Emcure Pharmaceuticals Limited analyst Q&A

Thank you very much. We will now begin the question-and-answer session. The first question is from the line of Bharat Shah from ASK Investment Managers. Please go ahead.

Hi. Two or three questions. In the initial remarks you mentioned that Emcure is likely to be the first one to launch Semaglutide in India. But I heard a similar point being made by Eris Lifesciences two days back. You also talked about the strongest or the largest portfolio in the women's healthcare. But I thought that that number probably belongs to Mankind. So I am a bit confused about both of those.

So this is Samit. I will take your question on Semaglutide. So as you are aware, Semaglutide’s loss of exclusivity is in March 2026 for India. We expect there would be quite a few approvals and we will be one among them. That is the endeavour that we are making. So it is not that we will be first to market, we will be in the first wave of entrants that will be able to enter at the loss of exclusivity.

And women’s health care portfolio?

Yes, I think you are correct that Mankind, particularly post -acquisition of the Bharat Serum portfolio, in absolute magnitude would be larger. I think we were basically highlighting that historically we have always enjoyed a leading position in women's health care.

That clarifies. Secondly, you also mentioned that margins would improve going ahead. But when I look at the margins, they are so modest that they only can go up. They are so much below the industry margins that, or rather than industry margin, let me put it comparable model firms operating in this area. So margins in many c ases about 18% are quite underwhelming. And therefore, I would be curious to understand what kind of long -term trajectory you think these margins can be.

Sure. So I think when you look at our margins, it is important to look at kind of the current mix of the business, which is obviously a mix of roughly half of the business being a domestic business, which includes both a fairly strong chronic as well as an acute segment. So obviously, you know what a typical industry margins of those segments are. And we believe that we are more or less in line with that blended average of industry margins for the domestic portfolio. At the same time, we took on a significant portfolio of products for the diabeto-cardiac range of Sanofi, which obviously comes at a different margin profile. As we had indicated in the past , as we unlock some synergies, and our CEO mentioned some of the restructuring efforts that we undertook even in the current quarter, we think that the blended margins of the India business will definitely improve as we see higher productivity and some of the near-term exciting launches over the next 12 months in the Indian context as well. We also have roughly half the business on the international side, where some portion of that business does include the ARV segment, where the margins tend to be more like mid -teens profile. So one has to look at the blend of, the overall international business. And then, of course, there are certain new areas that we are investing in. So for example, our new subsidiary Emcutix for the Derma division is a brand-new initiative. We have already hired a team of 200. We will be launching several products over the next few mo nths and so that division, for example, will take some time to ramp up and get to what we would consider decent margins. And finally, as we had highlighted in the past, 4 of our facilities were recently operationalized over the last 18 months. So as these continue to ramp, will further lead to some operating efficiency. So it's really a blend of all of these aspects where we believe the margin profile will continue to improve going forward.

So if I look at, let's say, next 3 to 4 years, would you like to have some benchmark or an idea as to where you think you belong and where the margins would reside eventually?

See, I think looking at our own trajectory of where we think the different verticals are going to ramp, w e believe that we should definitely be getting about a 300 to 400 basis point s improvement in the margin profile over that time horizon. That will be the endeavour.

One last bit. Probably I could not hear it clearly. There was a mention that r eported profit after tax is 156, but the adjusted one is 171. If I heard it right, I wanted to understand what was that adjustment all about?

So it's a prior period tax charge which is being charged to the P&L in this quarter with respect to the prior years.

This was a INR 15 crores one-time tax charge relating to a prior period.

Okay, fine. That helps. Thank you.

Thank you. The next question is from the line of Kunal Randeria from Axis Capital. Please go ahead.

Good evening. The first question is on domestic business. So can you share what is your growth, organic growth, excluding the Sanofi portfolio? And how much of the impact is there of the FCM issues that you had?

So if I look at the organic ex-FCM, we have grown at about 4%. And FCM would have impacted the reported growth by about 3% odd.

4%. Organic ex-FCM is 4%.

Got it. That's helpful. Secondly, I think Satish sir mentioned that you're entering into ophthalmology and mentioned that you are going to get wAMD as one of the indications. So just wondering whether you'll be targeti ng these niche areas or your portfolio would be a lot more broad-based?

Yes. So, you know, in ophthalmology, the entry would be through this product, Bevacizumab. And within that, this wet AMD indication we see as a reasonably sizable opportunity. Post that, there are two or three more indications for Bevacizumab itself within Ophthalmology that we will be pursuing and in addition to that, we will also build our portfolio. Given that Emcure has inherent strength in sterile products and most of the ophthalmology products are also sterile in nature, it's going to be fairly straightforward for us to build a portfolio around it. So between Bevacizumab, some of this portfolio and where we're also looking at some active in-licensing opportunities, we think the entire basket for ophthalmology should be pretty robust.

Alright. But is Bevacizumab used for ophthalmology in India? I'm not sure. Because globally, I don't think there's any acceptance of conducted trials for it.

No. So globally, Bevacizumab for wet AMD is already approved in UK. And it is globally used off-label rampantly for wet AMD. In fact, in a few countries, it is already been, you know, added in the essential list for the Ophthalmology indication. What we are doing in India through this clinical trial is, get it on -label, but also through our patent delivery and device system, create some IP around it, which will have much better patient compliance as well as ease of use for healthcare practitioners.

Alright. And just a second follow -up on this only. Are there other players who already have Bevacizumab approval in India marketing for this indication? Or is it just oncology for them?

No. No one has this indication approved on-label. However, anecdotally, we are aware that some of the Bevacizumab products that are approved in India are getting used off -label for this indication. However, given the nature of the product and the fact that it is not ophthalmic grade, there have been many serious side effects, including losing vision and eyesight that have been reported in the press.

Got it. And just last one, if I can, regarding Emcutix. Just wondering, since you've already had 200 people on board now, what kind of portfolio do you intend to commercialize? I mean, is it medical Derma or would it be cosmoderma? So, if you can share a bit more details.

Yes. So, we already have a portfolio of prescription Derma products. We are supplementing that with a few cosmeceuticals as well, cosmetology products. And the idea also is, eventually, in the medium term, target a few OTC brands as well. So, it will be a pre tty comprehensive portfolio. And again, as is Emcure’s standard way of looking at the market, a lot of the product portfolio will be differentiated. So, some of the areas like geriatric Dermatology, which has not been fully exploited or is somewhat of an unmet need. Emcure will create some niche products there as well. And there is also going to be active in-licensing that will happen for this portfolio.

Would you also be then just, like a division, would you also be doing mAbs for let's say psoriasis or these kinds of indications?

mAbs for Derma or opthal?

So, just as we have opthal, will you also do for Derma? For psoriasis, for example?

So, you know, they are not immediately in our in -house portfolio, but you are right, there are a few mAbs approved, especially for indications like atopic dermatitis and psoriasis. And we are talking to a few innovator companies to evaluate if we could par tner with them for specifically these products in India.

Understood. That’s very helpful. Thank you and all the best.

Thank you. The next question is from the line of Alankar Garude from Kotak Institutional Equities. Please go ahead.

Hi, thank you for the opportunity. Sir, you identified cardiac as a key focus area and especially with the Sanofi portfolio coming in, we would have imagined that the numbers look better. But if you look at secondary sales data, growth clearly doesn't seem to be very strong. You spoke about that restructuring earlier, but is there any other challenge you might want to highlight on the cardiac side?

So, Alankar, I think as Satish sir has implied, in this quarter because we did this restructuring . The idea for Sanofi for the first 6 months was to stabilize the business because we transitioned to a new company, to stabilize the team. This quarter was when we actually started working on getting synergy benefits out of there. Now, as you can imagine, moving around products across divisions, there was a bit of impact that we had on the sales for the current quarter. That is why you are seeing an impact on the secondary sales. I think there we are quite positive as now the products are stabilized in their new divisions. You will see a lot of cross-sales, co-prescriptions coming through and that should see an uptick going forward.

I mean, not just for say this quarter or maybe the last few quarters. In general, if I look at growth in the cardiac segment for us as reported by IQVIA, the numbers have not been at par with what the therapy growth has been. So just trying to understand, I mean, there was a senior leadership change as well a couple of years back on the chronic side. So any steps you might want to highlight even before say Sanofi came in, any impact of that coming in, addition of MRs as well, any other changes which should help give us more confidence on the growth trajectory in cardiac going forward?

So I think in terms of the IQVIA and AIOCD, our tracking has been a bit lower than what we tracked and looked at internally. I think we had discussed this earlier also. Before this quarter , we were tracking closer to 10% in the cardiac segment. This quarter has slowed down a bit. I think in terms of the measures , there's been a lot of work which has gone in terms of Doctor list improving, how we promote our products, a lot of work on scientific detailing. As you said, there have been a lot of team building exercises done. There's a full new team on the cardiac segment which is now driving that, including some which have come off from the M NC side. So there are multiple initiatives that we have taken out there.

Understood. And this impact of restructuring which you spoke about is likely to normalize from the fourth quarter or it could continue for some time before it normalizes completely?

I think we should start seeing some improvement from fourth quarter onwards. So it may not be fully getting normalized, but it should improve from what we have seen this current quarter. We should see an upper trajectory.

Understood. The second question is, Satish bhai, you were alluding to the in-licensing initiatives in the previous call as well, and you spoke about it earlier as well. Now, which are the key therapeutic areas of focus for us? And maybe a sub-question there is, given many companies are actively looking at in-licensing opportunities, what are the IRR thresholds we are working with?

As far as the therapeutic areas are concerned, oncology, nephrology and metabolic are the three areas, and obviously derma and ophthalmology in which we are making some foray. So these are the areas we are looking at. If you recollect, Alankar, last time also I told you that as far as I am concerned, I have grown because of the support of multinationals. We are in pole position. Number of discussions are in advanced stage, so I'm not in a position to disclose but these are the things that should happen in due course of time. So these are the areas on which I'm focusing . To reiterate oncology, nephrology, metabolic, cardio, derma and ophthalmology. So that's what we are doing very focused.

And in terms of payback, even if you look at Sanofi, the idea is where we can get the brand, synergize them with a team and have a rub off effect both in terms of our products and growing those products. So if you look at Sanofi, there wasn’t an upfront payment that we made out there. So I think then we will be quite conscious of where it fits strategically for us . Where I think payback becomes important is where we looking at innovative products which you want to get first time to the market.

I mean, just to give you an example as Samit mentioned some time back, we are also thinking of being in the first wave of Semaglutide. So having a competent field force with metabolic, that will be a great advantage going forward for doing the scientific detailing. So to that extent, this cross-pollination about which I spoke, so this type of products and even for that matter about a product like Elaxim which we launched a few years back for MI, that particular product is also being given to this particular team because I believe they will be in a position to do better scientific detailing to the doctors. So lots of initiatives are being taken and as I said in my opening remarks, this is very important to me, so personal attention is being given. Piyush rightly said, we should see some positive results in Q4, but definitely in the first quarter of 2025 for sure.

Understood sir, that's helpful and maybe one question before I come back is, can you elaborate on the utilisation levels across the four new facilities Pune, Sanand, Mehsana and Kadu?

So Pune is now at peak utilisation and it was there even last year. That's what led us to setting up our Kadu and Mehsana plants. Coming specifically to those plants, Sanan d is now closer to about 60 odd percent utilisation. Oncology is still in early stages because we are still ramping up -- the filings are still coming through. In terms of Kadu, that is now getting closer to break even. I think by the end of the fiscal year that should be at break -even levels. Mehsana, there are two lines there, we have injectable block and the orals. Orals is now 5 0% plus utilised. Injectables will probably take another 12-18 months before we get to optimal utilisation.

Understood. Thank you

Thank you. The next question is from the line of Alok Dalal from Jefferies India Pvt. Ltd. Please go ahead.

First question is on the guidance. In August, the company had given a guidance of achieving 20% revenue growth and margin in the 20%-21% range. Are you on track to achieve that for the full year?

Given domestic h as been a bit slower, I think on the top line side we'll be probably closer to 18%-19%. On the margins front, I think we are guided for 20%, including the other income. I think what we'll end up at without the other income is closer to 18.5%-19%.

Piyush, for the 9 months, what is the contribution of ARV sales to the company?

For 9 months, half of our emerging sales would have been the ARV.

Half of emerging?

Yes.

Non-ARV, if you look at it, we are present across four key areas. LATAM is a big market for us. Second is the MENA region. Third is Asia, which is more the neighbouring countries like Sri Lanka, Mauritius, Philippines, Myanmar. In terms of the product portfolio, it is the more differentiated products - chiral products, some of our biologics, complex injectables, those are the ones. The differentiated portfolio is what is leading to this growth out there. Some of our biologics, we are now seeing approvals coming through in key markets. Even some of our injectables pipeline including Amphotericin, whic h has started getting approvals now in some of the markets.

Just to add to what my colleague has said, as far as the business in emerging markets is concerned, that's the function of approvals. The company has taken a deliberate decision to file more differentiated products and whatever we have filed 18-24 months back, we are now getting the traction. So that's the reason you are seeing that uptick as far as the emerging market is concerned. And as I told in my opening remarks , we at Emcure, we are very optimistic about Amphotericin B and which is getting you know traction in countries . We are getting virtually 1 or 2 approvals every month.

You mentioned current year for Europe will be muted. Should we expect a pickup in FY26 , towards the high single digit growth mark?

Yes, that is correct. Alok, as we mentioned, t he key products for which we are expecting approvals, those are more backended. And so those we're expecting, start of the fiscal year ’26 and that should drive the growth going forward.

Okay. And last question is on Semaglutide launch in India in 2026. So assuming a few companies launch at the same time, what will be the edge for Emcure amongst all the competitors?

A couple of thi ngs, I think the fact that there's a large degree of vertical integration that's something that should help us . And the other thing also is that , like was mentioned earlier, the fact that we have a very trained field force in the metabolics area is somethi ng that should help us get a head start for this product.

One more thing I will tell you , technically what happens is that some of the se manufacturers who get the approval , they are inclined to give it to 5 -6 people at a time and they keep on competing with each other. So it's my belief, for a product like Semaglutide, if you want to stay in the market and do a good job, in that case you must have complete control of the supply chain. So that’s one area where we are vertically integrated including the API injectables and tablets that we will be making. And as Samit rightly mentioned, i t will be in the hands of highly competent trained people. So that’s the reason we are very bullish about it. The market is huge, so I think there is good scope going forward.

Satish bhai, any plans to take Semaglutide overseas, any markets being targeted?

We look at it in two phases. One is some of the nearby markets where the clinical trials we are doing for India, where the acceptance is there, those will be in Phase 1. And in some of the more regulated markets , an entire ly different strategy will be required which we are pursuing in parallel, so they will be kind of Phase 2.

Samit, in general h ow big can this opportunity be , I ndia plus International combined ? For Emcure rough ballpark, what are you guys thinking?

It is a very difficult number to put because in India the product’s not really been official ly available and the supplies h ave been so limited. At present the numbers look very small but given there could be a situation of unconstrained supply , it will also require some element of market shaping so it could turn out to be very large.

I'll just tell you that I regularly subscribe to The Economist and sometime back, Semaglutide had appeared on the front page. And the number one product in the world right now is Keytruda of Merck Sharp. It does around $27 or $28 billion and The Economist is projecting sales of something like a $100 billion for this particular product along with Eli Lily’s Mounjaro. So it is anyone's guess. I don't have a crystal ball but based on whatever we are reading and even for that matter the various indications for which Semaglutide is getting the approval like it has also got approval for chronic kidney, diabetic kidney and even for heart ailments it works. So I think it is anyone's guess. Only thing that we can say it appears (underline the word) to be a path breaking molecule and should have huge potential so no wonder many people are chasing and we are one of them and we are probably better placed because we have complete control on the entire value chain.

Thank you. The next question is from the line of Gagan Thareja from ASK Investment Managers please go ahead.

Good evening. So the first question is around, you know, the brand which saw patent expiration, I think OROFER, same. Yes, you indicated the impact on the quart er sales was 3% because of the expiration. Can you also quote the same figure for nine months?

Give me one second. Nine months would have been about closer to 5%.

So you're saying that, I mean, in the reported numbers, there's a 5% impact year-to-date of this one brand alone, which has brought down your sales for the domestic. And the base business for the quarter grew by 4%, excluding this one. And for nine months, how much would the base business have grown? Ex of Sanofi?

6% to 7%. Okay. So essentially, I mean, for the year, the incremental sales is all Sanofi linked. I mean, if I do the math roughly, 6.5% netted off from 5%, 1% - 1.5% growth on your base business, and the rest coming from Sanofi.

No, I think just to clarify, we're saying our base business, Ex -FCM, is growing 6.5% year to date, and would have been higher by another 5% if not for FCM. And, of course, Sanofi for part year adds to it.

Yes, so if I look at organic including FCM our growth would have been closer to about 1% to 2%, which Ex FCM would be about 6%, 6.5%

All right. So I mean given that this has been, an unusually weak year for acute – I mean it’s a departure from the past growth in the acute segment but is it reasonable to assume that this is the new normal in acute or do you feel that come next year we might see a recovery in the market itself? How should we then think of Emcure’s portfolio in the domestic market from a growth perspective next year?

So I'll start up and then Sat ish Sir can add up more. So I think acute this year has been a bit weaker. Our view is that we should see some pickup going forward next year and I think for us internally what we're working on are some of new initiatives and a product pipeline to drive growth. So what we have done in Derma or our Opthal launches or expanding our white spaces in women's health or in diabetes side and oncology side , all these will allow us to drive better than industry growth going forward. So that is going to be the target for us.

Our strategy will be the segments in which we are present we would like to have growth which is in line with industry, maybe 50-100 basis points more than the industry, but at the same time to grow more we will be focusing on areas like Derma, I'm bullish about it, ophthalmology and going forward for oncology, you would hear a lot of things from our end. So t hat's the way we will go about. So basically you know whatever base business we have, have growth which is in line with industry that n eeds to be fixed up that is something I told you in my initial remark and apart from that you know focus on ophthalmology, dermatology and double down on oncology. That will be the strategy that my company would be pursuing by which we'll be having growth which is better than the industry average. And as far as acute is concerned, I agree with Piyush, it should happen but at the same time if you look at the trends , generic-generic is possibly making inroads in acute because shifting to generic-generic in a cute because the treatment is typically for five to seven days, is possibly going to happen whereas chronic once people are on a particular medication they are reluctant or hesitant to change. This is my personal observation I don't have any data to substa ntiate this but that's the trend you know that I have been watching from a distance.

Are you are asking for the bifurcation of domestic between Gennova and Zuventus?

Yes, Gennova, Zuventus and Emcure separately.

I don't think we're breaking that out because there's a lot of this thing in that. So when we report our annual numbers, you will have that . But I think there's a lot of interdependencies that we have in there, so not breaking that out.

I mean if it's difficult to enumerate, at least qualitatively or rank order wise is it possible to give some flavor or some idea of how growth would have been for this year

So I think if I look at it , Zuventus is largely an acute portfolio . Most of the semi -chronic and chronic is on the Emcure side. So Emcure is better out versus the Zuventus side. The Gennova portfolio gets mixed out where it fits in, in that sense.

And for the Sanofi basket, how is the sales accounted for? Do you net off what you have to pay in terms of sourcing cost to Sanofi and then report the sales or do you report the sales at ASP and then net out everything else in the cost line?

Yes, so basically the net sales is booked in our sales and then whatever we buy the products from Sanofi at, that comes as your COGS level.

Okay. And sequentially, why has the gross margin come down further from Q2 to Q3?

Q2 to Q3 is largely mix driven between international versus domestic and between the product itself in the international segment.

And if I go back to your Q2 commentary , I think there was an indication that margins would sequentially keep improving, but from Q2 to Q3 there's a drop. How should we think of Q4 and thereafter starting from here?

Yes, I think for the current quarter that was --slightly lower largely because our domestic, as we said, was a bit muted, so that led to the decline that you're seeing QOQ. I think going forward, we should see some improvement in the margins. But I think for the full year, we'll end between 18.5% to 19%.

Okay. I would presume that bringing it down a notch from where you had originally pegged it, would that be a fair assessment?

Just slightly. I think what we had indicated earlier was including the other income , about 20% which would have been closer to about 19% which is slightly lower, 18.5% to 19% is what we're now talking about.

And other income has also come down very sharply in the quarter. Any reason for that?

And last quarter, there was a sale of an asset which showed in the other income.

Okay. All right. And on Semaglutide, since you are very strong in Canada and Semaglutide goes off patent in the Canadian market also just about at the time -- if I understand it correctly broadly around the time it goes off in India, would you be there in the Canadian market?

We're definitely going to be filing our product in the Canadian market. But at this time, the way the timelines are looking it is unlikely that we will make it in the first wave. It'll probably be in the second wave once some of the other patents have also expired.

And that would be how further out from the first wave?

I would expect anywhere between 8 to 12 months.

All right and Semaglutide, I mean while there's this talk about this being such a large market . Once generic entry is there, I'm presuming there'll be price erosion and fairly steep price erosion because it's a product where everyone is very interested to get in . Given that circumstance and given also the circumstance that from a pricing perspective it may not suit the wallet of a fairly large chunk of the Indian population, how do you think of the uptake of Semaglutide? And third obvious point is that the innovators are also now talking of pre-empting generic entry and coming in with their own product in the market sooner. So between all of these three , how do you see this market unfolding over its launch in India?

So, today, the price expectation is not really set because the product is though approved in India has never been made available and I'm speaking specifically of the two injectable products . So in that context, I think the price will be determined by the p layers who enter. It should also be said that the API is quite complex. So while there could be many brands but in terms of number of companies making and especially like Emcure being vertically integrated are likely to be limited so there we should be able to have a COGS advantage. We actually see the entry or the availability by the innovators as very positive because A) it will also set the price expectation and B) innovator will be able to shape and create a much larger market and also since they're getting so many additional indi cations approved the total market size in India should grow larger. And at the end of the day , like we said a couple of times earl ier as well, if you have the right trained field force with the doctor connects already present, you will have a head start. So I think across these three or four parameters Emcure is quite well positioned to have a reason to win.

Final two questions from my side. One is are you backward integrated on Semaglutide? Will you be doing your own API in this and second i s can you also give the PCPM for the third quarter and also you know compare it Q-o-Q and Y-o-Y?

On the PCPM for the quarter we are at about 6.1 versus last year about 5.6.

And on Q2, I think the number was closer to 6.5, 6.6?

Yes.

The next question is from the line of Alankar Garude from Kotak Institutional Equities.

So firstly do we have a 100% stake in the derma subsidiary?

Yes.

Okay so we are not given any equity to the management team, the new management team?

No.

Okay. Secondly can you provide the broad breakup of the $65-$70 million annual ARV sales which will be doing broadly in FY25 across various agencies?

So I think it's mostly going to be the South Africa business and the Global Fund.

And just to answer your question because I know where you are coming from Alankar, the dependence on PEPFAR fund is very , very limited. Couple of million dollars. $2.4m or $2.5m to be precise. So there is no dependence on the PEPFAR. So to that extent you know I think that business is not really going to be affected by whatever decisions the Trump administration is taking. But at the same time I am sure you must have read that this grant has been restored as far as HIV is concerned. That also you must have read. But our dependence is practically negligible.

Understood sir. That's helpful. And maybe a final one. You spoke about the five year plan involving R&D, M&A, in-licensing. Possible to elaborate a bit on this? What does this entail? Is this specific to India? Or exports also is a big part of this five year plan?

So I think what Satish Sir has highlighted is that we are looking at a more 5-year corporate level plan which includes both India and international. As we have earlier said, for us the focus from an M&A perspective, especially large ticket , is going to be India. And similarly in-licensing, I think India remains in focus. I think on international we already do a lot of in-licensing work especially in Canada and UK markets where we have quite a strong presence. But where we are looking at more big ticket items, it's going to be India that we look at.

Okay. And anything you want to highlight on R&D? I mean currently we would be spending say about $10-$15 million dollars on biologics, biosimilars, R&D, if I am not mistaken. So any plans to increase spends on biologics, biosimilars going forward or any ot her differentiating areas within R&D which you would like to highlight?

So our R&D spend is around 4 %-5%. And I think even going forward that is what we look at. And this includes the spend which we are doing on biologics, even some of the di fferentiated products and all. Because if you look at it, given the type of business, R&D ideally, if you look at peers should be lower but the type of work that we do leads to about 4%-5%. And that's what we would like to maintain at.

Thank you. Next question is from the line of Bharat Shah from ASK Investment Managers. Please go ahead.

I just wanted to understand the debt and cash levels?

Debt is close to INR 600 crores today, net debt. Gross is 800 and 200 is cash and net debt is 600.

And when do we think we will become more likely to become free of debt?

So outside of any sort of M&A, we think that probably within the next couple of quarters, there should be enough free cash flow generation to pare down debt in next two to three quarters max.

By Mar’26, are we likely to be cleared of all the debt? Is that what you are saying?

Yes. From internal cash flow generation, yes. To the extent that there is any sort of M &A opportunity, obviously that number could change.

Subject to M&A or any other such action. Other than that, we should be net ca sh balance sheet as on Mar’26?

Yes.

Thank you.

Thank you.

If there are no more questions, we can end the call now.

Sir, we have one question in the queue.

Okay. We can take one last question.

Yes which is from Gagan Thareja from ASK Investment. Please go ahead.

Thanks for the follow-up. One question on Canada, while this year the number will look strong because of the acquisition, is it possible to give some idea of how the like -on-like growth in Canada would have been in the quarter? And how should we think of this geography, RoW, and Europe come FY26? And also, if you could talk a little on connected players, how do you see that product evolving?

I'll take a part of your question vis -à-vis some sort of high -level guidance on the various components of the international business. So we think that Canada will continue to grow a very healthy double-digits - mid-teens sort of profile on the base business with the acquisition fully absorbed. Piyush, you may have a specific number for like -for-like for the quarter, I think that was his question.

Like-for-like is about 25%.

About 25 %-ish for the quarter, but we think that once w e have the benefit of having cross - pollinated the portfolios, a mid -teens sort of growth profile is what we're targeting for the Canadian market. For Europe as you heard , from a muted low single -digit growth, we'll be targeting a high single-digit growth for Europe. And then for the emerging market outside of the ARV segment, we think that will obviously be relatively flattish, the non-ARVs will continue to grow fairly well for us. I think it should be in the ballpark of about aiming for 20% sort of growth profile of that business.

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to the management for closing comments.

So, thank you all for joining today's investor call. If any of your queries still remain unanswered, please feel free to get in touch with us. You can write to us at investor.relations @emcure.com. Thank you and have a good night.

Thank you. On behalf of Emcure Pharmaceuticals Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.