Gland Pharma Limited analyst Q&A

The first question is from Sucrit Patil from Eyesight Fintrade.

I had a forward -looking question on Gland Pharma's long -term planning. As global pharma outsourcing grows and competition intensifies, what is Gland Pharma doing to build a strong edge, not just by expanding capacity, but by creating something deeper that makes the company hard to replace?

Yes. So if you have heard about my original comments on what we're trying to do, not just capacities on what we have today, but also building capabilities around the complex side. If you look at the growth which came from last quarter also are from the launches, what we've done on the Specialty segment, CDMO launche s that we have done, whether it's auto injectors or pen- device systems. Added to that, the complex injectable manufacturing set of what we have done, that also we are expanding into different technologies. So from manufacturing capability perspective and GLAND Gland Pharma LimitedNovember 03, 2025In Hl FY '26, adjusted for ESOP-related expense and one-off provision, the EBITDA stood atINR7,092 million, reflecting a margin of 24%. For base business, excluding Cenexi, adjustedEBITDA stood at INR7,622 million, reflecting a margin of 36%. Cenexi EBITDA losses weredown to INR530 million from INR971 million in previous year.Other income, primarily consisting of foreign exchange gains and interest earned from bankdeposits amounted to INR842 million in Q2 FY '26 and INR1,417 million in Hl FY '26.Consequently, our net profit for the quarter stood at INR1,837 million. During the quarter, weachieved a PAT margin of 12%, in line with Q2 FY '25. This is after considering the above-mentioned additional cost factors. Net profit for Hl FY '26 stood at INR3,992 million or 13%against 11% in previous year.On a standalone basis, our effective tax rate was 26% for the quarter.As of September 30, 2025, our total cash and equivalents at the group level stood at INR30,999million, including non-callable deposits of INR3,960 million. External debt at Cenexi level stoodat INR2,544 million. Cash flows from operations during Q2 FY '26 was INR3,312 million, whilefor Hl FY '26, it was INR5,933 million.Our average cash conversion cycle was 163 days for the first half compared to 172 days at theend of FY '25, largely on account of better receivable and payable management.Total capex during the first half of the financial year amounted to INR1,969 million, mainlydeployed in Cenexi for the new projects, capacity building and maintenance capex. The expectedcapex for full year FY '26 for Gland base business is approximately INR2,500 million and fornext year, it is expected to be approximately INR3,000 million. We are investing in capacityenhancement at our Pashamylaram site in cartridge fill-finish, including pen assembling andpackaging line, insulin production, powder filling line and ophthalmic suspension line.With that, I would now like to request the moderator to open the line for questions. Thank you.Moderator:The first question is from Sucrit Patil from Eyesight Fintrade.Sucrit Patil:I had a forward-looking question on Gland Pharma's long-term planning. As global pharmaoutsourcing grows and competition intensifies, what is Gland Pharma doing to build a strongedge, not just by expanding capacity, but by creating something deeper that makes the companyhard to replace?Srinivas Sadu:Yes. So if you have heard about my original comments on what we're trying to do, not justcapacities on what we have today, but also building capabilities around the complex side. If youlook at the growth which came from last quarter also are from the launches, what we've done onthe Specialty segment, CDMO launches that we have done, whether it's auto injectors or pen-device systems.Added to that, the complex injectable manufacturing set of what we have done, that also we areexpanding into different technologies. So from manufacturing capability perspective andPage 7 of 16 technology perspective, we are expanding the areas where there is an entry barrier to others to come in. Added to that, we are also entering spaces of biologics and biosimilar CDMO as well. So not just from the compliance perspective, but from manufacturing and development perspective, these are difficult areas compared to the generic portfolio, what we've be en doing for the many decades.

I had a final question in regard to margin and cost planning. As input costs and regulatory dynamics keeps on shifting. How are you planning to protect the margins? And what cost levers do you think will remain strong over the next few quarters?

If you have seen last three to four quarters, we are actually improving our margins quarter -on- quarter basis because of the initiatives we have taken both from automation of lines, also from input materials and also from the operational efficiencies’ perspective, working on the batch sizes and also looking at the bottlenecks where we can automate smaller things. So several initiatives have been taken, and if you really see from the adjusted EBITDA perspective, the base business today is around 37% EBITDA, which is more than what we have been anticipating. We're targeting around 35%, now it's 37%. And also the portf olio rationalization we have done. So one of the key aspects is how to get good ROCE. So the initiatives we are taking is on the portfolio side, which are the areas we want to enter in and focus on instead of just going after the small margin products. So the focus is on margin and EBITDA and PAT rather than just the top line. Because on a long-term basis, we think with low- margin products, especially in injectables, high -quality production, it's difficult to sustain on a long run. That's why you could see a shift on how we are looking at things moving forward on specialty products and the investments we're making towards that.

The next question is from Yash Singhee from Renaissance Investment Managers.

Sir, just wanted to ask a couple of questions on the U.S. business. So I just wanted to understand, when does the revenue pickup from cangrelor and dalbavancin is expected to kick in? And how is the ramp-up expected going on in the U.S. business going to h appen post tax? And how the margins are going to look post the ramp-up. So that was the first question.

Dalbavancin is next quarter, the goal date is this quarter. Sorry, this quarter is dalba, so the goal date is actually this month. So you'll see revenue coming from that product in this and next quarters. And initially, there will be a larger quantity pickup because of the pipeline filling and then it will normalize. Cangrelor, we have time because of the patent situation, but dalba is this quarter. From U.S. growth perspective, like we said, actually, it's been a strong quarter for U.S. If you actually break down the U.S. sales, we have grown from the product perspective almost 17%, almost 7% coming from the new launches and 10% from the products which are there before. GLAND Gland Pharma LimitedNovember 03, 2025technology perspective, we are expanding the areas where there is an entry barrier to others tocome in.Added to that, we are also entering spaces of biologies and biosimilar CDMO as well. So notjust from the compliance perspective, but from manufacturing and development perspective,these are difficult areas compared to the generic portfolio, what we've been doing for the manydecades.Sucrit Patil:I had a final question in regard to margin and cost planning. As input costs and regulatorydynamics keeps on shifting. How are you planning to protect the margins? And what cost leversdo you think will remain strong over the next few quarters?Srinivas Sadu:If you have seen last three to four quarters, we are actually improving our margins quarter-on-quarter basis because of the initiatives we have taken both from automation of lines, also frominput materials and also from the operational efficiencies’ perspective, working on the batchsizes and also looking at the bottlenecks where we can automate smaller things.So several initiatives have been taken, and if you really see from the adjusted EBITDAperspective, the base business today is around 37% EBITDA, which is more than what we havebeen anticipating. We're targeting around 35%, now it's 37%. And also the portfoliorationalization we have done. So one of the key aspects is how to get good ROCE.So the initiatives we are taking is on the portfolio side, which are the areas we want to enter inand focus on instead ofjust going after the small margin products. So the focus is on margin andEBITDA and PAT rather than just the top line. Because on a long-term basis, we think with low-margin products, especially in injectables, high-quality production, it's difficult to sustain on along run. That's why you could see a shift on how we are looking at things moving forward onspecialty products and the investments we're making towards that.Moderator:The next question is from Yash Singhee from Renaissance Investment Managers.Yash Singhee:Sir, just wanted to ask a couple of questions on the U.S. business. So I just wanted to understand,when does the revenue pickup from cangrelor and dalbavancin is expected to kick in? And howis the ramp-up expected going on in the U.S. business going to happen post tax? And how themargins are going to look post the ramp-up. So that was the first question.Srinivas Sadu:Dalbavancin is next quarter, the goal date is this quarter. Sorry, this quarter is dalba, so the goaldate is actually this month. So you'll see revenue coming from that product in this and nextquarters. And initially, there will be a larger quantity pickup because of the pipeline filling andthen it will normalize. Cangrelor, we have time because of the patent situation, but dalba is thisquarter.From U.S. growth perspective, like we said, actually, it's been a strong quarter for U.S. If youactually break down the U.S. sales, we have grown from the product perspective almost 17%,almost 7% coming from the new launches and 10% from the products which are there before. And in the previous quarter, we did mention about new contracts that we signed with GPOs that started to effect last quarter. That's what has generate another 10% growth. Where we have lost is on the milestone revenue. Milestone revenue actually we did only about INR44 - 45 crores, which is normally, we do around INR75 - 80 crores. That's a normal run rate. Combination of different factors. One is, of course, the situation in the U.S. and so people slowed down on licensing products to wait and see, that's one. Second, of course, the timing, generally, some quarters, it may be low, some quarters, it may be hig her depending on the milestone we achieved in that particular quarter. So it's more of a timing issue, which might bump up in the next couple of quarters. So I think overall, we are on track, at least in the U.S., we are doing better than we thought of.

Understood. Milestone revenues are related to enoxa and heparin. Is that correct?

No, no. milestone revenue is on the new products, what we license out to companies. And whenever we reach a milestone in terms of development or filing and approval, we'll get different milestones. So once you achieve that, you'll get that milestone revenue.

Understood. So just on the enoxa and heparin sales, if I look at the FY '23 levels, is that wrong to look at that an elevated level because of COVID or something? And is the range currently, in which we will grow, based on the last year's base, is that right understanding?

That's correct. FY '23 was a COVID year. So that's an aberration, but the growth is from the previous year. And Enoxa to Civica supply started this quarter. So it's one of the growth levers which we have mentioned last quarter.

So there is no inventory buildup issue now if that reverts, right?

No. There's no inventory build-up. There's normalcy.

The next question is from Tushar Manudhane from Motilal Oswal Financial Services.

Sir, in addition to milestone revenue, if you could also share how much has been the profit share for the quarter or the revenue share?

Quarter share is about 13%.

Okay. And sir, secondly, what explains this because the proportion of let's say, milestone and revenue share for the quarter has been broadly lesser compared to, let's say, earlier quarter or even year-on-year basis. And despite that, the gross margin of base business has been improving. If you could first sort of highlight that.

Profit share generally is around 9% to 10%. So it's because of the high -margin products what we launched last quarter, and the previous quarters, so it is a bit high 13%. So you can consider the margin of the products have improved compared to before. We s ee the contribution margin of the products are also higher compared to before, while the milestone revenue has gone down. GLAND Gland Pharma LimitedNovember 03, 2025And in the previous quarter, we did mention about new contracts that we signed with GPOs thatstarted to effect last quarter. That's what has generate another 10% growth. Where we have lostis on the milestone revenue. Milestone revenue actually we did only about INR44 - 45 crores,which is normally, we do around INR75 - 80 crores. That's a normal run rate.Combination of different factors. One is, of course, the situation in the U.S. and so people sloweddown on licensing products to wait and see, that's one. Second, of course, the timing, generally,some quarters, it may be low, some quarters, it may be higher depending on the milestone weachieved in that particular quarter. So it's more of a timing issue, which might bump up in thenext couple of quarters. So I think overall, we are on track, at least in the U.S., we are doingbetter than we thought of.Yash Singhee:Understood. Milestone revenues are related to enoxa and heparin. Is that correct?Srinivas Sadu:No, no. milestone revenue is on the new products, what we license out to companies. Andwhenever we reach a milestone in terms of development or filing and approval, we'll get differentmilestones. So once you achieve that, you'll get that milestone revenue.Yash Singhee:Understood. So just on the enoxa and heparin sales, if I look at the FY '23 levels, is that wrongto look at that an elevated level because of COVID or something? And is the range currently, inwhich we will grow, based on the last year's base, is that right understanding?Srinivas Sadu:That's correct. FY '23 was a COVID year. So that's an aberration, but the growth is from theprevious year. And Enoxa to Civica supply started this quarter. So it's one of the growth leverswhich we have mentioned last quarter.Yash Singhee:So there is no inventory buildup issue now if that reverts, right?Srinivas Sadu:No. There's no inventory build-up. There's normalcy.Moderator:The next question is from Tushar Manudhane from Motilal Oswal Financial Services.Tushar Manudhane:Sir, in addition to milestone revenue, if you could also share how much has been the profit sharefor the quarter or the revenue share?Srinivas Sadu:Quarter share is about 13%.Tushar Manudhane:Okay. And sir, secondly, what explains this because the proportion of let's say, milestone andrevenue share for the quarter has been broadly lesser compared to, let's say, earlier quarter oreven year-on-year basis. And despite that, the gross margin of base business has been improving.If you could first sort of highlight that.Srinivas Sadu:Profit share generally is around 9% to 10%. So it's because of the high-margin products whatwe launched last quarter, and the previous quarters, so it is a bit high 13%. So you can considerthe margin of the products have improved compared to before. We see the contribution marginof the products are also higher compared to before, while the milestone revenue has gone down.

And on the Cenexi side, the gross margin has been trending lower. So if you could elaborate on that aspect as well.

I think it's more to do with product mix. And then the products what you make during the shutdown, what's possible. But overall, I think if you look at the entire year, the product mix won't change much. I think it's more to do with what you produce during that quarter.

On a YTD basis, we maintained the gross margin at 74%.

Full year '26 can be considered to be 74%, 75% to be gross margin on a sustainable basis?

Yes.

Yes.

And secondly, just on this considering the number of products being approved under RTU, if you could just share how much sales may be annualized quarterly, we make from these products?

We take that offline, Tushar. You can reach out to us.

The next question is from Neha Manpuria from Bank of America.

The first question is while you mentioned that the second half would be even stronger, we had given a guidance of mid -teens for the consolidated revenue growth previously. Does that still hold? I mean, how much stronger can second half be? Because if I loo k at your first half run rate, that will imply second half being over 20% sort of growth. Do we have that kind of visibility on second half?

Yes. If you see, we have seen a growth compared to the first quarter. And then Dalba is a bigger product which we're going to be launch this quarter. 1%, 2% this way that way, but we should come closer to that.

So just to be clear on a full year basis, we still maintain the mid-teen growth guidance?

Yes. Neha, on a consolidated basis, we should be there. Maybe a few percentage here and there but should be there. As Mr. Sadu mentioned, that bigger products are planned to be launched in H2.

And how much of this would be driven by Cenexi revenue. Cenexi representing 20% growth. I think we had mentioned EUR 50 million as the revenue run rate that we want to achieve exit. So are we on track to achieve that for Cenexi?

Yes, EUR 50 million is our target from Q3.

Okay. And just an extension on Cenexi. Again, while the profit will improve, will the EUR 50 million allow us to achieve breakeven in Cenexi? Would that be a fair assumption?

Yes. That should be EBITDA positive, yes.

And on the Cenexi side, the gross margin has been trending lower. So if you could elaborate onthat aspect as well.Srinivas Sadu:I think it's more to do with product mix. And then the products what you make during theshutdown, what's possible. But overall, I think if you look at the entire year, the product mixwon't change much. I think it's more to do with what you produce during that quarter.Shyamakant Giri:On a YTD basis, we maintained the gross margin at 74%.Tushar Manudhane:Full year '26 can be considered to be 74%, 75% to be gross margin on a sustainable basis?Shyamakant Giri:Yes.Srinivas Sadu:Yes.Tushar Manudhane:And secondly, just on this considering the number of products being approved under RTU, ifyou could just share how much sales may be annualized quarterly, we make from these products?Srinivas Sadu:We take that offline, Tushar. You can reach out to us.Moderator:The next question is from Neha Manpuria from Bank of America.Neha Manpuria:The first question is while you mentioned that the second half would be even stronger, we hadgiven a guidance of mid-teens for the consolidated revenue growth previously. Does that stillhold? I mean, how much stronger can second half be? Because if I look at your first half runrate, that will imply second half being over 20% sort of growth. Do we have that kind of visibilityon second half?Srinivas Sadu:Yes. If you see, we have seen a growth compared to the first quarter. And then Dalba is a biggerproduct which we're going to be launch this quarter. 1%, 2% this way that way, but we shouldcome closer to that.Neha Manpuria:So just to be clear on a full year basis, we still maintain the mid-teen growth guidance?Ravi Mitra:Yes. Neha, on a consolidated basis, we should be there. Maybe a few percentage here and therebut should be there. As Mr. Sadu mentioned, that bigger products are planned to be launched inH2.Neha Manpuria:And how much of this would be driven by Cenexi revenue. Cenexi representing 20% growth. Ithink we had mentioned EUR 50 million as the revenue run rate that we want to achieve exit. Soare we on track to achieve that for Cenexi?Ravi Mitra:Yes, EUR 50 million is our target from Q3.Neha Manpuria:Okay. And just an extension on Cenexi. Again, while the profit will improve, will the EUR 50million allow us to achieve breakeven in Cenexi? Would that be a fair assumption?Srinivas Sadu:Yes. That should be EBITDA positive, yes.

Okay. So technically, that would mean exit third quarter, fourth quarter, we are EBITDA positive in Cenexi?

Yes. Maybe a couple of million lower than that also could bring us EBITDA positive. But for sure, if we hit EUR 50 million, then it will be EBITDA positive.

Understood. And I think in the opening comments, there was mention of new wins in Cenexi for a couple of products. If you can give some color in terms of when we should start seeing that flowing through? And also the license we talked about a $250 million build for Cenexi in the next 2 years? I mean, do we have the building blocks to get there? If you c ould give us some color on that?

Neha, we'll check that and let you know by when this commercialization will happen.

But Neha, just to add on. There are strategic initiatives that we have taken in Cenexi like head count optimization, price increases, we are creating a back office in India to support the finance and IT, the capacity enhancement and all of that. So there a re many things going on. And the whole EBITDA [loss] decreased from EUR 11 million to EUR 5 million, signals that our transformation project is on the right track, and it will continue to remain on that track.

Understood. I have 2 more questions, if I may. First, on the other regulated markets, that seems to have come up very sharply. I read that in the presentation that you had mentioned phasing. By phasing, you mean that some of the supplies have been captured in the first quarter, and I should look at the first half as a run rate or some of the supplies is likely to come in the third quarter?

So this is more one molecule timing issue in Europe that you see. Neha, this will get corrected in the quarters to come. So we had Daptomycin moving from one quarter to other.

Okay. Sir, this still comes from the second half?

Yes.

Okay. And last question on ROW. I think, Giri had mentioned that that's a big growth driver that you're looking at. We are investing in creating the portfolio. When can we start seeing momentum in the ROW business because it's clearly not evident in the last few quarters? So when does ROW start picking up for Gland?

So ROW, if you were to little split the ROW business into 2, one is the product sales, the product that we sell to our partners across ROW. That part is growing by around 19%, Neha. That part is a significant portion around, 90% or 93% of what we do in ROW is that part. But we also have our CMO product. We also do some CMO business for companies where the goods end up getting distributed the ROW. The tech transfer project. That part is going down by 53%. And therefore, the net result is a little flattish g rowth. But yes, as you said, our strategies in ROW started to work where we have seen growth across regions, Lat am, Southeast Asia, Africa, Middle East of the world. And we are happy that our product sales are growing 19% on the first half by 19%. And that to me is the industry beating growth.

Okay. So technically, that would mean exit third quarter, fourth quarter, we are EBITDA positivein Cenexi?Srinivas Sadu:Yes. Maybe a couple of million lower than that also could bring us EBITDA positive. But forsure, if we hit EUR 50 million, then it will be EBITDA positive.Neha Manpuria:Understood. And I think in the opening comments, there was mention of new wins in Cenexi fora couple of products. If you can give some color in terms of when we should start seeing thatflowing through? And also the license we talked about a $250 million build for Cenexi in thenext 2 years? I mean, do we have the building blocks to get there? If you could give us somecolor on that?Ravi Mitra:Neha, we'll check that and let you know by when this commercialization will happen.Shyamakant Giri:But Neha, just to add on. There are strategic initiatives that we have taken in Cenexi like headcount optimization, price increases, we are creating a back office in India to support the financeand IT, the capacity enhancement and all of that. So there are many things going on. And thewhole EBITDA [loss] decreased from EUR 11 million to EUR 5 million, signals that ourtransformation project is on the right track, and it will continue to remain on that track.Neha Manpuria:Understood. I have 2 more questions, if I may. First, on the other regulated markets, that seemsto have come up very sharply. I read that in the presentation that you had mentioned phasing.By phasing, you mean that some of the supplies have been captured in the first quarter, and Ishould look at the first half as a run rate or some of the supplies is likely to come in the thirdquarter?Shyamakant Giri:So this is more one molecule timing issue in Europe that you see. Neha, this will get correctedin the quarters to come. So we had Daptomycin moving from one quarter to other.Neha Manpuria:Okay. Sir, this still comes from the second half?Shyamakant Giri:Yes.Neha Manpuria:Okay. And last question on ROW. I think, Giri had mentioned that that's a big growth driver thatyou're looking at. We are investing in creating the portfolio. When can we start seeingmomentum in the ROW business because it's clearly not evident in the last few quarters? Sowhen does ROW start picking up for Gland?Shyamakant Giri:So ROW, if you were to little split the ROW business into 2, one is the product sales, the productthat we sell to our partners across ROW. That part is growing by around 19%, Neha. That partis a significant portion around, 90% or 93% of what we do in ROW is that part. But we also haveour CMO product. We also do some CMO business for companies where the goods end upgetting distributed the ROW. The tech transfer project. That part is going down by 53%. Andtherefore, the net result is a little flatfish growth. But yes, as you said, our strategies in ROWstarted to work where we have seen growth across regions, Latam, Southeast Asia, Africa,Middle East of the world. And we are happy that our product sales are growing 19% on the firsthalf by 19%. And that to me is the industry beating growth.

And this CMO is likely to remain subdued for the next few quarters since I'm assuming that tech transfer is not happening. .

So we do things for Lilly, DRL and all of that. That will also increase, but it will take a couple of quarters to come to the top.

Next question is from Bino Pathiparampil from Elara Capital.

Just a couple of questions. Maybe a little bit follow-up to earlier questions. I was looking at this overall regulated market business, this is stuck at around $95 million plus/minus rang e for last 8 to 10 quarters. Of course, you mentioned that in second half, you have some large products, so you will see some growth. But apart from that, do you have confidence that this business can grow at double digits continuously over the next 5 years? Do we have that visibility?

I think you have to look at the combination of what we do in the U.S., just not our own products what we sell, but also the complex CDMOs what we're doing. So I did mention in my previous call that from the growth what we achieved of 17% in the U.S. last q uarter, 7% actually came from the CDMO portion of the business, which we are doing for companies that are already there in that market where they did a tech transfer to our site. So in addition to the products, what is giving us growth with the new launches, what we're doing from our R&D portfolio, there's also substantial growth coming from the initiatives we're taking from the CDMO aspect. That's why you're seeing this growth com ing from the U.S. But if you really see pure generic U.S. market, it may be growing at 4%, 5%, but we're growing higher than that.

No, I'm looking at the whole regulated market business as a whole. If some when U.S. grows something else is coming off and something else grows, the U.S. comes off, and the 17% you are talking also has a huge tailwind of currency depreciation. In U.S dollar terms, the growth is not that big. So as a whole, the regulated market business piece , do we have visibility of double- digit growth over the next few years?

Yes, we do have because of some of the contracts we signed on the CDMO side for Europe market. if you're considering that also regulated, then we do have growth. We did mention about colistimethate, which is an on -market product, which we had a dedicated line, that's getting started next quarter. So that's a huge business. So if you combine all these in the regulated markets, there is a growth, and most of it is actually coming from the CDMO side of it.

Understood. Second, on this Cenexi earlier, we had a very firm guidance of breakeven in Q3. Do we still have that strong visibility? Or is it that we have a target of EUR 50 million and if we achieve that, we will break even?

No, no, we do stick to that breakeven guidance for this quarter [Q3FY26].

And this CMO is likely to remain subdued for the next few quarters since I'm assuming that techtransfer is not happening. .Shyamakant Giri:So we do things for Lilly, DRL and all of that. That will also increase, but it will take a coupleof quarters to come to the top.Moderator:Next question is from Bino Pathiparampil from Elara Capital.Bino Pathiparampil:Just a couple of questions. Maybe a little bit follow-up to earlier questions. I was looking at thisoverall regulated market business, this is stuck at around $95 million plus/minus range for last8 to 10 quarters.Of course, you mentioned that in second half, you have some large products, so you will seesome growth. But apart from that, do you have confidence that this business can grow at doubledigits continuously over the next 5 years? Do we have that visibility?Srinivas Sadu:I think you have to look at the combination of what we do in the U.S., just not our own productswhat we sell, but also the complex CDMOs what we're doing. So I did mention in my previouscall that from the growth what we achieved of 17% in the U.S. last quarter, 7% actually camefrom the CDMO portion of the business, which we are doing for companies that are alreadythere in that market where they did a tech transfer to our site.So in addition to the products, what is giving us growth with the new launches, what we're doingfrom our R&D portfolio, there's also substantial growth coming from the initiatives we're takingfrom the CDMO aspect. That's why you're seeing this growth coming from the U.S. But if youreally see pure generic U.S. market, it may be growing at 4%, 5%, but we're growing higher thanthat.Bino Pathiparampil:No, I'm looking at the whole regulated market business as a whole. If some when U.S. growssomething else is coming off and something else grows, the U.S. comes off, and the 17% youare talking also has a huge tailwind of currency depreciation. In U.S dollar terms, the growth isnot that big. So as a whole, the regulated market business piece , do we have visibility of double-digit growth over the next few years?Srinivas Sadu:Yes, we do have because of some of the contracts we signed on the CDMO side for Europemarket, if you're considering that also regulated, then we do have growth. We did mention aboutcolistimethate, which is an on-market product, which we had a dedicated line, that's gettingstarted next quarter. So that's a huge business.So if you combine all these in the regulated markets, there is a growth, and most of it is actuallycoming from the CDMO side of it.Bino Pathiparampil:Understood. Second, on this Cenexi earlier, we had a very firm guidance of breakeven in Q3.Do we still have that strong visibility? Or is it that we have a target of EUR 50 million and if weachieve that, we will break even?Srinivas Sadu:No, no, we do stick to that breakeven guidance for this quarter [Q3FY26],

The next question is from Abdulkader Puranwala from ICICI Securities.

So my first question is with regards to your R&D expense going up this quarter to roughly, say, 6% of the top line. So if you could highlight where that expense is exactly getting invested into?

If you see filings, there are 6 filings which happened during the quarter and also the complex portfolio, what we're handling. So that's a bit more expensive compared to generic product what we produce. It's a combination of these two.

Okay. So I mean, should we account this as a kind of a onetime and then it moves back to that roughly 4%, 5% range, what you normally do?

Yes, roughly, we always say around 5% on an annual basis, it should be around that.

Okay. And sir, my second question is with regards to the progress on GLP -1 capacity and biologics. So sir, any comments on how the traction is building in terms of getting new customers for your additional capacity? And on the biologics side, in past, I think we announced something for Dr. Reddy's. So where are we on that as well?

So on the GLP side, as I mentioned, we have launched the first partner GLP-1, liraglutide. And we have 40 million capacity up and running, building another 100 million. So by mid of next year, we'll be having 140 million capacity on cartridges, which makes us one of the top tier capacities here. On GLP -1, on the cartridge line, we are also importing opportunities beyond GLP-1. Two more contracts are getting signed on the GLP -1. We will, of course, tell you guys when it's signed. On the biologics, the DRL revenue has started to -- we have started reporting the DRL revenue this quarter onwards. And as we go further that arrangement is solid. And we know the whole biologics plant st arted to give us revenue. We also have intent to increase the capacity in the biologics plant from 8 KL to 23 KL and that collaboration's discussions going on with companies in India and outside of India.

Okay. So with the revenues for DRL, which segment are we exactly recording right now? .

So we have not any separately segment we are recording. It's in the normal revenue it is coming. We have only one segment as of now.

I'm talking with regards to your markets like U.S., Europe, other core markets or ROW where exactly that gets captured?

Currently, it is India only.

Next question is from Aman Goyal from Axis Securities Limited.

My question is related to U.S. business. Can you just elaborate the difference between price erosion and the volume uptick in the U.S. -based business and contribution from the new products?

Price is almost flat if you compared to the previous quarter. It's no variance. Quantity, 10% and new launch is 7%.

The next question is from Abdulkader Puranwala from ICICI Securities.Abdulkader Puranwala:So my first question is with regards to your R&D expense going up this quarter to roughly, say,6% of the top line. So if you could highlight where that expense is exactly getting invested into?Srinivas Sadu:If you see filings, there are 6 filings which happened during the quarter and also the complexportfolio, what we're handling. So that's a bit more expensive compared to generic product whatwe produce. It's a combination of these two.Abdulkader Puranwala:Okay. So I mean, should we account this as a kind of a onetime and then it moves back to thatroughly 4%, 5% range, what you normally do?Srinivas Sadu:Yes, roughly, we always say around 5% on an annual basis, it should be around that.Abdulkader Puranwala:Okay. And sir, my second question is with regards to the progress on GLP-1 capacity andbiologies. So sir, any comments on how the traction is building in terms of getting new customersfor your additional capacity? And on the biologies side, in past, I think we announced somethingfor Dr. Reddy's. So where are we on that as well?Shyamakant Giri:So on the GLP side, as I mentioned, we have launched the first partner GLP-1, liraglutide. Andwe have 40 million capacity up and running, building another 100 million. So by mid of nextyear, we'll be having 140 million capacity on cartridges, which makes us one of the top tiercapacities here. On GLP-1, on the cartridge line, we are also importing opportunities beyondGLP-1. Two more contracts are getting signed on the GLP-1. We will, of course, tell you guyswhen it's signed. On the biologies, the DRL revenue has started to — we have started reportingthe DRL revenue this quarter onwards. And as we go further that arrangement is solid. And weknow the whole biologies plant started to give us revenue. We also have intent to increase thecapacity in the biologies plant from 8 KL to 23 KL and that collaboration's discussions going onwith companies in India and outside of India.Abdulkader Puranwala:Okay. So with the revenues for DRL, which segment are we exactly recording right now? .Ravi Mitra:So we have not any separately segment we are recording. It's in the normal revenue it is coming.We have only one segment as of now.Abdulkader Puranwala:I'm talking with regards to your markets like U.S., Europe, other core markets or ROW whereexactly that gets captured?Ravi Mitra:Currently, it is India only.Moderator:Next question is from Aman Goyal from Axis Securities Limited.Aman Goyal:My question is related to U.S. business. Can you just elaborate the difference between priceerosion and the volume uptick in the U.S.-based business and contribution from the newproducts?Srinivas Sadu:Price is almost flat if you compared to the previous quarter. It's no variance. Quantity, 10% andnew launch is 7%.

Okay. And sir, what is the update on RTU, how much market share we are targeting for consolidated RTU?.

Generally, in the RTU products -- I mean, any product, you start with 15% or so till the contract opens. But if it's already available in the market, it's easier. But otherwise, you have to create that market. So several products which are already there, initially it's around 15%, 20%, and then it will increase once the GPO contracts opens. And you see our top 20 products, almost I would say 80% of the products we have a market share of 25% and above. So we should assume that we will get there sooner or later. Some, we also have like 40% market share.

The next question is from Rahul Jeewani from IIFL.

Sir, I had a question with respect to the base business ex Cenexi. Now if we see our base business ex Cenexi has been flat for past 5, 6 quarters. Now listening a year back, we had guided to a mid-teen’ kind of growth on the base business as well. But given the muted trends which we are seeing on the base business, apart from the ramp-up, which we expect in second half because of a couple of new launches like dalbavancin, can you provide some outlook in terms of how the base business growth would be going into '27, '28. So that's my first question?

Although we are flat overall, but on the U.S. side, we grew by 8%. So let me give you some more data on our U.S. business. Our top 20 molecules on YTD basis have grown by 9%. Our top 10 molecule on YTD basis has grown by 14%. Our customers are intact. Our top 10 customers in the U.S. grown by around 19%, so yes, U.S is where we are growing. We have talk ed about the decline RoW. Though, in RoW own products sales we are growing 19% YTD. But on the CMO side in ROW, we have degrown 53% which again will get corrected from an overall standpoint. So having said that, our base business and given all the R&D launches or the new product launches, we are confident that we will grow.

And just to add to this, if you see, we have been investing into the capex, including the pen assembly line, fill and finish of cartridges, insulin products and powder filling and ophthalmic suspension. So all these portfolios of complex products would help us to have a growth in rest of the world market and the regulated market as well. So put together, we are confident of achieving a mid-teens growth [at consolidated level] in coming couple of years.

Sure, sir. So this mid-teen growth guidance, which we have for '26, obviously, there is a currency benefit of Cenexi sitting in there. So Cenexi in first half of this year has grown 30% in INR terms. But if I look at the constant currency growth for Cenexi, that's around 10%. So this year again, has been muted if you ex out the currency benefits. So yes, some better visibility, clarity in terms of what would help us to achieve this mid-teen kind of a growth going forward would be helpful?

Okay. And sir, what is the update on RTU, how much market share we are targeting forconsolidated RTU?.Srinivas Sadu:Generally, in the RTU products — I mean, any product, you start with 15% or so till the contractopens. But if it's already available in the market, it's easier. But otherwise, you have to createthat market. So several products which are already there, initially it's around 15%, 20%, and thenit will increase once the GPO contracts opens.And you see our top 20 products, almost I would say 80% of the products we have a marketshare of 25% and above. So we should assume that we will get there sooner or later. Some, wealso have like 40% market share.Moderator:The next question is from Rahul Jeewani from IIFL.Rahul Jeewani:Sir, I had a question with respect to the base business ex Cenexi. Now if we see our base businessex Cenexi has been flat for past 5, 6 quarters. Now listening a year back, we had guided to amid-teen’ kind of growth on the base business as well. But given the muted trends which we areseeing on the base business, apart from the ramp-up, which we expect in second half because ofa couple of new launches like dalbavancin, can you provide some outlook in terms of how thebase business growth would be going into '27, '28. So that's my first question?Shyamakant Giri:Although we are flat overall, but on the U.S. side, we grew by 8%. So let me give you somemore data on our U.S. business. Our top 20 molecules on YTD basis have grown by 9%. Ourtop 10 molecule on YTD basis has grown by 14%. Our customers are intact. Our top 10customers in the U.S. grown by around 19%, so yes, U.S is where we are growing.We have talked about the decline RoW. Though, in RoW own products sales we are growing19% YTD. But on the CMO side in ROW, we have degrown 53% which again will get correctedfrom an overall standpoint. So having said that, our base business and given all the R&Dlaunches or the new product launches, we are confident that we will grow.Shriniwas Dange:And just to add to this, if you see, we have been investing into the capex, including the penassembly line, fill and finish of cartridges, insulin products and powder filling and ophthalmicsuspension. So all these portfolios of complex products would help us to have a growth in restof the world market and the regulated market as well. So put together, we are confident ofachieving a mid-teens growth [at consolidated level] in coming couple of years.Rahul Jeewani:Sure, sir. So this mid-teen growth guidance, which we have for '26, obviously, there is a currencybenefit of Cenexi sitting in there. So Cenexi in first half of this year has grown 30% in INRterms.But if I look at the constant currency growth for Cenexi, that's around 10%. So this year again,has been muted if you ex out the currency benefits. So yes, some better visibility, clarity in termsof what would help us to achieve this mid-teen kind of a growth going forward would be helpful?

So a couple of large projects are, like we mentioned, the Dalbavancin project. The other is the CMS project, what we just got approved. That's a large project where it's on-market product tech transfer from Xellia, that's almost INR150 crores project. So that's a larger one.

Sure, sir. And on the GLP-1 portfolio, while you have commercialized liraglutide with a partner, when do you expect your sema launches to begin across markets? And at least our earlier expectation was that the incremental 100 million while capacity or cart ridges capacity, which you are putting up would largely bring from a regulated market perspective. So just in terms of sema launches across EM and ROW markets, and what kind of visibility you have right now for utilization of the initial 40 million capacity? .

So we have one contract already, two in line, three total. We are also looking at more contracts in GLP. So our 40 million capacity, which is currently is now kind of filled up. Now the 100 million capacity that we're building second half of next year, is where we'll start selling that capacity. We're already in talks with many companies, Indian companies for the global market, global companies for global market. So yes, we have positioned ourselves as a top -tier GLP capacity company and a lot of RFPs and a lot of discussions happening today.

Rahul, what we have signed off is three earlier, right, and two more under discussion. Out of the 3 filed products, as you know, sema opens up next year in some markets. So it will start supplying to those markets if they get approval, ultimately, it's the CDMO business. Once they get approval in those markets, we start supplying. As everybody knows, these are the -- other than Canada and India, there are a couple of other non -regulated markets where the supplies will start too, once approvals come. But until that time, majority of the contracts are signed on the exhibit batches and all that, of course, lira is also going from the same line. But the majority of the market comes only till '30, right? I mean the sema. But all the semi-regulated in Canada will start next year once our partners get approved in this market.

Sure, sir, just a follow -up on that. So let's say, this 40 million capacity, the initial capacity. So you are confident of utilizing this entire capacity let's say, by FY '28 because by FY '28, we would be in 2 years of Sema launches across these markets.

Correct. It's a combination of lira, sema, a few other projects that we're working on that, but it will utilize -- at least it will take 2 years to ramp-up from early next year.

Sure, sir. Thank you. That’s it from my side.

Thank you very much. That was the last question in queue. I would now like to hand the conference back to the management team for closing comments.

So a couple of large projects are, like we mentioned, the Dalbavancin project. The other is theCMS project, what we just got approved. That's a large project where it's on-market product techtransfer from Xellia, that's almost INR150 crores project. So that's a larger one.Rahul Jeewani:Sure, sir. And on the GLP-1 portfolio, while you have commercialized liraglutide with a partner,when do you expect your sema launches to begin across markets? And at least our earlierexpectation was that the incremental 100 million while capacity or cartridges capacity, whichyou are putting up would largely bring from a regulated market perspective.So just in terms of sema launches across EM and ROW markets, and what kind of visibility youhave right now for utilization of the initial 40 million capacity? .Shyamakant Giri:So we have one contract already, two in line, three total. We are also looking at more contractsin GLP. So our 40 million capacity, which is currently is now kind of filled up. Now the 100million capacity that we're building second half of next year, is where we'll start selling thatcapacity.We're already in talks with many companies, Indian companies for the global market, globalcompanies for global market. So yes, we have positioned ourselves as a top-tier GLP capacitycompany and a lot of RFPs and a lot of discussions happening today.Srinivas Sadu:Rahul, what we have signed off is three earlier, right, and two more under discussion. Out of the3 filed products, as you know, sema opens up next year in some markets. So it will startsupplying to those markets if they get approval, ultimately, it's the CDMO business.Once they get approval in those markets, we start supplying. As everybody knows, these are the— other than Canada and India, there are a couple of other non-regulated markets where thesupplies will start too, once approvals come.But until that time, majority of the contracts are signed on the exhibit batches and all that, ofcourse, lira is also going from the same line. But the majority of the market comes only till '30,right? I mean the sema. But all the semi-regulated in Canada will start next year once our partnersget approved in this market.Rahul Jeewani:Sure, sir, just a follow-up on that. So let's say, this 40 million capacity, the initial capacity. Soyou are confident of utilizing this entire capacity let's say, by FY '28 because by FY '28, wewould be in 2 years of Sema launches across these markets.Srinivas Sadu:Correct. It's a combination of lira, sema, a few other projects that we're working on that, but itwill utilize — at least it will take 2 years to ramp-up from early next year.Rahul Jeewani:Sure, sir. Thank you. That’s it from my side.Moderator:Thank you very much. That was the last question in queue. I would now like to hand theconference back to the management team for closing comments.

Thank you all for joining us today. We appreciate your participation in the question-and-answer session during the call. If you have any follow -up questions, please feel free to reach out to us. We look forward to connecting with you again next quarter. Thank you.

Thank you very much. On behalf of Gland Pharma Limited, that concludes the conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines. This transcript is provided without express or implied warranties of any kind and should be read in conjunction with the accompanying materials published by the company. The information contained in the transcript is a textual representation of the company's event and while efforts are made to provide accurate transcription, there may be material errors, omissions, or inaccuracies in the reporting of the substance of the event. The transcript has been edited wherever required for clarity, correctness of data, or transcription error. The company takes no responsibility for such errors, although an effort has been made to ensure a high level of accuracy. GLAND Gland Pharma LimitedNovember 03, 2025Thank you all for joining us today. We appreciate your participation in the question-and-answersession during the call. If you have any follow-up questions, please feel free to reach out to us.We look forward to connecting with you again next quarter. Thank you.Shriniwas Dange: Thank you very much. On behalf of Gland Pharma Limited, that concludes the conference.Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.Moderator: This transcript is provided without express or implied warranties of any kind and should be read in conjunction with theaccompanying materials published by the company. The information contained in the transcript is a textual representation ofthe company's event and while efforts are made to provide accurate transcription, there may be material errors, omissions, orinaccuracies in the reporting of the substance of the event. The transcript has been edited wherever required for clarity,correctness of data, or transcription error. The company takes no responsibility for such errors, although an effort has beenmade to ensure a high level of accuracy.