Thank you. We will now begin for the question -and-answer session. The first question is from the line of Damayanti Kerai from HSBC.

My first question is on your comment around gain from currency depreciation during the quarter. So if you can just quantify how much was that? And excluding that, what kind of growth you would have recorded?

So Damayanti, currency depreciation sits in the -- goes into the multiple part of the P&L. So in a normal business case, whatever the revenue and in terms of the changes converting that revenue from that geography into the rupee term, that goes and sits in the normal EBITDA side. And if you see on an exceptional item, there is a currency difference of INR7.3 crores which is only on exceptional items. So out of exceptional item, INR177.8 crores is due to the labor court and balance INR77 -- sorry, INR7 crores is because of the exceptional item. And so it sits into the multiple part of the businesses, and it's difficult to actually quantify that.

Okay. My second question is on the Flovent status from the FDA. So since your last communication, have you heard anything incremental? And when do you expect the agency to come back with its decision?

So all I can say is we've had multiple discussions with the agency, and we are very close to -- we're hoping we'll get an approval very quickly on Flovent 44.

Glenn, you mentioned respiratory will be significant in the fourth quarter. So Flovent will be part of that?

We are hoping that Flovent is part of it, but we also have the nasal spray and various other products in the respiratory franchise, which could get approved in Q4.

Okay. And my last question is on your working capital management. You mentioned 115 days is something which you are targeting by March '26. So in terms of key changes and progress if we can walk like what are the key initiatives and how things are shaping since last quarter when we had some write -offs, et cetera. So if you can just and talk a bit about your working capital management part?

Yes. So Damayanti, we have initiated multiple options basically. So one was on the sales side, basically to get the debtors reduced and that is through the factoring and some of the other instruments. So including the other market like Europe and LatAm, wh ich we were not doing again, and which obviously at a -- we will be very cost conscious on this part. So that's one on the sales side. And similarly, on MSME and vendor side also, we are trying to elongate the payment cycle. So the RBI -related legitimate channels, which include vendor financing and some of the vendor bill discounting sort of thing, which will help us to move both on the sales side as well as on the purchase side to reduce the working capital cycle.

Okay. Against December, where do you stand against this target of 115 days?

Right now, we are actually, again, lower than 115 days. But as the business activities increase, that's why we are keeping. But right now, we are close to 110 days.

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

Sir, on Monroe now that U.S. FDA issues are behind. So how do we -- what would be the sort of trajectory in terms of business? I guess, product approvals are still not come. So how do we start the commercial products?

So I think we will start commercial production in this quarter. And we have 1 or 2 approved products, so we will start commercializing that next year, you can anticipate we will sell about 3 products with a number of filings, right, next year. And I think the way to think about Monroe is it's -- it will take some time, right, for the site to be fully -- in full flow, right , in terms of commercial production. And at the operating level about, I would say, about 4 years, right, from today, we will breakeven at the operating level.

And also, how do you intend to increase the number of filings from this side maybe over the next 12 to 15 months?

I think every year, we will have at least 3 -odd filings, right, from the site. And we are working specifically on very complex injectables, right? So we're not doing any run-of-the-mill products. So that will further enhance the filings.

Got it sir. And sir, secondly RYALTRIS you highlighted it's $100 million product now, major geographies and their contribution, let's say any geography which is contributing more than 10%, 15%. If you could just rephrase that?

It's pretty broad-based. So Europe, obviously, is a big driver, along with some leading emerging markets like Russia, Australia and multiple other countries, right, which -- where the bulk of the sales are coming from. But I think it's pretty broad-based overall. So there's no country which is more than -- no geography, which is more than 20%, 25% of sales, somewhere thereabouts.

Got it, sir. And lastly, on gross margin, like if I exclude the out -licensing income, the gross margin, while its highlighted that it's a product mix, but is there anything further because without the out-licensing income, the gross margin is much lower at 65%?

So it's largely because of the product mix and geographical mix because of that. I think -- but I think we are on track. I think we should be on -- I think you will see a recovery on this. And what we see our guidance is the overall at EBITDA level, we are on track to deliver our guidance of 23% on a sustainable basis.

Also just one point on gross margin. If we get these new product approvals, right, in Q4, you will see a definite uptick in the gross margin.

Got it sir. And sir, just a request and a suggestion that if you could put the R&D expense in the presentation or the press release itself, given that it's a core sort of for Glenmark Pharma, it would if you are putting it in the opening commentary in the presentation.

Sure, Tushar. And just to reiterate to R&D for this quarter was INR290 crores, total R&D.

The next question is from the line of Kunal Randeria from Axis Capital.

Glenn, in Europe, you have shown a rupee growth of around 9%. But I think the currency appreciation. I mean -- sorry, rupee depreciation would be around 15%? So do you decline in constant currency in Europe?

See, I think Europe, the way to think about Europe is we've had a phenomenal last 3 years or 4 years, right? I mean, the business has done exceedingly well, if you look at our European business, right? Given that the first half, we've had some challenges in terms of growth, right, in the first half. Going forward, I think Europe, you should expect like a single-digit to low-double- digit growth from here, right, given that we've grown our 25% CAGR over the last 3, 4 years.

Sure. But I think you had earlier mentioned that maybe in the medium term, it can grow in double digits. So is it because launches are a bit slow. See, '26, I can understand from a base of '25, but about FY '27, '28. Can you still grow in double digits?

I think we can grow double digit in Europe. I mean the key is we are waiting for some new product approvals, right? I mean, for example, in F '27, we should have at least a couple of respiratory product launches, right, which should drive Europe. Also, RYA LTRIS, we should see some incremental growth coming in Europe in F '27 and beyond. So overall, the business and WINLEVI also will contribute, right? I mean we're just launching WINLEVI in U.K. and in Europe. So overall, the business should continue to do well, right? But I mean, just to be conservative, we are seeing high single digit to low double digit, right, growth for Europe going forward.

Increasing contribution of branded market will aid to this actually.

Fair enough, fair enough. Sir, secondly, on the ISB product at 830 and 880, and I see both products are progressing well now. So can you share what can lead to milestone payments for you?

We don't give any visibility to specific milestones, right, as a company. I mean, we've stayed away from that. So I think look, I think the takeaway message is we have 3 innovative assets all progressing well in the clinics, right? So 2001 continues to do well for us. Additionally, 880 with Almirall starting the Phase II, that's an exciting asset. And then, of course, 830, right? So I mean, we have these 3 assets in the clinics. And hopefully, this year, by the end of this calendar year, we'll have 2301 also going into the clinics, right? And we have a good pipeline of innovative assets from here on, right? But I think from a commercial perspective, the way to think about it is the next 5 years, right, will highly -- will be contributed by these 7, 8 innovative assets, right? The Hansoh, Hengrui, envafolimab, Ryaltris, WINLEVI, TEVIMBRA, BRUKINSA, I mean these are the next 5 years. And then post that, the following 5 years, will be all about 2001 and some of these immunology assets and some of the rest of our portfolio. So I think that's the next 10 -year journey right for the company, right, on the innovation side.

Sure. And just one more if I can. You have increased your filing pace in the U.S. So can I ask for which plants are you doing the filings? Because Indore, Baddi, Goa still I think in the regulatory scanner?

So I think the way to think about our U.S. business is there are 2 plants, Aurangabad and Monroe, right, where the bulk of our filings are coming out of. Goa and Indore are under warning letter. So we've tech transferred some of the products to some U.S. C MOs. And I mean we got a sucralfate suspension approved which was from one of the warning letter sites. And likewise, we have some other products which are tech transferred to U.S. CMOs. Baddi, we have completely discontinued U.S. commercialization and filings.

The next question is from the line of Saion Mukherjee from Nomura.

Just some numbers. This INR290 crores of R&D, if you can split between Ichnos and the rest of the business?

So around 50% was out this was IGI-related.

Okay. Okay. The second one was regarding your other expenses, which seem to have come off on a year -on-year basis despite currency depreciating impacting costs in many of your international markets. So if you can give some color on why the other expense is coming down? And how should we think about that going forward?

So other expenses broadly remains in line, but you see on a quarter-on-quarter basis sometimes because of approval and the phasing of the expenses sometimes it goes lower. But I think, overall, we should see inflationary related impact on the other expenses. So this quarter, it looks lower, but I think it's more a phasing and booking issues.

Okay. And then final, sir, if I can ask on -- if you can share the net cash number and also the capex that you have done for this year, both tangible addition and intangible addition fees?

So capex in this quarter was around INR215 crores, and YTD capex was INR715 crores. And on this quarter, capex, around 55% was on intangible and 45% was tangible. So that's what the broadly capex number was. On net cash, if you see, we remain net cash positive. And in fact, the gross debt was close to around INR100 crores, and net cash was also close to INR600 crores. In fact, we had a large payment in this quarter of around INR125 crores, which includes IGI tax, dividend, we have paid -- we had a capex amount. So that's -- despite that, actually, we remain on cash -- overall net cash positive.

So sir, what is the number, sir, sorry? Net cash number is it?

Around INR600 crores.

Net cash is INR600 crores?

Saion, gross debt is about INR600 crores. And the net cash is...

Net cash is also INR600 crores, around INR1200 crores of cash.

Okay. Okay. And just in terms of your future liabilities, if you can, what should we sort of pencil in because some of the licensing deals that you've done from various companies in the recent past and also some liabilities related to litigation, if you ca n have some visibility for this year, next year, how should we think about payouts that if we have to factor in?

So I think just a couple of things, right? On the legal settlements, obviously, Saion, we can't give too much of visibilit,right. However, if you look at the MDL, right, we have done a settlement with the DPPs. That's public information, right? And we stil l have some of the other classes to go, right, which is mainly the AGs and the EPPs, right, on the MDL, which is probably the largest right now in terms of legal cases. So that's on that side. On the innovation side, with us doing these 3 transactions, right, the Hengrui transaction, obviously, some of it is built into the intangible number that Anurag mentioned. And Aumolertinib, we are still in the process of paying that. I think that is the...

So timing -wise, it could be this quarter or it could be early next quarter. I think because it's difficult to actually give you that specific because it depends on the commercial progression of the deal. But I think it could be somewhere at the end of this quarter, early next quarter accordingly.

And then going forward, beyond that, Saion, the next big milestones are all linked to the launches of these products, but we don't anticipate any big amounts being paid on any 3 of these assets, right? So I think that's kind of where we stand. It's more ba ck ended, royalty-based and sales- linked milestones and -- which are the drivers to the numbers.

The next question is from the line of Krish Mehta from Enam Holdings.

I have 2 questions. The first is on your specialty business. The 7, 8 innovative assets which Glenn mentioned earlier. So if you could just broadly directionally tell us in terms of how the gross margin level would differentiate from the rest of our portfo lio in these 7, 8 innovative assets, including the ramp -up you see in RYALTRIS and where you can see the gross margin eventually settle as we scale up these 7, 8 assets?

I think that's a very good question. Look, see, oncology assets, the gross margins are significantly higher than where we are today, right, the core business, right? So I think more than the gross margin is also the EBITDA margins will be significantly hig her. So there will be a definite margin uplift, right? I would anticipate a lot of this will start playing up from FY '28, not '27. By '28, you'll have Aumolertinib fully commercialized in many, many markets as well as the Hengrui assets starting to commercialize in some of the markets by F '28. So I think the real uplift in the margin profile of the company will happen from the curren t 23-odd levels, right, will happen from F '28 onwards.

Okay. No, that's helpful, Glenn. And if you could throw some light on how the Ichnos quarterly revenue and cost will be accounted for going forward in terms of how we're recognizing the AbbVie payments. If you could just explain on the accounting for the next few quarters, revenue and cost, both?

So on the revenue side, whatever, as you recall, the upfront payment, which we got, we booked INR525 million last quarter -- last quarter, and now there will be equalized run rate of $17.5 million every quarter. On expenses side, we get a reimbursement, but which -- reimbursement be netted off and goes into the other expenses. So that does not impact the top line and bottom line simultaneously. So that actually gets netted out as per the reimbursement part and the other expenses.

That's very helpful. And my last question was what will be the number for this Ichnos quarterly revenue? I mean, the Ichnos quarterly cost that we spend going forward for the next 3 to 5 years?

So we've guided to a $70 million run rate, right, in terms of bond for IGI, right. Annualized $70 million, so we'll stay within that.

And we are booking the exactly $17.5 million per quarter, which is again $70 million every year. So that's how we are booking the revenue also. On expenses...

The next question is from the line of Sucrit Patil from Eyesight Fintrade Pvt Ltd.

I have 2 questions. My first question is to Mr. Glenn, is across Glenmark's core business. You have spoken extensively about the portfolio focus and therapeutic priorities. Just want to understand the key trade -offs you are currently making between investi ng behind scale in established markets versus nurturing newer therapies in newer areas? And what integral -- internal signals would you lead to rebalance the capital or the management attention between these 2 sectors? That's my first question. I'll ask my second question after this.

So I mean, Glenmark, we've always been therapy focused, right? Unlike many of our peer companies, we are focused on these 3 areas, right, derm, respiratory, oncology. And I don't think it's that easy to switch areas, at least for us, because we have built deep expertise starting from R&D right up to commercialization in these 3 areas, right, which actually is a competitive advantage for us. That's the way we view it. So I think given that our -- given the expertise that we've built in these 3 areas, we are now expanding our EM franchise, right, India and emerging markets in terms of commercialization with a clear view that longer term, as we get more innovative assets, we could continue to move up the value chain into much some of the developed markets as we go forward. So I mean, the capital allocation between the therapy areas versus getting into newer areas doesn't exist for Glenmark because we built our business basis that, at least for now, right? And that's the next 5 to 10 years, we will continue to focus on the ar eas that we have defined for ourselves.

My second question to Mr. Mantri. Beyond high level margins and cost commentary, what are the key early indicators you track internally across pricing, product mix and working capital that give you confidence on profitability and cash flow sustainability b efore these trends reflecting the reported results?

So good question, basically, what we track, and this is very critical for us because especially when we are operating in emerging markets and across the markets. So we track closely our working capital one is that on a debtors and inventory side because th ese market consumes a large working capital requirement and also on the purchase side. So actually, how to bring the working capital cycle more efficient and reduce this cycle. So if you see industry has been maintaining almost operating at 125, 130 days, but we are targeting 115 days this year, and then we will continue to improve -- work on the improvement further. So this is what we closely track, debtors, inventory, creditors days and how to actually improve with the -- with the various instruments, but at a more sufficient cost manner.

Thank you and best of luck for the next quarter.

The next question is from the line of [Zahid Kirani 0:45:32] from Khandwala Securities.

I would like to ask that what is the planned capex for the next fiscal year? And what are the strategic motives behind it?

I think the capex typically is around running at around INR700 crores, INR800 crores a year.

You should see the same INR800 crores is the capex for next year. Actually next year, we should see.

So that's the way to think about it. And I think the investment is all going into, one, is ongoing capex, right, in terms of plants, expanding our current lines and various facilities, right? That's the bulk of it.

And Hengrui...

And some of the in-licensing product.

The next question is from the line of Tarang from Old Bridge Capital. Sorry to interrupt, Tarang, we are not able to hear you. Can you speak a bit louder? Tarang Agrawal Just a bookkeeping clarification. The net cash as on 31st December '25, is over and above what you've reserved at Ichnos or this is on a consolidated basis?

So cash is at a consolidated basis. Basically, Ichnos money we actually keep utilizing as per their phasing requirement. So it's not that we keep that cash separately. So it's a consolidated number, which I told you on that INR600 crores of net cash.

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

Just one question. Sir, any of the assets now where there is a further scope of the deal, at least from the current assets or probably any new asset that can come up, let's say, over the next 6 to 9 months?

So Tushar, I can't give you any visibility to further partnering right now. But all I can say is the [inaudible 0 48:06] yes, go ahead.

No, I meant to ask that at least the products which are already sort of out-licensed to the partner. So is there a scope for getting more partners for such product firstly?

Look, there is always scope, Tushar, right? I mean, on each of these assets, right? We can always look for some regional partnerships, some smaller partnerships. I mean it can go on and on, right? But I think it's not right to give any visibility around partnering , right, on each of the assets. One is that we already have and even subsequent assets, right, that we are developing, like 2301 and beyond, right? All of them can be partnered at any point in time. Our bigger challenge for us is that what is the optimal time to do any of these partnerships? And do we really need to do it? Because otherwise, we end up giving up too much if we do it too early.

The next question is from the line of Damayanti Kerai from HSBC.

Glenn, I have a question on this ISB 2001 asset. So you're still conducting and enrolling patients for TRIgnite studies, right? So just want to understand when this R&D and clinical trial responsibility will be going to the partner? Or you will complete th e TRIgnite and like how things work there?

So unfortunately, I can't give you too much visibility on our relationship with AbbVie, right? But all we're saying is the dose expansion will end, and we will -- we've made significant progress with the dose expansion. And I think any further information you will see in some public communications as and when we are ready to put it out.

Sure. And my second question is again, yesterday, during the budget speech, I guess there was emphasis on biomanufacturing production in India by the finance investor. Any initial thoughts because I guess you were emphasizing on oncology and other FCD trea tments, et cetera. Since you are, I think, focused in these segments, so any thoughts here?

So currently, we don't do any manufacturing of biologics within Glenmark, right, in-house. We continue to outsource a lot of our -even a lot of our biologic manufacturing, right? However, I mean we never know how things play out in the future. So it's defi nitely a positive for the industry.

The next question is from the line of Nitin Agarwal from DAM Capital.

Glenn, on 2 businesses, one is in the U.S. U.S., obviously, with a couple of recipe approvals you talked about likely coming through this year in the next few quarters. And you talked about some of the first to files, which will probably come towards the end of the year. So that probably give us decent visibility on '27, '28 growth in the U.S. Now how should we think about U.S. subsequently? I mean, are these sort of one -off drivers which come in and business gets to a base, a relatively high base? And then how should we think about U.S. subsequently from here on? I mean, after these are sort of drivers in the business?

So I think the way to think about it is '27 is all about Flovent -- Flovent 44 and maybe one more strength of Flovent and the 3 -- out of the 3, at least 2 sole FTFs right, coming on to the market in the second half of F '27. '28 and beyond, we will see some of the Monroe approvals, injectable approvals starting coming through as well as the additional respiratory filings that we're doing over the next 12 to 18 months, right, which, again, are super complex and difficult, right? So I think these are the 2 main drivers to the U.S. business from '28 and beyond, right, as we go forward.

And Glenn, on the recipe filings, when you say these are complex filings. So by when do you think you'll be probably able to be the first of these filings beyond Flovent?

It's probably happening in the next 3 to 6 months.

Okay. Okay. And secondly, on the emerging market business. There has been some slowdown this year. But how -- you talked about Europe being a slightly slower sustainable growth from here on? How should we going about the emerging market piece?

So emerging markets next year should be a strong year for EM, okay? And the core business, we see some significant growth plus, of course, with the launch of this Aumolertinib, right, in the second half of next year, right, starting from then EM should be a significant driver, right, over the next 5 years for the company.

So this is what like a 15%, 20% growth business on a compounding basis or like a 10%, 15% compounding business? How do you...

If you see on a 5-year basis, it's north of 20%, very clearly, CAGR.

Going forward. Okay. Okay. Okay. And lastly, Glenn, on the specialty business. So RYALTRIS obviously scaled up to close to $100 million as you talked about. Ex of RYALTRIS, when do you -- how meaningful -- when do you see the other launches start to become meaningful for us, say, $50 million to $100 million bracket collectively when do they get there?

See, RYALTRIS is currently growing at 25%, 30%, right, top line. So it's still -- the growth numbers are still very strong in the existing markets. Over and above that, we're still waiting for the Chinese launch to happen coming up. We're expecting a Brazilian approval coming through. So there are still a number of markets where it's still not commercialized, right? So I think getting up to $200 million, $250 million is not going to be a huge challenge for us, right, over the next 3 to 5 years.

And on the ex RYALTRIS portfolio, when do you think it starts to become meaningful?

Sorry, say that again?

Ex RYALTRIS.

Ex RYALTRIS innovative portfolio. Is that what you're talking about?

Yes. I mean, when does this start to become meaningful? Is it $50 million plus thereabouts in the range overall?

I think F '28, you'll see a big, big upswing, right? Because F '28, as I said, you'll have this Aumolertinib plus you'll have some of the Hengrui, some markets of Hengrui. Plus of course, India will be really meaningful. I mean starting F '27 itself in the second half with Aumolertinib being launched, right, and in India, right? Then TEVIMBRA, BRUKINSA are doing well. The run rate already is massive for TEVIMBRA, BRUKINSA. And then F '28, we'll have these other -- the Hengrui asset also launching. So I think the build -out is very solid, right? And you'll see some good growth numbers. F '28 for sure, you'll be ahead of $50 million, right, collectively ex RYALTRIS.

That's nice. And if I take a last one, Anurag -- on the -- when you think about, again, EBITDA margins for the business over the last couple of next 2 to 3 years. I mean, do you see operating leverage? So what will drive business from here on? It is gross margin improvement or this is - - you see also operating leverage inherent in the business, which can drive both -- which probably add to the margin improvement as we go forward?

So basically, if you could see, as Glenn pointed out, is that all these new innovative assets coming in, more branded mix share increasing in our overall mix, emerging market playing very strong for us. I think all this put together, you will see a margin expansion northward of what our guidance is there. But our guidance is right now mostly for this year, next say for 3 to 4 quarters. But as Glenn mentioned, FY '28, we see all these newer in -licensing assets coming up and all these things playing out, we should see a good positive consolidation in our gross -- in our EBITDA margins. Because it will be operating leverage after this actua lly because our base expenses have been built out. So it will be costs remain fixed and then you can build it on the platform, which we have built across geographies.

The next question is from the line of Harshit Dhoot from Dymon Asia Capital.

One question from my side on domestic sales. We have clocked a very good performance during the quarter at clocking at around INR1300 crores out of sales. So is it fair to assume that I think is normalized and this run rate is sustainable in the domestic business?

As I said, see, India is a very strong market for us, right? We are among the fastest -growing companies in India. I mean if you look at December also, we grew at 19% when the market grew at 10%, 11%, right? So very strong numbers, right, coming out of India. And I think for the next 3 to 5 years, India will be a strong growth market for us. And especially when we launch these oncology products, right, that will further give a good flip to the India growth, right? So both chronic respiratory and oncology will drive India. So you should see this run rate remain more or less at this level or keep growing from here, right, as we go forward in the quarters ahead.

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Utkarsh Gandhi for his closing comments.

Yes. Thank you. A quick reminder to everyone that the information statement and analysis discussed during this call describing the company or its affiliates, objectives, projections and estimates are forward-looking statements, and these are based on current expectations, forecasts and assumptions and are subject to risks and uncertainties, which could cause actual outcomes to materially differ. No representation of warranty, either expressed or implied, is provided in relation to the conversation and the documents provided. And the company undertakes no obligation to update or revise any forward-looking statements, whether because of new information, future events or otherwise. With that, we can close the Q3 earnings call. Thank you, everyone, for joining us today. Thank you.

Thank you, members of the management team. Ladies and gentlemen, on behalf of Glenmark Pharmaceuticals Limited, that concludes today's conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.