you do see because of those developments?

It's difficult to quantify at this stage, but as of now, we don't see really a big impact of this. Because even if the patent is off, for anybody to develop the product, it's going to take 3 years or 4 years. So I don't think that will impact us.

And just last one point I wanted to clarify a bit about this Africa integration, the One Africa thing, see, what is the kind of synergy that we can have, having seen the success here in One India, while it sounds similarly for Africa, One Africa, but what synergistic benefit that that can flow out of these initiatives may not be on the revenue side on the profitability side and your strategic initiatives for that, because new product launches in licensing for Africa market. Those have been the kind of strategies that you have been anyway following for those markets. So now with this One Africa, what one should really think and what changes that one can see?

See, I think I can probably, and Umang you can add, so one is a little bit more focused approach to Africa because in EMEU it's like 85 countries sitting out there. Okay, so when you just bring it along with Africa, you get a better leadership focus to actually grow that region and we see some potential out there. So that's one. Second is some supply chain benefit you will get especially products going from India to Africa. So there can be some benefits out there. Yes, apart from that, our One Africa strategy broadly is top cities rather than top countries within Africa. So rather than going deep in each country, you go deep in top 20 cities. So this actually helps us to achieve that focus on top 20 cities as well enough.

Thank you. The next question is from Ankush Mahajan from Axis Securities. Please go ahead.

So my question is related to we have Revlimid sales and Lanreotide. I try to understand that what about our base business sir, how it performed in the last quarter?

We covered that question on Lanreotide like we already covered. I think is there anything specific that you would like to add?

I am talking about the base business.

Yes, so base business has overall done well. In some parts, we have seen some erosion, especially in the business where we have government supplies. We have seen more in the oral solids. We have seen some erosion. Otherwise, in Albuterol, one of our key assets, we have grown in our market share. Budesonide continues to be a strong franchise for us where we can supply as much as we can. And overall erosion has been roughly in the low double digit, maybe 10%, somewhere around that.

Thank you. Next question is from Neha Manpuria from Bank of America. Please go ahead.

Umang, on generic Advair, once the filing timeline from the US facility was towards the end of this calendar year, is that still on? I mean, are we on track to file Advair? And that would then trigger an inspection for that facility, right? So despite that, we expect that we'll get approval, we'll be able to launch the product in first half fiscal 26. Is that correct?

Yes, the facility inspection will have to be triggered. You're right about that. I think our filing batches are currently underway.

And my second question, Ashish, on the gross margin, the quarter -on-quarter improvement, I know it's sort of flattish, slightly better, despite US being lower, even though acute wasn't as strong, there is some acute impact in this quarter. Tender business is higher. So what exactly happened? Is there anything else? Have we seen a better API pricing environment? What's helping the gross margin trend?

The mix benefit that we have got and like I said in in South Africa there's been tender, but there are other tender businesses elsewhere which may have come down , but overall it's the mix that has benefited us for the margin as a gross margin.

Okay, that's the only driver that there's nothing else in terms of the API cost etc . that we're seeing?

API cost has moderated overall, okay, but there are other costs too. Propellant that has gone up. Freight that gets captured in the thing has gone up because of the red sea issue . So it's been a mixed bag out there.

Understood. And from an EBITDA margin guidance perspective, given that we are a little overshadowed over 26% for first half, I know the fourth quarter tends to be seasonally slow for you. But then, other than the one-off impact that we talked about in the US because of Lanreotide given that India will be significantly stronger. Any reason to still keep the guidance at 24.5 to 25.5? Is there any other cost that we're anticipating which would keep ma rgins lower in the second half?

No, we are expecting a normalized Quarter 3 and quarter four. I think quarter four is usually sometimes up 20% kind of a margin. So on an overall basis, we are still staying with the guidance that we have given.

Thank you. Next question is from Bino from Elara Capital. Please go ahead.

First question, have you seen any pricing impact in Albuterol after the recent competition entry?

Albuterol, see, already there is multiple players out there. Because there is competition, we see some erosion in Albuterol franchise.

Okay, so I assume nothing major after the latest competition entry?

Yes.

Got it. And second, between your Lanreotide 505(b)(2) and generic products, is there a pricing difference or is it more or less the same?

Bino, there will be a difference, but we are not going to comment on that. I think we are determined by market factors. It's not so much that what we control. I think it's a function of the market and I don't think that's something that we necessarily control.

And last question, I believe second wave of GLP1 generic which is Liraglutide towards the end of this year. Would we be one of them?

Bino, can't comment.

We have not disclosed the pipeline.

Thank you. The next question is from Vishal Manchanda from Systematics. Please go ahead.

A question on the US, basically to understand the concentration risk. Can you share what your top three products would contribute to the US sales?

No, see again I think it's a differentiated portfolio approach that we have. So we have large products in our portfolio, but we don't give indication of what concentration level is, again because of the reasons that we have mentioned earlier.

Some broad numbers like 40% plus or less than 40% somewhere?

So see, I think the vintage portfolio of oral solids that was there earlier, where there is enough competition, we mentioned that, that is subject to erosion and that is about 30% of our portfolio. So, 70% would be more differentiated assets for us.

And second on your plant in China, would you have filed for approval for the China markets for the respules, like the Pulmicort respules?

We have got the US FDA approval for facility as well as for the product. And yes, of course, we look to get China approval as well in the future.

But we have filed or you are yet to file for the product?

China approval?

Yes, let Pulmicort respule.

We're not giving that level of detail. I am sorry, but you can expect us to be a player in that market because of the facility in China.

And just one final one on India. Any thoughts on how do you kind of intend to play in the GLP- 1 space, any in-licensing opportunity that you would be seeking or maybe participating in the Semaglutide generic opportunity?

Yes, Sema generic we will be participating and I think hopefully we will be amongst the first wave of people to enter in India. In-licensing is always an option for us in deepening our partnership with large multinational corporations that sell categories of GLP-1 drugs. So I think that is where we are right now from a GLP perspective.

Are opportunities available for out -licensing? Are innovators open to out -licensing in India? I understand Eli Lilly which normally out-licensed their products to India hasn't done so far.

Yes, I think part of you're right, part of it could be a recalibration of whether they'd like to launch by themselves or have another partner. But it's also linked to how they view global capacity. Because the initial period, partners are not able to supply product to market for their existing demand. So now that we believe that it resolved, I think maybe some of the discuss ions could commence again with the partner, with the rest of the people in India who could potentially be partners for their drug.

Thank you. Next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead.

Just one back on Lanreotide. So the August market share is what you've disclosed. So where did say September market share for Lanreotide 505(b)(2) plus generic end up at?

It will be far lower.

But we have not received the data as well.

Should we think of it like at Q1 levels, 20% or even lower than that?

No, I think Shyam, the full flow through of what that share would be in September may not come out because there is still stock that we had a little bit of stock with us. But you will start seeing that perhaps in October quite significantly.

And Umang, your comments that there'll likely be a Q4 bounce back. And are we again talking about similar market shares like 35 or you think we can go higher post the expansion?

I think we can go higher, but it will take some time to ramp up to that. So I think because we are expecting a period of a month or two months where there would have been no production at all, which we now have crossed because of September and October. So building that stock back into trade and channel, I think it will take a little bit of time. So quarter 4, the bounce back will not be higher than where Q2 was if that's your question.

So maybe we're gunning for 35% share back in Q4. That's what you think.

Well, we want to gun for that, but it completely depends on how quickly the partner.

My bad. 35 was just one month. So maybe for the average for the quarter slower. So, okay, I get it. Sorry, my bad. And the second question is just on cash. We have now a billion dollars of cash on the balance sheet. So I just want to understand how are we thinking about capital allocation, either dividends or buybacks or even M&A , if you could outline some of the key priorities for us?

Sure. So now I can go first on this one. I think it's again what we have mentioned earlier, key market for us is India, where we would like to grow. So we would look to make acquisitions in India in the domestic formulation space mainly followed by in US. We keep looking at differentiated portfolio, which comes with some stickiness in the revenue and not facing enough erosion where there is some entry barriers. So I think we look at those kind of portfolios in the US and as we speak we are lo oking at some. And then of course on the return of capital to the shareholders, we have talked about 30% dividend payout. We are already close to that and with the improvement in profits, that should continue to go up. Buyback is a matter of discussion at our board. So that's an active discussion we always keep having when we look at our use of cash.

Ashish, last follow up. So valuations for assets, is it something that you're seeing as frothy or is it comfortable or are you seeing a lot of assets that are available?

No, so, just because we have cash, I don't think we will pay more than we think the value of the asset is and the value of the asset depends on what it can do at the base level and what synergies that are available with our business. So in India, certainly there will be synergies. So there can be some value that you can attribute to that. In the US, we're looking at assets that are in the institution side. So more injectables kind of asse ts where we have built an infrastructure of institutional business through Lanreotide now. The idea would be to also feed that with products so that you can actually realize some economies of scale out there. So yes, these are the strategies that we focus on to make sure that we achieve our internal hurdle rate.

Thank you. Next question is from Saion Mukherjee from Nomura. Please go ahead.

Hi, good evening. My first question was regarding the India business. If you can give some color, particularly on trade generics and consumer, so do you think trade generics has recorded growth this quarter compared to last year given the restructuring we have done? And also on consumer, I remember last year was muted. We had seen like 21% growth this quarter. Why are we seeing sort of that volatility and what's more of sustainable growth here?

So trade generic I think couple of things, one is season, while distribution model issue that we talked about in the quarter, one which had impacted the financials is complete and there is no reason, that's not the reason for growth not to be normal. I think the season like we talked about in anti-infectives has been weak and it's primarily an acute portfolio so that's been an issue. And also it's certain regulatory changes in certain F DC products etc. has also impacted part of the sales. So overall trade generic is more or less a very small increase over on YoY basis. On CHL, I think we have seen a very smart rebound. I think last year like you said was muted so now this is more normalized growth that we have seen, it's also the growth has been supported by the Astaberry acquisition that we made albeit it should not be very large. But yes, we have seen some growth coming from there as well, out of the 21% growth that we saw in overall CHL. And this growth should sustain because there are strong brands and we are working on growing them.

Thank you, Ashish. And my second question was on the tender business. So in South Africa, the vaccine tender, so has that scaled up the kind of numbers we are seeing this quarter or this go for it to sort of go up further? And also if you can share like what percentage of your other business, like outside of South Africa International Business, Ex-US, what is the quantity or what is the percentage of tender sales there approximately?

See, we got the benefit of certain tenders in this quarter. So tender may remain flat or may come down as well. Overall, like I said, we will still continue to grow between 5 % to 10% in Africa. EMEU is a very large market, it's a mix of DTM, B2B primarily, not a lot of tender out there. And that has grown overall as a market that has grown for us at about 18%, but more normalized growth out there would be, because the dollar market, you should expect about it , again about under 10%, I would say.

So this is the overall growth in the EMEU, you're referring to Ashish?

Yes, overall EM EU market. We don't give out the breakup because it's large number of categories like I said out there, DTM, B2B. In different geographies, we have different approaches.

Right, but overall on a console basis, you're saying the contribution from tender is not very significant?

It's not quite significant, yes.

And if I can just ask one more question. This is on R&D. So that the growth is quite muted. So how are we thinking? What are the new areas you're planning to invest? And, over the next two quarters and also going forward in fiscal 26, what's the trajectory on R&D spend that you're expecting?

I think the comparison on R&D, yes, Ashish, let me take this. I think, Saion, the comparison on R&D is also linked to a large -scale trial that was happening in the previous year. So from an already elevated base of R&D numbers, we're showing that muted growth which you're referring to. That's one. Second, I think the topline has expanded quite significantly, which is why you're seeing the percentage coming down a bit. But overall, I think in terms of new areas, oligonucleotides, we're looking a t that. Peptides, we have almost completed our full portfolio. We're looking at respiratory assets next year, that's coming up. Our bio asset that we are developing, that has moved into, we'll be moving to phase one. So I think a lot of those for diversification are happening.

And do you expect any step up here because of these things or it will take time before the trial starts on a larger scale?

I think the big contributor we have seen Saion is basically when you have to do large scale clinical trials. That gets added to this base of R&D. So as your products reach to get to that phase 3 or the PD studies, that's when we realize that this gets added.

Right, so that's a few years out, right? Or do you think…?

Well, yes and no. Because the recipe assets may also start in about a year or so, right depending on the patent outlook. Those would start, I think the phase three on the bio asset could be in the 27 timeframe. So I think some of these will start coming up, depending, some will come in 2026, some in 2027, I think 25, we should have another 20%.

Thank you. We'll be able to take the last two questions. We take the next question from Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.

So just on Goa, the 483 observations, so in terms of resolving this or sharing the data with US FDA?

No, I think from a Goa perspective, we believe that we have responded to the FDA. And the FDA has to make its determination.

So subsequently, has there been any communication from the US FDA in terms of the response appropriateness or anything of that sort?

Yes, the FDA does send us follow -up questions, which we have also replied to. But the FDA has to make its own determination, which the process is ongoing.

Sorry to drag on this, but just that, so this is basically the course of actions the company is going to take as far as resolving the issues on Goa side. But what could be the timeline to implement those measures and get the issues resolved?

So the timelines we have committed to the FDA with over the next six months to a year perspective from aspects that we have determined are important, but those are, I think the classification of the inspection by the FDA, that data is awaited from the FDA. So we will always have regular, corrective and preventive action.

And lastly, sorry, a lot of questions being asked already on Lanreotide, but just maybe one from my side in terms of the partners facility. Is that the dedicated facility for Lanreotide or is it a multi-product facility?

No, the facility is multi -product. I think the production equipment is dedicated to us or to the category of product, let me put it that way.

So, I mean, the expansion of the facility is not just because of the demand, which maybe like C plus product is seen for the partner is looking for the demand for the other products as well. Is that the way to understand?

Well, on the line specifically, it is to this product, right? But on the overall capacity that the partner may be planning, it may be linked to other products.

Thank you. Next question is from Alok Dalal from Jefferies. Please go ahead.

Umang, just to confirm, did you mention about 10% price erosion for the quarter on a portfolio- wide basis?

So YoY is about 10% on a blended basis overall. S o that's on an average basis. Qo Q is a low single digit, so about 3% to 5% roughly.

So not much change with respect to price erosion in the US?

Yes and this is including your Exelon portfolio, everything the government tender, everything put together is 10% YoY.

Thank you very much. We'll take that as the last question. I would now like to hand the conference to Ms. Diksha Maheshwari for closing comments.

Thank you everyone for joining in. If you have any further questions, please write it to investor.relations@cipla.com and wishing you all a very Happy Diwali.

Thank you very much. On behalf of Cipla Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.