M R. NITIN LIMITED pca Laboratories Limited Earnings Conference Call” February 13, 2025 JIT KUMAR JAIN– MANAGING DIRECTOR ABORATORIES LIMITED ARISH KAMATH – CORPORATE COUNSEL AND OMPANY SECRETARY – IPCA LABORATORIES IMITED ITIN AGARWAL – DAM CAPITAL ADVISORS IMITED IRECTOR – IPCA OUNSEL AND ABORATORIES DVISORS

Moderator

Ladies and gentlemen, good day and welcome to Conference Call hosted by DAM Capital Advisors Limit ed. will be in the listen the presentation concludes. Should signal an operator by pressing star then zero on yo ur touchtone phone. Please note that this conference is been recorded. I now hand the conference over to Mr. you, and over to you, sir.

Thank you, Muskan. Good afternoon, everyone, and a v ery warm welcome to '25 Post Results Earnings Call we have representing Harish Kamath, Corporate Counsel & Company Secretary to make the opening comments and then we'll open th e floor for questions. Please go ahead, sir.

Thanks, Nitin and DAM Capital for organizing this ca ll. Today's call and discussions and answer given may include some forward expectations. This must be viewed in conjunction wit h risks that pharmaceu Our actual future financial performance may differ from what is projected and perceived. You may use your own judgment on information given during the call. The domestic formulation business has delivered arou nd quarter. On MAT December '24, growing among the top 20 players. basis point improvement in market share in this par ticular qu share at December '23 to 2.05% on MAT December current financial year. Six brands of the companies are among the top 300 b rands in the country. And both on acute and chronic market segment, we are delivering bette r growth pharma market in this quarter has grown by around 7 .4%. IQVIA is tracking our growth at 11.4%. On acute segment, market has grown by around 6%. Ou r growth is tracked by IQVIA as 8.7%. And on chronic segm grown by around 17.1%. Overall, our formulation business has delivered a growth of around 6% for the quarter and API business has also delivered a growth of around 12% for the quarter. If you look at our standalone Q3 '24. There is an improvement of almost around 5.73%. delivered an EBITDA of around 23.14% as against previous year 9 months of around 19.55%. Ipca Laboratories Limited February Ladies and gentlemen, good day and welcome to Ipca Laboratories Q3 FY '25 Earnings Conference Call hosted by DAM Capital Advisors Limi ted. As a reminder, all participant lines will be in the listen -only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, ple ase signal an operator by pressing star then zero on yo ur touchtone phone. Please note that this conference is been recorded. I now hand the conference over to Mr. Nitin Agarwal from DAM Capital Advisors. you, and over to you, sir. Thank you, Muskan. Good afternoon, everyone, and a very warm welcome to Post Results Earnings Call hosted by DAM Capital Advisors Limited. On the call today, we have representing Ipca Lab management, Mr. Ajit Kumar Jain, Managing Director and Mr. Kamath, Corporate Counsel & Company Secretary . I will hand over the call to Mr. Jain to make the opening comments and then we'll open th e floor for questions. Please go ahead, Thanks, Nitin and DAM Capital for organizing this c all. Today's call and discussions and answer given may include some forward -looking statements based on our current business expectations. This must be viewed in conjunction wi th risks that pharmaceu tical business face. Our actual future financial performance may differ from what is projected and perceived. You may use your own judgment on information given during the call. The domestic formulation business has delivered aro und -- a growth of around quarter. On MAT December '24, Ipca is ranked as 16th company as per IQVIA and its fast est growing among the top 20 players. Ipca continued to improve its market share. There is an 11 basis point improvement in market share in this par ticular qu arter from 1.95 MAT market share at December '23 to 2.05% on MAT December current financial year. Six brands of the companies are among the top 300 b rands in the country. And both on acute and chronic market segment, we are delivering bette r growth compared to the market. Overall pharma market in this quarter has grown by around 7 .4%. IQVIA is tracking our growth at On acute segment, market has grown by around 6%. Ou r growth is tracked by IQVIA as 8.7%. And on chronic segm ent, IPM growth is around 9.7% a nd in this period, we have grown by around 17.1%. Overall, our formulation business has delivered a g rowth of around 6% for the quarter and API business has also delivered a growth of around 12% for the quarter. If you look at our standalone Q3 FY '25 EBITDA margin, it is at around 24.25% as aga inst 18.52% in Q3 FY '24. There is an improvement of almost around 5.73% . If you look at 9 months basis, we have delivered an EBITDA of around 23.14% as against previous year 9 months of around 19.55%. Laboratories Limited February 13, 2025 Laboratories Q3 FY '25 Earnings As a reminder, all participant lines only mode and there will be an opportunity for you to ask questions after you need assistance during the conference call, ple ase signal an operator by pressing star then zero on yo ur touchtone phone. Please note that this Nitin Agarwal from DAM Capital Advisors. Thank Thank you, Muskan. Good afternoon, everyone, and a very warm welcome to Ipca Lab's Q3 F On the call today, Jain, Managing Director and Mr. . I will hand over the call to Mr. Jain to make the opening comments and then we'll open th e floor for questions. Please go ahead, Thanks, Nitin and DAM Capital for organizing this c all. Today's call and discussions and looking statements based on our current business tical business face. Our actual future financial performance may differ from what is projected and perceived. You a growth of around 13% for the is ranked as 16th company as per IQVIA and its fast est continued to improve its market share. There is an 11 arter from 1.95 MAT market Six brands of the companies are among the top 300 b rands in the country. And both on acute compared to the market. Overall pharma market in this quarter has grown by around 7 .4%. IQVIA is tracking our growth at On acute segment, market has grown by around 6%. Ou r growth is tracked by IQVIA nd in this period, we have Overall, our formulation business has delivered a g rowth of around 6% for the quarter and API business has also delivered a growth of around 12% for the quarter. If you look at our FY '25 EBITDA margin, it is at around 24.25% as aga inst 18.52% in Q3 FY If you look at 9 months basis, we have delivered an EBITDA of around 23.14% as against previous year 9 months of around 19.55%. There is an improvement of almost around 3.59%. And overall guidan around 21%, b of around 23% to 24%. around 19.87% as against 16.1% in Q3 FY '24. There is an improvement of around 3.77%. And if you look at 9 months basis, it's around 19.1 8% as against 17.34% in the previous financial year. There is an improvement of almost around 1.84%. As agains t overall, our guidelines was around 18% for the ye ar. As ag around 19 .18%. And hopefully, 19.18% to 19.5% this is the ra nge in which the overall consolidated margins w consolidated EBITDA margins are be Having given the broad numbers, now I'll request participants to ask questions.

Thank you very much. We will now begin the question and answer session. is from the line of Surya Narayan Patra from Philli pCapital (India) Private Limited. ahead.

Congratulations for the good set of numbers, sir. M y first question is on the gross margin, sir. So I think the positive surprise in And if I see this is one of the highest ever gross margin number that we have seen for the quarter. What is driving this and how sustainable is this one, sir?

See, gross margin this p let's say, turnover in this quarter has grown by ar ound 10%. Material cost, there is a significant reduction, against 10% growth, material cost has co me down by around 5%. So that is the impact. And that impact is mainly less pricing are more or less here and there. There is hardly any change. So it's a certain kind of product mix improvement that is there, that has he another factor which has happened that last year in the same quarter, our ROW market business was very low. It was around only because in the lower. But in this particular quarter, that number has come high. So that has also added to the -- overall to the margin because there, our margins ar e better, and it's company as a whole in any business line. So that has also helped in overall better margins i n the current quarter. But there is a significant improvement is there. If you look at each quarter by quarter, our material cost ratios are cont inuously improving. If yo material cost ratio was around 28.9%, in quarter 2 it was around 29.59%. This quarter, it has come to around 27.62%. Ipca Laboratories Limited February here is an improvement of almost around 3.59%. And overall guidan ce for the year was around 21%, b ut for whole of our financial year our EBITDA is li kely to remain in the range of around 23% to 24%. Overall, on consolidated EBITDA margin basis for Q3 FY '2 around 19.87% as against 16.1% in Q3 FY '24. There is an improvement of around 3.77%. And if you look at 9 months basis, it's around 19.1 8% as against 17.34% in the previous financial year. There is an improvement of almost around 1.84%. t overall, our guidelines was around 18% for the ye ar. As ag ainst we are delivering .18%. And hopefully, 19.18% to 19.5% this is the ra nge in which the overall consolidated margins w ould remain for the current f inancial year. So both on stand consolidated EBITDA margins are be tter than our guidelines for FY25. Having given the broad numbers, now I'll request participants to ask questions. Thank you very much. We will now begin the question and answer session. is from the line of Surya Narayan Patra from Philli pCapital (India) Private Limited. Congratulations for the good set of numbers, sir. M y first question is on the gross margin, sir. So I think the positive surprise in the quarter, what we are witnessing is in the gross margins. And if I see this is one of the highest ever gross margin number that we have seen for the quarter. What is driving this and how sustainable is this one, sir? See, gross margin this p articular quarter was exceptionally high mainly bec ause the overall, let's say, turnover in this quarter has grown by ar ound 10%. Material cost, there is a significant reduction, against 10% growth, material cost has co me down by around 5%. So that is the And that impact is mainly -- we don't see any kind of reduction in the material pricing. More or less pricing are more or less here and there. There is hardly any change. So it's a certain kind of product mix improvement that is there, that has he lped us with a better gross margin. another factor which has happened that last year in the same quarter, our ROW market business was very low. It was around INR104 crores-or- so. And this year, it has grown by almost around 50 %. It's only because some shipments here and there has happened in last quarter and that has resulted in the lower. But in this particular quarter, that number has come high. So that has also added overall to the margin because there, our margins ar e better, and it's company as a whole in any business line. So that has also helped in overall better margins i n the current quarter. But there is a significant improvement is there. If you look at each quarter by quarter, our material cost ratios inuously improving. If yo u look at the number on a stand alone basis, in quarter 1 material cost ratio was around 28.9%, in quarter 2 it was around 29.59%. This quarter, it has come to around 27.62%. Laboratories Limited February 13, 2025 ce for the year was ut for whole of our financial year our EBITDA is li kely to remain in the range Overall, on consolidated EBITDA margin basis for Q3 FY '2 4 is at around 19.87% as against 16.1% in Q3 FY '24. There is an improvement of around 3.77%. And if you look at 9 months basis, it's around 19.1 8% as against 17.34% in the previous ainst we are delivering .18%. And hopefully, 19.18% to 19.5% this is the ra nge in which the overall inancial year. So both on stand alone and Having given the broad numbers, now I'll request participants to ask questions. Thank you very much. We will now begin the question and answer session. The first question is from the line of Surya Narayan Patra from Philli pCapital (India) Private Limited. Please go Congratulations for the good set of numbers, sir. M y first question is on the gross margin, sir. the quarter, what we are witnessing is in the gross margins. And if I see this is one of the highest ever gross margin number that we have seen for the articular quarter was exceptionally high mainly bec ause the overall, let's say, turnover in this quarter has grown by ar ound 10%. Material cost, there is a significant reduction, against 10% growth, material cost has co me down by around 5%. So that is the we don't see any kind of reduction in the material pricing. More or less pricing are more or less here and there. There is hardly any change. So it's a certain kind of lped us with a better gross margin. And one another factor which has happened that last year in the same quarter, our ROW market so. And this year, it has grown by almost around 50 %. It's some shipments here and there has happened in last quarter and that has resulted in the lower. But in this particular quarter, that number has come high. So that has also added overall to the margin because there, our margins ar e better, and it's the highest as a So that has also helped in overall better margins i n the current quarter. But there is a significant improvement is there. If you look at each quarter by quarter, our material cost ratios alone basis, in quarter 1 material cost ratio was around 28.9%, in quarter 2 it was around 29.59%. This quarter, it has And overall, for the 9 months, it is at 28.73%. So more will remain around 28.73% that's the kind of broadl y around that 28% to 29% is the the overall. So at 9 months versus th improvement is there in overall in the current financial year. So it's largely portfolio has done well, we are de market on -- improvement.

Okay. And is it fair to believe, sir, even the turn around for Unichem, that i playing role in the gross margin improvement here in the consolidated level?

Talking about stand they were having around 5% EBITDA margin. And now t heir EBITD improved to almost around close to 12%. So that is also helping in consolidations to deliver the better margins.

Okay. Sir, the second question is on the U.S. busin ess front, sir. So could you give some color about the kind of the progress on the product launches fr om our portfolio, although now it has been included in the Unichem business in Unichem. So how should one monitor the progress of our U.S. busine Unichem? Because Unichem, sir?

As far as Ipca around 4 products till now and almost the stocks has gone in the current quarter and end of last quarter. So nothing meaningful has happened as far as the overall consolidated numbers are concerned. We have made shipments from here, b that. So that process has just started. We have started winning some kind of the bids and all. So in the coming quarters, that will start reflecting. But right now, U.S. business doesn't have much of impact as far as our overall business is concerned currently because hardly any meaningful number has come so far, yes.

Okay. Just last one question from my side. About th e institutional business, in the light of all these funding iss that we are having which was a kind of a promising business and a futuristic business opportunity what we're targeting through hormonals, so how should one think those potential bus iness and the existing business in the institutional side?

As far as institutions are concerned, it's by and large, antimalarial business only. And I think in current scenario where U.S. has abruptly stopped th e U.S. aids to the various programs are still assessing their Ipca Laboratories Limited February And overall, for the 9 months, it is at 28.73%. So more or less, for the fourth quarter also, it will remain around 28.73% that's the kind of broadl y around that 28% to 29% is the So -- and last year, for the first 9 months, this ratio was around 32%. So if you look at 9 months versus th is, so there is almost around improvement of 3.37%. And so that improvement is there in overall in the current financial year. So it's largely because of better product mix and our -- overall, if you see that our chronic portfolio has done well, we are de livering much better growth now, and we are beating the -- continuously on chronic also. So that is also helpi ng overall in the margin improvement. Okay. And is it fair to believe, sir, even the turn around for Unichem, that i playing role in the gross margin improvement here in the consolidated level? Talking about stand alone side, as far as Unichem is concerned, last ye ar, around same time, they were having around 5% EBITDA margin. And now t heir EBITD A margin has also improved to almost around close to 12%. So that is also helping in consolidations to deliver the better margins. Okay. Sir, the second question is on the U.S. busin ess front, sir. So could you give some color the kind of the progress on the product launches fr om our portfolio, although now it has been included in the Unichem portfolio. And now considering the integration of t his U.S. business in Unichem. So how should one monitor the progress of our U.S. busine Unichem? Because -- or in the light of that, are you going to give an u pgraded guidance for Unichem, sir? Ipca portfolio in Unichem is concerned, let's say -- I would say that we have shipped around 4 products till now and almost around 7 to 8 products are in pipeline. So the stocks has gone in the current quarter and end of last quarter. So nothing meaningful has happened as far as the overall consolidated numbers are concerned. We have made shipments from here, b ut it will take some time for the market bidding an d all that. So that process has just started. We have started winning some kind of the bids and all. So in the coming quarters, that will start reflecting. But right now, U.S. business doesn't have impact as far as our overall business is concerned currently because hardly any meaningful number has come so far, yes. Okay. Just last one question from my side. About th e institutional business, in the light of all these funding iss ues by the agencies. So how should one think about the injectable business that we are having which was a kind of a promising business and a futuristic business opportunity what we're targeting through hormonals, so how should one think those potential iness and the existing business in the institutional side? As far as institutions are concerned, it's by and large, antimalarial business only. And I think in current scenario where U.S. has abruptly stopped th e U.S. aids to the various programs are still assessing their -- the impact of that. So currently, we have not heard from any Laboratories Limited February 13, 2025 or less, for the fourth quarter also, it will remain around 28.73% that's the kind of broadl y around that 28% to 29% is the -- what is and last year, for the first 9 months, this ratio was around 32%. So if you look is, so there is almost around improvement of 3.37%. And so that overall, if you see that our chronic livering much better growth now, and we are beating the continuously on chronic also. So that is also helpi ng overall in the margin Okay. And is it fair to believe, sir, even the turn around for Unichem, that i s also kind of alone side, as far as Unichem is concerned, last ye ar, around same time, A margin has also improved to almost around close to 12%. So that is also helping in consolidations to deliver the Okay. Sir, the second question is on the U.S. busin ess front, sir. So could you give some color the kind of the progress on the product launches fr om our portfolio, although now it has portfolio. And now considering the integration of t his U.S. business in Unichem. So how should one monitor the progress of our U.S. busine ss in or in the light of that, are you going to give an u pgraded guidance for I would say that we have shipped around 7 to 8 products are in pipeline. So -- and mostly, the stocks has gone in the current quarter and end of last quarter. So nothing meaningful has ut it will take some time for the market bidding an d all that. So that process has just started. We have started winning some kind of the bids and all. So in the coming quarters, that will start reflecting. But right now, U.S. business doesn't have impact as far as our overall business is concerned currently because hardly any Okay. Just last one question from my side. About th e institutional business, in the light of all ues by the agencies. So how should one think about the injectable business that we are having which was a kind of a promising business and a futuristic business opportunity what we're targeting through hormonals, so how should one think those potential As far as institutions are concerned, it's by and l arge, antimalarial business only. And I think in current scenario where U.S. has abruptly stopped th e U.S. aids to the various programs . So we the impact of that. So currently, we have not heard from any institution any kind of cancellation of orders. But we have calculated our internal number that what kind of business on a year basis we were doing with, wher U.S. aid to the concerned donor. So that business is around difficult to say, but yes, that is the number which we have, which is relating to the U.S. aids business. And we didn't even know how much U.S. aid is giving funds to the global fund. global fund is also receiving the U.S. aid and how global fund will thereafter take up, that number is not known to us. So I will not like to co mment on that. But U.S. aid to the global fund. So that is not known to me right now.

Sure, sir. Thank you.

Th ank you. Th Please go ahead.

Firstly, congratulations on a great set of numbers, essentially with respect to the margins. My first question is with respect to generics. This quarter, there was a slight bit of weakness. Could you just say any particular reason or what was the reason b numbers in generics?

By and large, this lower generic numbers are mainly because of South Africa. We were doing a business of around maybe a round INR 75 crores to orders are lost and all those kind of things are there. But we are working on nex to be there in South Africa business in the next fi nancial year. But in current financial year, that's the one reason that which has overall impacted our overall generic number.

An d with respect to Unichem, obviously, there was a s teady progress and the margins have done way better than expectation. So I just wanted to understand for the next 1 year how are you looking at during the acquisitions time. So how are you lookin g at Unichem's growth and margin for the next 1 year or what are the kind of the levers that have you played and what are left, if you could give more color to that?

So right now, all operations all. It's synergetic benefits and your and other developed markets and all. bas ically all improvements what we could brought about in the overall in Unichem's operations and buying efficiencies we have created, that is what is reflecting in their overall margin. And we are also asking our U.S. team to be a little more aggressive and all, and we are monitoring that part. And we see a much better busi ness which is coming now in U.S. also. Ipca Laboratories Limited February institution any kind of cancellation of orders. But we have calculated our internal number that what kind of business on a year basis we were doing with, wher e the aids were given by the U.S. aid to the concerned donor. So that business is around INR40 crores, yes. So how much of that will impact, right now i t's difficult to say, but yes, that is the number which we have, which is relating to the U.S. aids business. And we didn't even know how much U.S. aid is giving funds to the global fund. global fund is also receiving the U.S. aid and how global fund will thereafter take up, that number is not known to us. So I will not like to co mment on that. But there would be some U.S. aid to the global fund. So that is not known to me right now. Sure, sir. Thank you. ank you. Th e next question is from the line of Shiva from Purnartha Investment Advisors Please go ahead. Firstly, congratulations on a great set of numbers, essentially with respect to the margins. My first question is with respect to generics. This quarter, there was a slight bit of weakness. Could you just say any particular reason or what was the reason b ehind that kind of slightly lower numbers in generics? By and large, this lower generic numbers are mainly because of South Africa. We were doing a business of around INR120 crores in South Africa in a year. I think this year, the n umber round INR40 crores-or-so. So there will be almost around INR 80 crore 75 crores to INR 80 crores kind of decline in South Africa business because of some tender orders are lost and all those kind of things are there. But we are working on nex t year's plan, and there will be significant improv ements are likely to be there in South Africa business in the next fi nancial year. But in current financial year, that's the one reason that which has overall impacted our overall generic number. d with respect to Unichem, obviously, there was a s teady progress and the margins have done way better than expectation. So I just wanted to understand for the next 1 year how are you looking at -- because the margins have improved better than what we have during the acquisitions time. So how are you lookin g at Unichem's growth and margin for the next 1 year or what are the kind of the levers that have you played and what are left, if you could give more color to that? So right now, all the improvements, which is coming is basically the improvement in operations all. It's synergetic benefits and your -- extending the product range to other markets and other developed markets and all. That's a little long- term game. So right now, it is ically all improvements what we could brought about in the overall in Unichem's operations and buying efficiencies we have created, that is what is reflecting in their overall margin. And we are also asking our U.S. team to be a little more aggressive and all, and we are monitoring that part. And we see a much better busi ness which is coming now in U.S. also. Laboratories Limited February 13, 2025 institution any kind of cancellation of orders. But we have calculated our internal number that e the aids were given by the , yes. So how much of that will impact, right now i t's difficult to say, but yes, that is the number which we have, which is relating to the U.S. aids business. And we didn't even know how much U.S. aid is giving funds to the global fund. So if global fund is also receiving the U.S. aid and how global fund will thereafter take up, that there would be some Shiva from Purnartha Investment Advisors . Firstly, congratulations on a great set of numbers, essentially with respect to the margins. My first question is with respect to generics. This quarter, there was a slight bit of weakness. Could ehind that kind of slightly lower By and large, this lower generic numbers are mainly because of South Africa. We were doing in South Africa in a year. I think this year, the n umber 80 crore s kind of -- 80 crores kind of decline in South Africa business because of some tender t year's plan, and there will be significant improv ements are likely to be there in South Africa business in the next fi nancial year. But in current financial year, that's the one reason that which has overall impacted our overall generic number. d with respect to Unichem, obviously, there was a s teady progress and the margins have done way better than expectation. So I just wanted to understand for the next 1 year how are because the margins have improved better than what we have expected during the acquisitions time. So how are you lookin g at Unichem's growth and margin for the next 1 year or what are the kind of the levers that have you played and what are left, if you the improvements, which is coming is basically the improvement in extending the product range to other markets term game. So right now, it is ically all improvements what we could brought about in the overall in Unichem's operations and buying efficiencies we have created, that is what is reflecting in their overall margin. And we are also asking our U.S. team to be a little more aggressive and all, and we are monitoring that part. And we see a much better busi ness which is coming now in U.S. also. And overall, it's basically improvement in operatio n that has got the results long way to go, I would say that, the margin will k eep on improving as far as Unichem is concerned. A lot of work is happening on API side. It's in wor k in progress because the API efficiencies are one where it will also reduce the captive not able to sell the APIs to, let's say, the Indian market or other markets where the the price-sensitive markets and all that is because their overall production cost is higher. So they are most start improving efficiencies on that and all. So th at will also bring a lot of continuous improvement. And these improvement numbers will sta rt reflecting in the next 1 or 2 quarter because one of their quarter somewhere. So that will start reflecting after a quarter coming in, filing happens from there and som of those materials, the cost of API production will go down. So there will be continuous improvements will happen in Unichem's operation further.

The next question is from the line of Tushar from ahead.

Sir, just extending your comment now with backward integration of Unichem's formulations and subsequently, chronic share increasing in India formulation business. Qualitatively, at least, if you c one can think for FY '26?

So right now, the budget exercise is going on. So o nce the budget numbers are finalized and overall -- so normally, we give those kind of guideli quarter results. So around that time, we will give the guidelines. But I would say that the margins are improving and will continue to improve, but the guidelines we will be able to give along with our annual

Sir, secondly, just on the API products portfolio l evel, is the inventory now more or less getting normalized at industry level or we are still seeing pricing pressure?

Right now, we have not noticed any kind of pricing pressur have moved, other solvent prices have come down. I think on the chemical side, there are hardly any kind of movement. And intermediate side, we have seen slight improvement in few, but we have seen reduction in many more. So overall basis, I would say this is a neutral. An d I don't foresee that in next 2 quarters also, there could be any kind of further improvements in the overall, let's say, increase in the prices. So more or less the similar trend will continue.

And just lastly, the effective tax rate, how much you think about for full year '25? Ipca Laboratories Limited February And overall, it's basically improvement in operatio n that has got the results long way to go, I would say that, the margin will k eep on improving as far as Unichem is A lot of work is happening on API side. It's in wor k in progress because the API efficiencies are one where it will also reduce the captive consumption cost and also right now, Unichem is not able to sell the APIs to, let's say, the Indian market or other markets where the sensitive markets and all that is because their overall production cost is higher. So they are most ly consuming the API for their own production for U .S. and all. So once we start improving efficiencies on that and all. So th at will also bring a lot of continuous improvement. And these improvement numbers will sta rt reflecting in the next 1 or 2 quarter because one of their -- the bigger plant, which is likely to be operational maybe in the next quarter somewhere. So that will start reflecting after a quarter -or-so once the regulatory approvals and all start coming in, filing happens from there and som e kind of -- once they start captive consumptions of those materials, the cost of API production will go down. So there will be continuous improvements will happen in Unichem's operation further. The next question is from the line of Tushar from Motilal Oswal Financial Services. Sir, just extending your comment now with backward integration of Unichem's formulations and subsequently, chronic share increasing in India formulation business. Qualitatively, at least, if you c ould share, compared to FY '25 consol EBITDA margin , what kind of margins one can think for FY '26? So right now, the budget exercise is going on. So o nce the budget numbers are finalized and so normally, we give those kind of guideli nes along with our -- the first quarter quarter results. So around that time, we will give the guidelines. But I would say that the margins are improving and will continue to improve, but the guidelines we will be able to give along with our annual results. Sir, secondly, just on the API products portfolio l evel, is the inventory now more or less getting normalized at industry level or we are still seeing pricing pressure? Right now, we have not noticed any kind of pricing pressur e. Somewhere some solvent prices have moved, other solvent prices have come down. I think on the chemical side, there are hardly any kind of movement. And intermediate side, we have seen slight improvement in few, but we have seen reduction in many more. So overall basis, I would say this is a neutral. An d I don't foresee that in next 2 quarters also, there could be any kind of further improvements in the overall, let's say, increase in the prices. So more or less the similar trend will continue. nd just lastly, the effective tax rate, how much you think about for full year '25? Laboratories Limited February 13, 2025 And overall, it's basically improvement in operatio n that has got the results right now and a long way to go, I would say that, the margin will k eep on improving as far as Unichem is A lot of work is happening on API side. It's in wor k in progress because the API efficiencies consumption cost and also right now, Unichem is not able to sell the APIs to, let's say, the Indian market or other markets where the -- more of sensitive markets and all that is because their overall production cost is higher. ly consuming the API for their own production for U .S. and all. So once we start improving efficiencies on that and all. So th at will also bring a lot of continuous improvement. And these improvement numbers will sta rt reflecting in the next 1 or 2 quarter s the bigger plant, which is likely to be operational maybe in the next so once the regulatory approvals and all start once they start captive consumptions of those materials, the cost of API production will go down. So there will be continuous Oswal Financial Services. Please go Sir, just extending your comment now with backward integration of Unichem's formulations and subsequently, chronic share increasing in India formulation business. Qualitatively, at ould share, compared to FY '25 consol EBITDA margin , what kind of margins So right now, the budget exercise is going on. So o nce the budget numbers are finalized and the first quarter -- last quarter results. So around that time, we will give the guidelines. But I would say that the margins are improving and will continue to improve, but the guidelines we will be able to give Sir, secondly, just on the API products portfolio l evel, is the inventory now more or less e. Somewhere some solvent prices have moved, other solvent prices have come down. I think on the chemical side, there are hardly any kind of movement. And intermediate side, we have seen slight improvement in few, So overall basis, I would say this is a neutral. An d I don't foresee that in next 2 quarters also, there could be any kind of further improvements in the overall, let's say, increase in the prices. nd just lastly, the effective tax rate, how much you think about for full year '25?

Overall tax rate for us is 25%, but some kind of di sallowances on CSR and also on the marketing cost and all wise, I think overall tax will remain around 27% to

All right. Thank you. That’s it.

Thank you The next question is from the line of Nitin Agarwal from DAM Capital Advisors. Please go ahead.

Sir, on the generic business, sir, can you provide an update on How have they sort of done so far in 9 months and how are you looking at it going forward?

Overall, U.K. was also very fiercely competitive ma rket. So overall, I think U.K. numbers are muted more or less in the line w EU numbers is But overall, South Africa is a little down, and als o Australia and New Zealand numbers are down. Austra lia numbers are down mainly because of some supply chain issues on ACI, which we were using for formulations. So now that issues are resolved. So in this quarter, Australia numbers have improved, and I think overall in next quarter also those numbers will So that's the broad reason for overall lower growth on generic side.

And then looking forward, is the U.K. business, how are you look expecting a turnaround in the business that I think is coming slower than expec we looking at the business now, sir, when you look at

Let's say, I think second quarter was very bad. But third quarter onwards, the prices have again started improving there and business ha of launches also in pipeline. So I think in U.K. nu mbers, we will see around 15% to 17% kind of overall growth in next financial year.

And sir, Europe will continue to grow at these doub

Yes.

And then lastly, on branded formulations, what was quarter?

It's only, let's say, last quarter be cause the shipment in that quarter was low. And now it has come to the normalized level. So this quarter's number is broad the other quarter. So more or less, that impact is a onetime impact Q3 number last year was low, so it's appearing to b e high growth. But overall, on this promotional market business, we are looking for aro und 8% to 9% growth for the whole of the financial year. Ipca Laboratories Limited February Overall tax rate for us is 25%, but some kind of di sallowances on CSR and also on the marketing cost and all wise, I think overall tax will remain around 27% to 28% kind of thing. All right. Thank you. That’s it. The next question is from the line of Nitin Agarwal from DAM Capital Advisors. Please go ahead. Sir, on the generic business, sir, can you provide an update on the EU and the U.K. market? How have they sort of done so far in 9 months and how are you looking at it going forward? Overall, U.K. was also very fiercely competitive ma rket. So overall, I think U.K. numbers are muted more or less in the line w ith what we had previous year 9 months. So it has n ot grown. EU numbers is -- we had good growth in EU. So around 14%, 15% is the overall growth there. But overall, South Africa is a little down, and als o Australia and New Zealand numbers are lia numbers are down mainly because of some supply chain issues on ACI, which we were using for formulations. So now that issues are resolved. So in this quarter, Australia numbers have improved, and I think overall in next quarter also those numbers will So that's the broad reason for overall lower growth on generic side. And then looking forward, is the U.K. business, how are you look -- expecting a turnaround in the business that I think is coming slower than expec we looking at the business now, sir, when you look at -- take a 2-year view on the business? Let's say, I think second quarter was very bad. But third quarter onwards, the prices have again started improving there and business ha s started improving overall. And I think we have a lot of launches also in pipeline. So I think in U.K. nu mbers, we will see around 15% to 17% kind of overall growth in next financial year. And sir, Europe will continue to grow at these double-digit growth rates? And then lastly, on branded formulations, what was -- what drove such high growth this It's only, let's say, last quarter -- last year on the same quarter, the number was very low cause the shipment in that quarter was low. And now it has come to the normalized level. So this quarter's number is broad -- more or less is similar to the plus/minus 5%, 7% co mpared to the other quarter. So more or less, that impact is a onetime impact because the number of last quarter Q3 number last year was low, so it's appearing to b e high growth. But overall, on this promotional market business, we are looking for aro und 8% to 9% growth for the whole of the financial year. Laboratories Limited February 13, 2025 Overall tax rate for us is 25%, but some kind of di sallowances on CSR and also on the 28% kind of thing. The next question is from the line of Nitin Agarwal from DAM Capital Advisors. the EU and the U.K. market? How have they sort of done so far in 9 months and how are you looking at it going forward? Overall, U.K. was also very fiercely competitive ma rket. So overall, I think U.K. numbers are ith what we had previous year 9 months. So it has n ot grown. we had good growth in EU. So around 14%, 15% is the overall growth there. But overall, South Africa is a little down, and als o Australia and New Zealand numbers are lia numbers are down mainly because of some supply chain issues on ACI, which we were using for formulations. So now that issues are resolved. So in this quarter, Australia numbers have improved, and I think overall in next quarter also those numbers will improve. because we were expecting a turnaround in the business that I think is coming slower than expec ted, so how are year view on the business? Let's say, I think second quarter was very bad. But third quarter onwards, the prices have again s started improving overall. And I think we have a lot of launches also in pipeline. So I think in U.K. nu mbers, we will see around 15% to 17% kind what drove such high growth this last year on the same quarter, the number was very low cause the shipment in that quarter was low. And now it has come to the normalized level. So more or less is similar to the plus/minus 5%, 7% co mpared to because the number of last quarter -- sorry, Q3 number last year was low, so it's appearing to b e high growth. But overall, on this promotional market business, we are looking for aro und 8% to 9% growth for the whole of the

Okay. And sir, lastly...

And gross number is looking muted is also because of your depreciation of r

And then lastly, on the API business, sir, how shou ld we now think about the API business going forward?

8% to 10 % growth.

And sir, the newer capacities in both Dewas and all , Dewas have come through now, they are - you start using the Dewas capacities?

Yes, Dewas capacity we have started already, yes. B ut capacity utilization is around 35% 40%. So it is still too are pending. So once that happens, then capacity utilizations will pick up.

Okay. Thank you.

Thank you. The next question is from (India) Private Limited.

Yes, sir. So this is an extended question about API s. In fact, sir, API export particularly, that was one of the key earning driver also for effectiveness there. But if I see that, okay, during the COVID period, the kind of run rate, what we have been seeing even after 4, 5 years, we have not touched that number. So obviously, there was the is seen from the U.K. side, post that we have seen the re is a kind of a moderated performance only. So if you can give some sense of what is currently are cu rrently the drivers? And going ahead, what should drive the growth for us? Whether it is a new product or it is a new capacity that will drive the APIs? Could you give some sense about the API portfolio as a whole and the export market particularly?

Let's say, on COVID period, the major and hydroxychloroquine because they were required f or COVID and that has also came with good pricing and all. So that has given overall hig h numbers around that subsequently, we have faced the problem on certain business. So that has resulted in overall lower growth and also, we were carrying higher inve ntories and intermediate pricings and all. And pricing has slashed down to ar So around $50 now. So that has also resulted in ove rall turnover number coming lower on that account and prices of intermediates also of those API has significantly declined. So that has resulted i the APIs and also on portfolio approach now all the se things are of things of past, we also lost Ipca Laboratories Limited February kay. And sir, lastly... And gross number is looking muted is also because of your depreciation of r o And then lastly, on the API business, sir, how shou ld we now think about the API business going forward? % growth. And sir, the newer capacities in both Dewas and all , Dewas have come through now, they are you start using the Dewas capacities? Yes, Dewas capacity we have started already, yes. B ut capacity utilization is around 35% 40%. So it is still too -- because a lot of regulatory approvals has yet to co me and inspections are pending. So once that happens, then capacity utilizations will pick up. Okay. Thank you. The next question is from the line of Surya Narayan Patra from PhillipCapital (India) Private Limited. Please go ahead. Yes, sir. So this is an extended question about API s. In fact, sir, API export particularly, that was one of the key earning driver also for us for a longer period of time because of our cost effectiveness there. But if I see that, okay, during the COVID period, the kind of run rate, what we have been seeing even after 4, 5 years, we have not touched that number. So obviously, there was the is sues post the impurities in the couple of key APIs, what we've seen from the U.K. side, post that we have seen the re is a kind of a moderated performance only. So if you can give some sense of what is currently -- or which are the key products which rrently the drivers? And going ahead, what should drive the growth for us? Whether it is a new product or it is a new capacity that will drive the APIs? Could you give some sense about the API portfolio as a whole and the export market particularly? Let's say, on COVID period, the major -- the API business buildup was around chloroquine and hydroxychloroquine because they were required f or COVID and that has also came with good pricing and all. So that has given overall hig h numbers around that subsequently, we have faced the problem on certain business. So that has resulted in overall lower growth and also, we were carrying higher inve ntories and -- which were at higher intermediate pricings and all. And pricing has slashed down to ar ound from $100 level to almost around $40, $50 leve l now. So around $50 now. So that has also resulted in ove rall turnover number coming lower on that account and prices of intermediates also of those API has significantly declined. So that has resulted i n overall lower number. And overall portfolio- wise, we are also adding the APIs and also on portfolio approach now all the se things are of things of past, we also lost Laboratories Limited February 13, 2025 ouble. And then lastly, on the API business, sir, how shou ld we now think about the API business And sir, the newer capacities in both Dewas and all , Dewas have come through now, they are - Yes, Dewas capacity we have started already, yes. B ut capacity utilization is around 35% , because a lot of regulatory approvals has yet to co me and inspections the line of Surya Narayan Patra from PhillipCapital Yes, sir. So this is an extended question about API s. In fact, sir, API export particularly, that us for a longer period of time because of our cost effectiveness there. But if I see that, okay, during the COVID period, the kind of run rate, what sues post the impurities in the couple of key APIs, what we've seen from the U.K. side, post that we have seen the re is a kind of a moderated performance or which are the key products which rrently the drivers? And going ahead, what should drive the growth for us? Whether it is a new product or it is a new capacity that will drive the APIs? Could you give some sense about the API portfolio as a whole and the export market particularly? the API business buildup was around chloroquine and hydroxychloroquine because they were required f or COVID and that has also came with good pricing and all. So that has given overall hig h numbers around that time. And subsequently, we have faced the problem on certain business. So that has resulted in overall which were at higher ound from $100 level to almost around $40, $50 leve l now. So around $50 now. So that has also resulted in ove rall turnover number coming lower on that account and prices of intermediates also of those API has significantly declined. wise, we are also adding the APIs and also on portfolio approach now all the se things are of things of past, we also lost a significant business in Iran. We were doing almos t around of business in Iran. And today, that business is 0. So that has also res ulted in overall lower have dollars or currencies to pay and therefore, th at market, we are not able to sell anything right now. So that business has also co Iran is no longer there with us. So that has also i mpacted overall business. And now since portfolio is also increasing and we have Ratlam cap acity, by and large, the incremental capacities will be used Dewas capacity is available and all that will resul t in around 8% to 10% kind of overall API business increase. More specific numbers I'll be ab le to give after the quarter number, where give the proper guidelines on that.

Is the Sartans still kind of the largest product segment for our API business, sir?

Yes. Individual number number. But -- sales number is not moving up. Some market prices h ave started moving up. But overall, on a mix basis, I w

Okay. Just on the U.S. business side, from the pers pective of Unichem, now since they are having the integrated operation at their end, so we know that pre making business because of the whatever, kind of not so significant integrated portfolio as well as not so complex generic products there in the portfolio. So here onwards that Unichem as a whole, it's a kin d of significant chunk of the consolidated

business. So

basis and how should one think about that, particul arly regards to U.S.? Also considering the concern of the tariff and all that, so how should o ne really position about Unich portion of the business, which is U.S.?

So if you look at Unichem business, the product por tfolio is of the order products only, and they are continuously launching 3 to 4 kind of new products every year. And probably in the next few years, at least 5 to 6 kind of launches can happen year portfolio, and Ipca portfolio also the launches would happen. With consolidation with Unichem the business overal l, so what kind of expenditure duplicate expenditure was ther coming because standalone Bayshore was having this again marketing operations and cost, and they were not able to recover those costs because b usiness operation around that time and when we wer e not having FDA approval. Ipca Laboratories Limited February a significant business in Iran. We were doing almos t around INR75 crores, INR of business in Iran. And today, that business is 0. So that has also res ulted in overall lower -- because they don't have dollars or currencies to pay and therefore, th at market, we are not able to sell anything right now. So that business has also co me down. So that consistent business what we have on Iran is no longer there with us. So that has also i mpacted overall business. And now since portfolio is also increasing and we have Ratlam cap acity, by and large, the incremental capacities will be used for our U.S. captive consumptions and all. Dewas capacity is available and all that will resul t in around 8% to 10% kind of overall API business increase. More specific numbers I'll be ab le to give after the -- along with the fourth quarter number, where -- after our annual budget exercise is complete, and w e will be able to give the proper guidelines on that. Is the Sartans still kind of the largest product segment for our API business, sir? Yes. Individual number -wise, yes , this is giving the highest growth, yes, highest o verall -- and we are also seeing that with even volume number s going up, overall, your sales number is not moving up. Some market prices h ave started moving up. But overall, on a mix basis, I w ould say that number is still muted, yes. Okay. Just on the U.S. business side, from the pers pective of Unichem, now since they are having the integrated operation at their end, so we know that pre -acquisition, it was loss business because of the whatever, kind of not so significant integrated portfolio as well as not so complex generic products there in the portfolio. So here onwards that Unichem as a whole, it's a kin d of significant chunk of the consolidated going ahead, what is the strategy there for the U.S . business on a consolidated basis and how should one think about that, particul arly regards to U.S.? Also considering the concern of the tariff and all that, so how should o ne really position about Unich portion of the business, which is U.S.? So if you look at Unichem business, the product por tfolio is of the order products only, and they are continuously launching 3 to 4 kind of new products every year. And probably in the years, at least 5 to 6 kind of launches can happen year -on-year on Unichem's portfolio, and Ipca portfolio also the launches would happen. With consolidation with Unichem the business overal l, so what kind of expenditure duplicate expenditure was ther e that we have already eliminated and that benefit has started coming because standalone Bayshore was having this again marketing operations and cost, and they were not able to recover those costs because b usiness operation around that time and e not having FDA approval. Laboratories Limited February 13, 2025 INR 80 crores kind because they don't have dollars or currencies to pay and therefore, th at market, we are not able to sell anything So that consistent business what we have on Iran is no longer there with us. So that has also i mpacted overall business. And now since portfolio is also increasing and we have Ratlam cap acity, by and large, the incremental Dewas capacity is available and all that will resul t in around 8% to 10% kind of overall API along with the fourth after our annual budget exercise is complete, and w e will be able to Is the Sartans still kind of the largest product segment for our API business, sir? , this is giving the highest growth, yes, highest o verall and we are also seeing that with even volume number s going up, overall, your sales number is not moving up. Some market prices h ave started moving up. But overall, on a Okay. Just on the U.S. business side, from the pers pective of Unichem, now since they are acquisition, it was loss - business because of the whatever, kind of not so significant integrated portfolio as well So here onwards that Unichem as a whole, it's a kin d of significant chunk of the consolidated going ahead, what is the strategy there for the U.S . business on a consolidated basis and how should one think about that, particul arly regards to U.S.? Also considering the concern of the tariff and all that, so how should o ne really position about Unich em's larger So if you look at Unichem business, the product por tfolio is of the order products only, and they are continuously launching 3 to 4 kind of new products every year. And probably in the year on Unichem's With consolidation with Unichem the business overal l, so what kind of expenditure -- e that we have already eliminated and that benefit has started coming because standalone Bayshore was having this again marketing operations and cost, and they were not able to recover those costs because b usiness operation around that time and So that cost was a burden. So that cost has gone up has those kind of people and they don't need to hir e additional people to do the Bayshore and also Ipca business. So that is resulting i

Okay. And just last one, sir, about the subsidiaries. How do

Sir, I just request you to rejoin the queue, please.

Sure.

Thank you. The next question is from the line of ASK Investment Managers.

Sir, the first question is on the gross debt levels . If you could give out the gross debt levels and how s hould we think of it going ahead?

Overall, I think gross debt is around And we have almost around crores kind of debt overall, practically that number will become nil because deb t repayment and all, overall cash holding and if you see,

Sir, this is on the stand

Standalone level.

On the consolidated level, what could

Consolidated level, there are hardly any borrowings in Unichem. It's not a about $12 mil

All right, sir. And on your domestic portfolio? And how have And what do

Overall, if you look at the pain portfolio, overall for the first 9 months of current year, on pain portfolio, we have grown by around 14%, which inclu des osteoarthritis and rheumatoid arthritis both. So in both the market segment, we have leader ship and that portfolio has grown by around 14%. So that portfolio continues to do ve ry well for us. But certain markets like antimalarial this year Ant ibacterial have just grown by 1%. Cough and cold ha s grown by 4%. So these are the portfolios where we have lagging. Our cardiovascula r portfolios are now doing better. Our urology, then dermatology and nutraceuticals and also gastrointestinal portfolio, t better. So overall, we have around portfolio, we have around 12% internal growth. Ipca Laboratories Limited February So that cost was a burden. So that cost has gone up -- gone out now because Unichem already has those kind of people and they don't need to hir e additional people to do the Bayshore and also Ipca business. So that is resulting i n overall in operational cost decrease for us. Okay. And just last one, sir, about the subsidiaries. How do see you their performance... request you to rejoin the queue, please. The next question is from the line of Gagan Thareja from ASK Investment ASK Investment Managers. Please go ahead. Sir, the first question is on the gross debt levels . If you could give out the gross debt levels and hould we think of it going ahead? Overall, I think gross debt is around INR 900 crores in the balance sheet for Ipca standalone . And we have almost around INR 600 crores of cash. So net of cash, we have around crores kind of debt overall, cash what is available with us. And I think next fi nancial year, practically that number will become nil because deb t repayment and all, overall cash holding and if you see, net debt would be practically zero. Sir, this is on the stand alone level, on the consolidated level? Standalone level. consolidated level, what could be gross debt be? Consolidated level, there are hardly any borrowings in Unichem. It's not a -- 12 mil lion, $13 million -- $30 million overall. All right, sir. And on -- can you also give the salience of Zerodol and its l ine extensions in your domestic portfolio? And how have -- how has that franchise grown for you year And what do you think of that particular brand going forward? Overall, if you look at the pain portfolio, overall for the first 9 months of current year, on pain portfolio, we have grown by around 14%, which inclu des osteoarthritis and rheumatoid both. So in both the market segment, we have leader ship and that portfolio has grown by around 14%. So that portfolio continues to do ve ry well for us. But certain markets like antimalarial this year has not grown, so practically zero growth on there. ibacterial have just grown by 1%. Cough and cold ha s grown by 4%. So these are the portfolios where we have lagging. Our cardiovascula r portfolios are now doing better. Our urology, then dermatology and nutraceuticals and also gastrointestinal portfolio, t better. So overall, we have around -- if you look at first 9 months of current year, on o verall portfolio, we have around 12% internal growth. Laboratories Limited February 13, 2025 gone out now because Unichem already has those kind of people and they don't need to hir e additional people to do the Bayshore and n overall in operational cost decrease for us. you their performance... Gagan Thareja from ASK Investment from Sir, the first question is on the gross debt levels . If you could give out the gross debt levels and 900 crores in the balance sheet for Ipca standalone . 600 crores of cash. So net of cash, we have around INR300 cash what is available with us. And I think next fi nancial year, practically that number will become nil because deb t repayment and all, overall cash holding -- maybe less than can you also give the salience of Zerodol and its l ine extensions in how has that franchise grown for you year -to-date? Overall, if you look at the pain portfolio, overall for the first 9 months of current year, on pain portfolio, we have grown by around 14%, which inclu des osteoarthritis and rheumatoid both. So in both the market segment, we have leader ship and that portfolio has grown by around 14%. So that portfolio continues to do ve ry well for us. But certain markets like ibacterial have just grown by 1%. Cough and cold ha s grown by 4%. So these are the portfolios where we have lagging. Our cardiovascula r portfolios are now doing better. Our urology, then dermatology and nutraceuticals and also gastrointestinal portfolio, t hey are doing if you look at first 9 months of current year, on o verall

Okay. And on the subsidiaries, if you could give so me flavor of the subsidiary both at a P&L level and also at a balance sheet level, if some details can be given out?

Except Pisgah and our associate company Krebs, othe r all companies are profitable as on date. Bayshore, as Mr. Jain has said, we were incurr has gone from the Other than that all subsidiary and associates, there are profit in the consolidated level.

Okay. All ri ght. But potentially, there would be room for further improvement in margins in all of those?

Yes, definitely, definitely. Everywhere, there is p otential room to improve margins. Especially Pisgah, we are working on long

Okay. Thank you, sir. I will get back in the queue. Thanks for taking my questions.

Thank you. The next question is from the line of Pulkit Management.

Congrats on a good set of numbers. My first questio n is on the U.S. portfolio for Ipca that's going to be marketed by Unichem. What is the potent ial revenue opportunity for you over the next 3 to 5 years as per your own

See, before our U.S. FDA issue started, maybe in th e year 2012 dollar was about products. So out of those 10 products, w other products are on the verge of getting manufact ured. So gradually, we will build our business through Unichem on those initial products, which were earlier selling in the market in the U.S. market And we have very good cost benefit because of backw ard integration, our own API and all. In most of those APs, I'm also maybe one of the largest manufacturers in the world.

Understood. So the level you crossed, let's say, kind of percentage margins are then recorded at Unichem level for the marketing?

Unichem, whatever Those marketing partners are profit, for sharing cost of distribution, everythin g is on paper. It will be beneficial to both Unichem as well as Ipca.

Yes. I'm just trying to understand what is the dilutive e

We have not spent any money for doing business. Wha tever plans earlier we were manufacturing U.S. products, they were as good as n ot manufacturing anything. Then we started gradually using them for other capacity utilization was very less. Ipca Laboratories Limited February Okay. And on the subsidiaries, if you could give so me flavor of the subsidiary both at a P&L level and also at a balance sheet level, if some details can be given out? Except Pisgah and our associate company Krebs, othe r all companies are profitable as on date. Bayshore, as Mr. Jain has said, we were incurr ing losses because of administrative costs that has gone from the -- our books now. So only Pisgah and Krebs are little cause of concern. Other than that all subsidiary and associates, there are profit in the consolidated level. ght. But potentially, there would be room for further improvement in margins in all Yes, definitely, definitely. Everywhere, there is p otential room to improve margins. Especially Pisgah, we are working on long -term plan and all, i t should turn around in a couple of quarters. Okay. Thank you, sir. I will get back in the queue. Thanks for taking my questions. The next question is from the line of Pulkit Singhal from Dalmus Capital Management. Please go ahead. Congrats on a good set of numbers. My first questio n is on the U.S. portfolio for Ipca that's going to be marketed by Unichem. What is the potent ial revenue opportunity for you over the next 3 to 5 years as per your own estimation, a rough range? See, before our U.S. FDA issue started, maybe in th e year 2012 -'13, when exchange rupee dollar was about INR60, we did about INR250 crores formulation business with about 10 products. So out of those 10 products, w e have just manufactured and shipped 4 products. Fe w other products are on the verge of getting manufact ured. So gradually, we will build our business through Unichem on those initial products, which were earlier selling in the market in the U.S. market . . And we have very good cost benefit because of backw ard integration, our own API and all. In most of those APs, I'm also maybe one of the largest manufacturers in the world. Understood. So the level you crossed, let's say, INR100 crores or INR 200 crores of size, what kind of percentage margins are then recorded at Unichem level for the marketing? Unichem, whatever -- see, earlier also we were doing business through ma rketing partner. Those marketing partners are now replaced with the Unichem. There is a formula f or sharing profit, for sharing cost of distribution, everythin g is on paper. It will be beneficial to both Unichem as well as Ipca. Yes. I'm just trying to understand what is the dilutive e ffect it has because Unichem is at... We have not spent any money for doing business. Wha tever plans earlier we were manufacturing U.S. products, they were as good as n ot manufacturing anything. Then we started gradually using them for other markets like Europe and all. In spite of that, thei r capacity utilization was very less. Laboratories Limited February 13, 2025 Okay. And on the subsidiaries, if you could give so me flavor of the subsidiary performance both at a P&L level and also at a balance sheet level, if some details can be given out? Except Pisgah and our associate company Krebs, othe r all companies are profitable as on date. ing losses because of administrative costs that our books now. So only Pisgah and Krebs are little cause of concern. Other than that all subsidiary and associates, there are profit in the consolidated level. ght. But potentially, there would be room for further improvement in margins in all Yes, definitely, definitely. Everywhere, there is p otential room to improve margins. Especially t should turn around in a couple of quarters. Okay. Thank you, sir. I will get back in the queue. Thanks for taking my questions. Singhal from Dalmus Capital Congrats on a good set of numbers. My first questio n is on the U.S. portfolio for Ipca that's going to be marketed by Unichem. What is the potent ial revenue opportunity for you over the '13, when exchange rupee - formulation business with about 10 e have just manufactured and shipped 4 products. Fe w other products are on the verge of getting manufact ured. So gradually, we will build our business through Unichem on those initial products, which were earlier selling in the market -- And we have very good cost benefit because of backw ard integration, our own API and all. In most of those APs, I'm also maybe one of the largest manufacturers in the world. 200 crores of size, what kind of percentage margins are then recorded at Unichem level for the marketing? see, earlier also we were doing business through ma rketing partner. now replaced with the Unichem. There is a formula f or sharing profit, for sharing cost of distribution, everythin g is on paper. It will be beneficial to both ffect it has because Unichem is at... We have not spent any money for doing business. Wha tever plans earlier we were manufacturing U.S. products, they were as good as n ot manufacturing anything. Then we markets like Europe and all. In spite of that, thei r Once we do progression in our U.S. business through Unichem, whatever overhead recovery will also improve. That will also indirectly benefi t me as well as my API add production. So all those benefits will come over a period of time as and we go on improving our U.S. business.

Understood. And when it comes to Unichem's own faci lities, I think they are at 50% to 60% utilization. Is my understandin

That is also gradually improving. Goa, too, which w as newly commissioned, there also they have started gradually ramping up the production. S o all Unichem productivity also. That is also one of th because of higher production. So all verticals, whe rever operational efficiency can be encashed, everything is being worked on.

Understood. And sir, in how many years do you see t hat you would be the Unichem facilities...

So next 4 to 5 years, I don't think they will need any further capacity other than routine capacity improvement plans and all. And whatever AP I they want to produce going forward that capex is capacity available. So API there were a little bit bottlenecks, which are being now addressed.

Thank you for answering my questions. All the best.

Thank you. Th Services. Please go ahead.

Sir, just again on Unichem, given that they are als o now primarily into U.S. business and Ipca also has. So any thoughts on sort of merging Un

No, no. There is no currently any such plans. But the product folio of Unichem and Ipca except few products which are common, rest are all differe nt products. And as Mr. Jain has said, we are already having a plan to t Australia and New Zealand, most of the Europe and a lso ROW market, that action plan is already on, product registration, document generation, all work is happening.

And of course, separate listed entities?

We have not thought on that so far. Just we are try ing to now consolidate and improve Unichem performance. That is our focus.

And sir, just secondly on domestic formulation, if you could share price volume new launches data for the quarter and for 9 months?

See one particular reason for not taking up consoli dation is also because we are looking for a strategy of hedging. I Ipca Laboratories Limited February Once we do progression in our U.S. business through Unichem, whatever overhead recovery will also improve. That will also indirectly benefi t me as well as my API add production. So all those benefits will come over a period of time as and we go on improving our U.S. business. Understood. And when it comes to Unichem's own faci lities, I think they are at 50% to 60% utilization. Is my understandin g correct? That is also gradually improving. Goa, too, which w as newly commissioned, there also they have started gradually ramping up the production. S o all -round improvement is there in the Unichem productivity also. That is also one of th e reasons why operating cost is coming down because of higher production. So all verticals, whe rever operational efficiency can be encashed, everything is being worked on. Understood. And sir, in how many years do you see t hat you would be almost fully utilizing the Unichem facilities... So next 4 to 5 years, I don't think they will need any further capacity other than routine capacity improvement plans and all. And whatever AP I they want to produce going forward is already happening at Pithampur API site. Formulatio n, they have adequate capacity available. So API there were a little bit bottlenecks, which are being now addressed. Thank you for answering my questions. All the best. you. Th e next question is from the line of Tushar from Mot ilal Please go ahead. Sir, just again on Unichem, given that they are als o now primarily into U.S. business and Ipca also has. So any thoughts on sort of merging Un ichem along with Ipca? No, no. There is no currently any such plans. But the product folio of Unichem and Ipca except few products which are common, rest are all differe nt products. And as Mr. Jain has said, we are already having a plan to t ake their products to other markets they were hitherto not present, Australia and New Zealand, most of the Europe and a lso ROW market, that action plan is already on, product registration, document generation, all work is happening. And of course, the business-wise integration is very much happening, but then w hy to have 2 separate listed entities? We have not thought on that so far. Just we are try ing to now consolidate and improve Unichem performance. That is our focus. sir, just secondly on domestic formulation, if you could share price volume new launches data for the quarter and for 9 months? See one particular reason for not taking up consoli dation is also because we are looking for a strategy of hedging. I f anything happens to Ipca or anything happens to U nichem like we have Laboratories Limited February 13, 2025 Once we do progression in our U.S. business through Unichem, whatever overhead recovery will also improve. That will also indirectly benefi t me as well as my API add itional production. So all those benefits will come over a period of time as and we go on improving Understood. And when it comes to Unichem's own faci lities, I think they are at 50% to 60% That is also gradually improving. Goa, too, which w as newly commissioned, there also they round improvement is there in the e reasons why operating cost is coming down because of higher production. So all verticals, whe rever operational efficiency can be almost fully utilizing So next 4 to 5 years, I don't think they will need any further capacity other than routine capacity improvement plans and all. And whatever AP I they want to produce going forward already happening at Pithampur API site. Formulatio n, they have adequate capacity available. So API there were a little bit bottlenecks, which are being now addressed. e next question is from the line of Tushar from Mot ilal Oswal Financial Sir, just again on Unichem, given that they are als o now primarily into U.S. business and Ipca No, no. There is no currently any such plans. But the product folio of Unichem and Ipca except few products which are common, rest are all differe nt products. And as Mr. Jain has said, we ake their products to other markets they were hithe rto not present, Australia and New Zealand, most of the Europe and a lso ROW market, that action plan is already on, product registration, document generation, all work is happening. wise integration is very much happening, but then w hy to have 2 We have not thought on that so far. Just we are try ing to now consolidate and improve sir, just secondly on domestic formulation, if you could share price volume new launches See one particular reason for not taking up consoli dation is also because we are looking for a f anything happens to Ipca or anything happens to U nichem like we have burned our fingers in past, so we don't want that s ituation to have. keeping quality and manufacturing everything separa te. And happ ening, you can produce product utilizing other capacities and all. So business disturbance doesn't happen. And therefo re, currently, there is no such idea of merging both of them. Because at the top of the min d of management is always there, that it shoul d operate as a hedging for each other.

Sure, sir. Sir, if you could address the domestic f ormulation questions, price volume, new launches.

Pardon, Tushar, what was your question?

Sir, price volume and new launches for the

Most of the growth was because of volume. New launc hes are hardly anything. Price may be overall 5% to 6%, not more than that. And as you re collect, last year, there was hardly any price increase in NLEM products.

Understood. That’s it.

Th ank you. Th Please go ahead.

And with respect to margins at standalone level, ju st wanted to understand going ahead, how do we -- I mean, are there any other, as you said raw materi als, we did not get much of but you're saying it's only by the mix. So how do you l ook at going ahead? Is there any other operational levers at standalone level that we can show any improvement or you kinds of m ore improvement will be slower?

Other than material cost, there was some increase i n manpower cost because of addition of people. So as you recollect, the last 1, 1.5 years, we have added a lot of people in the domestic market. Now they are slowly becoming productive for the company. So going forward, there will be some benefit out of growth or they will bri ng. So overall, our guidance stays going forward also maybe next 3, 4 years, 100 to 150 basis point margin improvem

See, normally, our material costs used to be around 20% of overall sales. Currently, it is around 21.5% or near about, it's largely because of addition of people. And a lot of those additions, which we have made in the past are takes time, somewhere in normal therapies, it takes around 3 years' time. Chronic is sometimes it takes a little more. So som e of the people have become productive in very second year is yet to become productive. And as their productivity moves up, we'll have overall good set of numbers. Ipca Laboratories Limited February burned our fingers in past, so we don't want that s ituation to have. And therefore, we are keeping quality and manufacturing everything separa te. And -- so in the event of anything ening, you can produce product utilizing other capacities and all. So business disturbance doesn't happen. And therefo re, currently, there is no such idea of merging both of them. Because at the top of the min d of management is always there, that it d operate as a hedging for each other. Sure, sir. Sir, if you could address the domestic f ormulation questions, price volume, new Pardon, Tushar, what was your question? Sir, price volume and new launches for the quarter? Most of the growth was because of volume. New launc hes are hardly anything. Price may be overall 5% to 6%, not more than that. And as you re collect, last year, there was hardly any price increase in NLEM products. Understood. That’s it. Thank you. ank you. Th e next question is from the line of Shiva from Purnartha Investment Advisors Please go ahead. And with respect to margins at standalone level, ju st wanted to understand going ahead, how I mean, are there any other, as you said raw materi als, we did not get much of but you're saying it's only by the mix. So how do you l ook at going ahead? Is there any other operational levers at standalone level that we can show any improvement or you ore improvement will be slower? Other than material cost, there was some increase i n manpower cost because of addition of people. So as you recollect, the last 1, 1.5 years, we have added a lot of people in the domestic market. Now they are slowly becoming productive for the company. So going forward, there will be some benefit out of growth or they will bri ng. So overall, our guidance stays going forward also maybe next 3, 4 years, 100 to 150 basis point margin improvem ent should come. See, normally, our material costs used to be around 20% of overall sales. Currently, it is around 21.5% or near about, it's largely because of addition of people. And a lot of those additions, which we have made in the past are yet to become productive. They are takes time, somewhere in normal therapies, it takes around 3 years' time. Chronic is sometimes it takes a little more. So som e of the people have -- a few divisions has become productive in very second year . But on chronic side, whatever numbers we added, t hat is yet to become productive. And as their productivity moves up, we'll have overall good set of Laboratories Limited February 13, 2025 And therefore, we are so in the event of anything So business disturbance doesn't happen. And therefo re, currently, there is no such idea of merging both of them. Because at the top of the min d of management is always there, that it Sure, sir. Sir, if you could address the domestic f ormulation questions, price volume, new Most of the growth was because of volume. New launc hes are hardly anything. Price may be overall 5% to 6%, not more than that. And as you re collect, last year, there was hardly any Shiva from Purnartha Investment Advisors . And with respect to margins at standalone level, ju st wanted to understand going ahead, how I mean, are there any other, as you said raw materi als, we did not get much of but you're saying it's only by the mix. So how do you l ook at going ahead? Is there any other operational levers at standalone level that we can show any improvement or you feel these Other than material cost, there was some increase i n manpower cost because of addition of people. So as you recollect, the last 1, 1.5 years, we have added a lot of people in the domestic market. Now they are slowly becoming productive for the company. So going forward, there will be some benefit out of growth or they will bri ng. So overall, our guidance stays going ent should come. See, normally, our material costs used to be around 20% of overall sales. Currently, it is around 21.5% or near about, it's largely because of addition of people. And a lot of those yet to become productive. They are -- because it a few divisions has . But on chronic side, whatever numbers we added, t hat is yet to become productive. And as their productiv ity moves up, we'll have overall good set of Currently, in current financials, we are seeing tha t permanent productivity has gone up by almo st around 20,000, on an average on a total around 6 ,700 people. So that's overall productivity improvement in the field. And this pro ductivity improvement will keep on happening because we have added a significant number of people in last few years.

Okay. So to understand correctly, if there is no mu ch change in the raw materials, the most of the production or the margin benefit will flow thro ugh from the employee cost is what you're saying?

Yes, employment cost also will happen, then over capacity utilizations will also help in overall better improvement...

Operating leverage. Okay. And you're saying about t he MR. So if you could just give some details about the present MR and what is the divisions, like 2 years ago, we made additional 4 divisions, how are their productivity?

Overall, I think we have around 6,700 people curren tly. And overall productivity per month is around 4,45,000.

4,35,000, for this quarter?

4,45,000.

This is for this quarter?

Yes, up to 9 months current year.

Okay, 9 months. Okay. And how does that compare to the last year?

It was around 4,25,000 with 6,300 peopl

Okay. And what do you new divisions? How will that look like once they settle down in 1.5 year 1 or 2 years?

Productivity eac 25,000, 30,000 average productivity improvements wi ll be there, on a continuous basis. In terms of current improvement, what we are seeing in current year, that improvement wil continue even after addition of people.

Understood. And how is your initial experience? I m ean you said that you've sent it to U.S. market last quarter, how was the initial feedback a nd how are you finding it right now in this quarter in hand?

See, Unichem team has already started bidding for t he products in which we have a cost competency. So slowly and steadily, they are gainin g orders. But it will take time because there are already other players in the market and t he sellers are people. So it works on contracts, 3 months, 6 months. So as and when people come for bidding that time we participate. So there will be some ges tation period from the day the goods is Ipca Laboratories Limited February Currently, in current financials, we are seeing tha t permanent productivity has gone up by st around 20,000, on an average on a total around 6 ,700 people. So that's overall productivity improvement in the field. And this pro ductivity improvement will keep on happening because we have added a significant number of people in last few years. Okay. So to understand correctly, if there is no mu ch change in the raw materials, the most of the production or the margin benefit will flow thro ugh from the employee cost is what you're Yes, employment cost also will happen, then over all -- since once U.S. business pick up, then capacity utilizations will also help in overall better improvement... Operating leverage. Okay. And you're saying about t he MR. So if you could just give some details about the present MR and what is the productivity at an overall level and the 4 divisions, like 2 years ago, we made additional 4 divisions, how are their productivity? Overall, I think we have around 6,700 people curren tly. And overall productivity per month is around 4,45,000. 4,35,000, for this quarter? This is for this quarter? Yes, up to 9 months current year. Okay, 9 months. Okay. And how does that compare to the last year? It was around 4,25,000 with 6,300 peopl e. Currently, 6,700 and 4,45,000 per month. Okay. And what do you -- once they settle down what kind of number do they h it, I mean the new divisions? How will that look like once they settle down in 1.5 year 1 or 2 years? Productivity eac h year, even if there is 300, 400 people additions will continue to have around 25,000, 30,000 average productivity improvements wi ll be there, on a continuous basis. In terms of current improvement, what we are seeing in current year, that improvement wil continue even after addition of people. Understood. And how is your initial experience? I m ean you said that you've sent it to U.S. market last quarter, how was the initial feedback a nd how are you finding it right now in this quarter in hand? See, Unichem team has already started bidding for t he products in which we have a cost competency. So slowly and steadily, they are gainin g orders. But it will take time because there are already other players in the market and t he sellers are already tied up with other people. So it works on contracts, 3 months, 6 months. So as and when people come for bidding that time we participate. So there will be some ges tation period from the day the goods is Laboratories Limited February 13, 2025 Currently, in current financials, we are seeing tha t permanent productivity has gone up by st around 20,000, on an average on a total around 6 ,700 people. So that's overall productivity improvement in the field. And this pro ductivity improvement will keep on happening because we have added a significant number of people in last few years. Okay. So to understand correctly, if there is no mu ch change in the raw materials, the most of the production or the margin benefit will flow thro ugh from the employee cost is what you're since once U.S. business pick up, then Operating leverage. Okay. And you're saying about t he MR. So if you could just give some productivity at an overall level and the 4 divisions, like 2 years ago, we made additional 4 divisions, how are their productivity? Overall, I think we have around 6,700 people curren tly. And overall productivity per month is e. Currently, 6,700 and 4,45,000 per month. once they settle down what kind of number do they h it, I mean the new divisions? How will that look like once they settle down in 1.5 year 1 or 2 years? h year, even if there is 300, 400 people additions will continue to have around 25,000, 30,000 average productivity improvements wi ll be there, on a continuous basis. In terms of current improvement, what we are seeing in current year, that improvement wil l Understood. And how is your initial experience? I m ean you said that you've sent it to U.S. market last quarter, how was the initial feedback a nd how are you finding it right now in this See, Unichem team has already started bidding for t he products in which we have a cost competency. So slowly and steadily, they are gainin g orders. But it will take time because already tied up with other people. So it works on contracts, 3 months, 6 months. So as and when people come for bidding that time we participate. So there will be some ges tation period from the day the goods is received and your sales commence. And then th quarter.

And the growth guidance you're sticking with the guidance that you've given?

Yes. So it is in line with whatever we are expecting.

Okay. Thank you. I will get back.

Th ank you. Th ahead.

On the EBITDA m it be fair that presume the domestic busin some color given the fact that the employee product ivities are rising, raw material prices have come down. Qualitatively, if you can talk about the profitability or EBITDA margin for the domestic business?

See, Mr. Jain has already explained, the major reas on for this number is because of product mix change. So if you see business wise, there is h ardly any change in whatever we have been telling from the beginning gross margin margins and when the margins better business improv es, the overall EBITDA and gross margin improves, it is that way. And wherever there is better margin, those busines example, domestic and branded formulation business, ROW market. Typically, they have the highest margin in the company's overall top line.

If you look at, let's say, current year, antimalari als has not gr antimalarial. Antibacterial is also a low growth. Cough and cold is also generally a low and that cost of packaging is high on other products margin, business has grown faster an d better where margins are better. So that is also reflecting in the overall EBITDA margin.

Yes. So basically, sir, what I was tryi 24% margin, your business has API, institutional on the lower side and ROW India business are probably higher than the company average. So I' m just wondering if it is significantly higher or margin the domestic business?

Domestic margin will further improve. As the produc tivity improve, margins will keep on improving and margins are definitely higher.

And sir, the other question I wanted to ask is now since the businesses have stabilized on a growth path, what are the new areas the management is thinking about investing whether it is Ipca Laboratories Limited February received and your sales commence. And then th ere will be a gradual progress quarter after And the growth guidance you're sticking with the guidance that you've given? So it is in line with whatever we are expecting. Okay. Thank you. I will get back. ank you. Th e next question is from the line of Saion Mukherjee from Nomura. On the EBITDA m argin front, I think on a stand alone basis, you are already 23%, 24%. Would it be fair that presume the domestic busin ess margins are materially higher, if you can give some color given the fact that the employee product ivities are rising, raw material prices have come down. Qualitatively, if you can talk about the profitability or EBITDA margin for the domestic business? And what are your expectations on that going forward? See, Mr. Jain has already explained, the major reas on for this number is because of product mix change. So if you see business wise, there is h ardly any change in whatever we have been elling from the beginning gross margin -wise. So only business- wise, there are different margins and when the margins better business improv es, the overall EBITDA and gross margin improves, it is that way. And wherever there is better margin, those busines ses, we are growing year after year. For example, domestic and branded formulation business, ROW market. Typically, they have the highest margin in the company's overall top line. If you look at, let's say, current year, antimalari als has not gr own. We have lowest margin in antimalarial. Antibacterial is also a low -margin business, that has not grown. It's just 1% growth. Cough and cold is also generally a low -margin business because it's all bottle packings and that cost of packaging is high on the products, so that business has just grown by 4% . All other products margin, business has grown faster an d better where margins are better. So that is also reflecting in the overall EBITDA margin. Yes. So basically, sir, what I was tryi ng to get at is the fact that -- I mean, if I look at 23%, 24% margin, your business has API, institutional on the lower side and ROW India business are probably higher than the company average. So I' m just wondering if it is significantly higher or margin ally higher than where you -- where standalone margins are, particularly for the domestic business? Domestic margin will further improve. As the produc tivity improve, margins will keep on improving and margins are definitely higher. And sir, the other question I wanted to ask is now since the businesses have stabilized on a growth path, what are the new areas the management is thinking about investing whether it is Laboratories Limited February 13, 2025 ere will be a gradual progress quarter after And the growth guidance you're sticking with the guidance that you've given? from Nomura. Please go alone basis, you are already 23%, 24%. Would ess margins are materially higher, if you can give some color given the fact that the employee product ivities are rising, raw material prices have come down. Qualitatively, if you can talk about the profitability or EBITDA margin for the See, Mr. Jain has already explained, the major reas on for this number is because of product mix change. So if you see business wise, there is h ardly any change in whatever we have been wise, there are different margins and when the margins better business improv es, the overall EBITDA and gross ses, we are growing year after year. For example, domestic and branded formulation business, ROW market. Typically, they have the own. We have lowest margin in margin business, that has not grown. It's just 1% margin business because it's all bottle packings the products, so that business has just grown by 4% . All other products margin, business has grown faster an d better where margins are better. So that I mean, if I look at 23%, 24% margin, your business has API, institutional on the lower side and ROW India business are probably higher than the company average. So I' m just wondering if it is significantly where standalone margins are, particularly for Domestic margin will further improve. As the produc tivity improve, margins will keep on And sir, the other question I wanted to ask is now since the businesses have stabilized on a growth path, what are the new areas the management is thinking about investing whether it is India or U.S. if you can share any plans that you w ant to new initiatives that you are taking?

See, the new areas at number one is, let's say, we are leaders in pain management. And as far as the orthopedics and dentals are concerned, we ha ve significant leadership there kind of products. And now we are trying to leverage those relationships and now started a new division called Flexicare for adding the people orthopedics for other indications because pain is o ne area, products. So gradually, we are ramping up. Right now, divisio n is people. Recruitment of people is going on. So maybe another 200 people will be added in. I think next year that division w reach to the breakeven point because we have a strong relationship in this therapy area. So we should be able to looking at. Another area we're looking at cardiovasculars, now we have started beating the market growth and significantly compared to the mar ket and all. And this is the further time for us to further consolidate our offering in the market. So next financial year, cardiology. Then another area is dermatology that we have done well and build the business on dermatology in the last few years. And we are missi ng on cosmetic dermatology. So we have lined u p the products And I think one more division we will add in next f inancial year, from there in the mid of the next financial year on cosmetic dermatology. So whe rever areas, like say, urology, we are doing well. So giving us almost around 20% kind of 22% kind of growth. So some people additions will happen in urology area. So all these therapy areas where we are continuously consolidating, which are the high areas. So that's a continuous journey.

And anything on the U.S., sir, in terms of ANDA fil ing across Unichem and Ipca? Any product category segment? And how should we think a bout the research and development expenditure, what is it

Let's say, our business philosophy is that we, by a nd large, use our captive product for the ANDA developments and all. So now last, I think, 10, 12 years, Ipca has not filed anything but right now, there are a goo and all. So I think every year, we should be able t o now file 5, 6 kinds of Ipca ANDAs, so Unichem will also continue to do that kind of numbe r. And more or less, it's going to remain from, l et's say, captive API. Some of the products we may outsource also. But broadly, so it's not that we have to file end n umber of products because our strategy is to always keep backward integrated products for forward integrations and all. So more or less, are not changing that strategy. So it will remain in that line. Ipca Laboratories Limited February India or U.S. if you can share any plans that you w ant to -- that you can share at this point on new initiatives that you are taking? See, the new areas at number one is, let's say, we are leaders in pain management. And as far as the orthopedics and dentals are concerned, we ha ve significant leadership there kind of products. And now we are trying to leverage those relationships and now started a new division called Flexicare for adding the people -- adding the product for which are used by orthopedics for other indications because pain is o ne area, but they prescribe a lot of other So gradually, we are ramping up. Right now, divisio n is -- we have just added around 150 people. Recruitment of people is going on. So maybe another 200 people will be added in. I think next year that division w ill be end, we expect that turnaround and faster wh ich should reach to the breakeven point because we have a strong relationship in this therapy area. So we should be able to -- so we are leveraging those relationships. So that o ne area we are Another area we're looking at cardiovasculars, now we have started beating the market growth and significantly compared to the mar ket and all. And this is the further time for us to further consolidate our offering in the market. So next financial year, we will, again, adding 1 more division with around 300 people in cardiology. Then another area is dermatology that we have done well and build the business on dermatology in the last few years. And we are missi ng on cosmetic dermatology. So we have p the products -- a lot of products under development and all. And I think one more division we will add in next f inancial year, from there in the mid of the next financial year on cosmetic dermatology. So whe rever areas, like say, urology, we are So giving us almost around 20% kind of 22% kind of growth. So some people additions will happen in urology area. So all these therapy areas where we are continuously consolidating, which are the high -growth areas for us. So we are further investing on areas. So that's a continuous journey. And anything on the U.S., sir, in terms of ANDA fil ing across Unichem and Ipca? Any product category segment? And how should we think a bout the research and development expenditure, what is it now and how much can increase? Let's say, our business philosophy is that we, by a nd large, use our captive product for the ANDA developments and all. So now last, I think, 10, 12 years, Ipca has not filed anything but right now, there are a goo d number of product pipelines, which are there unde r development and all. So I think every year, we should be able t o now file 5, 6 kinds of Ipca ANDAs, so Unichem will also continue to do that kind of numbe r. And more or less, it's going to remain et's say, captive API. Some of the products we may outsource also. But broadly, so it's not that we have to file end n umber of products because our strategy is to always keep backward integrated products for forward integrations and all. So more or less, are not changing that strategy. So it will remain in that line. Laboratories Limited February 13, 2025 you can share at this point on See, the new areas at number one is, let's say, we are leaders in pain management. And as far as the orthopedics and dentals are concerned, we ha ve significant leadership there on those kind of products. And now we are trying to leverage those relationships and now started a new adding the product for which are used by but they prescribe a lot of other we have just added around 150 people. Recruitment of people is going on. So maybe another 200 people will be added in. I ill be end, we expect that turnaround and faster wh ich should reach to the breakeven point because we have a strong relationship in this therapy area. so we are leveraging those relationships. So that o ne area we are Another area we're looking at cardiovasculars, now we have started beating the market growth and significantly compared to the mar ket and all. And this is the further time we will, again, adding 1 more division with around 300 people in cardiology. Then another area is dermatology that we have done well and build the business on dermatology in the last few years. And we are missi ng on cosmetic dermatology. So we have And I think one more division we will add in next f inancial year, from there in the mid of the next financial year on cosmetic dermatology. So whe rever areas, like say, urology, we are So giving us almost around 20% kind of 22% kind of growth. So some people additions will happen in urology area. So all these therapy areas where we are continuously growth areas for us. So we are further investing on those And anything on the U.S., sir, in terms of ANDA fil ing across Unichem and Ipca? Any product category segment? And how should we think a bout the research and development Let's say, our business philosophy is that we, by a nd large, use our captive product for the ANDA developments and all. So now last, I think, 10 , 12 years, Ipca has not filed anything but d number of product pipelines, which are there unde r development and all. So I think every year, we should be able t o now file 5, 6 kinds of Ipca ANDAs, so Unichem will also continue to do that kind of numbe r. And more or less, it's going to remain But broadly, so it's not that we have to file end n umber of products because our strategy is to always keep backward integrated products for forward integrations and all. So more or less, we

And R&D spend, sir?

Currently, both Ipca and Unichem put together, it's around 3%, 3.25% kind of R&D cost. That cost is likely to move to around 4%.

Okay. Thank you.

Thank you. The Please go ahead.

Sir, in the second quarter, you had mentioned that there was some U.S. sales at was shipped out,

Sorry, you're not audible now, Harsh. What was your question?

So we were saying that there were some U.S. sales i n second quarter that we they were shipped out, the third quarter?

You are not audible.

Sir, I just request you to rejoin, please. The next question is from the line of B Equirus. Please go ahead.

So sir, we have done phenomenally well in the past years in domestic business. So how do you see this business behaving as compared to IPM in th e at least next 2, 3 years, if you talk a bit about it?

So more or less, whatever our growth, 1.5x IPM grow th, hopefully, we should continue with that coming few years.

And how big our pain management therapy would be in the overall business?

About 52%.

Sir, somewhere the largest product would be Zerodol and if I'm not wrong that product is almost INR 750 crores,

In spite of that, the pain therapy has grown by 14% in the 9 months of the current financial year.

Are we calling out how big is Zerodol for us at this moment?

So 2 Zerodol SKUs are amongst the top 300 selling country.

Right. So are you expecting pain management to stay at almost like at 13%, 14% forward as well? Is it possible to... Ipca Laboratories Limited February And R&D spend, sir? Currently, both Ipca and Unichem put together, it's around 3%, 3.25% kind of R&D cost. That cost is likely to move to around 4%. Okay. Thank you. Thank you. The next question is from the line of Harsh Bhatia from Bandhan Mutual Fund. Please go ahead. Sir, in the second quarter, you had mentioned that there was some U.S. sales at was shipped out, but not booked. Have we booked those sales this quarter? Sorry, you're not audible now, Harsh. What was your question? So we were saying that there were some U.S. sales i n second quarter that we they were shipped out, but not booked in the second quarter. Those sales h ave been booked in the third quarter? You are not audible. Sir, I just request you to rejoin, please. The next question is from the line of B Please go ahead. So sir, we have done phenomenally well in the past years in domestic business. So how do you see this business behaving as compared to IPM in th e at least next 2, 3 years, if you talk a bit So more or less, whatever our growth, 1.5x IPM grow th, hopefully, we should continue with that coming few years. And how big our pain management therapy would be in the overall business? Sir, somewhere the largest product would be Zerodol and if I'm not wrong that product is 750 crores, INR800 crores... In spite of that, the pain therapy has grown by 14% in the 9 months of the current financial calling out how big is Zerodol for us at this moment? So 2 Zerodol SKUs are amongst the top 300 selling -- 3 SKUs, top 300 selling brands in the Right. So are you expecting pain management to stay at almost like at 13%, 14% forward as well? Is it possible to... Laboratories Limited February 13, 2025 Currently, both Ipca and Unichem put together, it's around 3%, 3.25% kind of R&D cost. That next question is from the line of Harsh Bhatia from Bandhan Mutual Fund. Sir, in the second quarter, you had mentioned that there was some U.S. sales at Ipca level that So we were saying that there were some U.S. sales i n second quarter that we re not booked, but not booked in the second quarter. Those sales h ave been booked in Sir, I just request you to rejoin, please. The next question is from the line of B harat from So sir, we have done phenomenally well in the past years in domestic business. So how do you see this business behaving as compared to IPM in th e at least next 2, 3 years, if you talk a bit So more or less, whatever our growth, 1.5x IPM grow th, hopefully, we should continue with And how big our pain management therapy would be in the overall business? Sir, somewhere the largest product would be Zerodol and if I'm not wrong that product is In spite of that, the pain therapy has grown by 14% in the 9 months of the current financial 3 SKUs, top 300 selling brands in the Right. So are you expecting pain management to stay at almost like at 13%, 14% growth going

Yes, definitely, unless pain management grows 13%, 14%, I can't grow 1.5x the market growth. So that is almost 52% of my overall business.

But what is driving this growth in the growth will be maintained? Because we'll be coverin g large part of the market, doctor access will be also one of the foremost when it comes to t he pain management. So how we are looking to maintain th

Let's say, not only osteoarthritis product, but rhe umatoid arthritis products are also growing faster. And if more penetration of disease presence in the country is very high. It's all we had to create enabling m rheumatologist to the other areas and educating doctors and all. So rheumatology portfolio, is last 10, 15 years, al so, we have seen continuously it's growing 1.5x the market growth. down. Significant work is still to be done to make all these therapies available in any nook and corner of the country. And as far as the pain is concerned, Zerodol is con tinuously growing. it is growing faster than the overall IPM, it's alm ost around 1.5x the market is growing. And we don't see any kind of problem in growing this th erapy also in next 3, 4 years at current pace. So we are not seeing any kind of chal concerned, there are not much on particularly on os teoarthritis side. On rheumatoid arthritis side, yes, there are a lot of opportunities and of the new patented products, and we are working on everything continue to add the new product portfolios as and when the patent expiry happens and all. So we -- and also, we are further augmenting our ortho offer ing by addition of new d which we are currently in the process of doing that so that we can leverage those relations in the -- particularly in ortho segment. So that segment will continue to remain focus for us, and we will -- we don't foresee any kind of difficulty in g faster than the overall company growth.

And every major product I'm selling in pain categor y, I'm the market leader and my growth is higher than the market growth.

Okay. Sure. Thanks a lot,

Thank you. As there are no further questions from the particip ants, I will hand the conference over to the management for closing comments. Over to you, sir.

No, more or less most of the a anything further to be added. Thank you. Thank you all the participants. Thank you very much. Ipca Laboratories Limited February Yes, definitely, unless pain management grows 13%, 14%, I can't grow 1.5x the market growth. So that is almost 52% of my overall business. But what is driving this growth in the overall pain management? If you could talk and how this growth will be maintained? Because we'll be coverin g large part of the market, doctor access will be also one of the foremost when it comes to t he pain management. So how we are looking to maintain th is growth going forward as well? Let's say, not only osteoarthritis product, but rhe umatoid arthritis products are also growing faster. And if more penetration of disease presence in the country is very high. It's all we had to create enabling m ore number of rheumatologists practicing in the mar ket and taking those rheumatologist to the other areas and educating doctors and all. So rheumatology portfolio, is last 10, 15 years, al so, we have seen continuously it's growing 1.5x the market growth. And we don't foresee next 5 years also that growth rate can come down. Significant work is still to be done to make all these therapies available in any nook and corner of the country. And as far as the pain is concerned, Zerodol is con tinuously growing. Even in this market, also it is growing faster than the overall IPM, it's alm ost around 1.5x the market is growing. And we don't see any kind of problem in growing this th erapy also in next 3, 4 years at current So we are not seeing any kind of chal lenge. And as far as the new product offerings are concerned, there are not much on particularly on os teoarthritis side. On rheumatoid arthritis side, yes, there are a lot of opportunities and of the new patented products, and we are working on everything of that. So we are keeping our complete hold on tha t kind of things, and we will continue to add the new product portfolios as and when the patent expiry happens and all. and also, we are further augmenting our ortho offer ing by addition of new d which we are currently in the process of doing that so that we can leverage those relations in particularly in ortho segment. So that segment will continue to remain focus for us, and we don't foresee any kind of difficulty in g rowing this business. In fact, it will grow faster than the overall company growth. And every major product I'm selling in pain categor y, I'm the market leader and my growth is higher than the market growth. Okay. Sure. Thanks a lot, sir . As there are no further questions from the particip ants, I will hand the conference over to the management for closing comments. Over to you, sir. No, more or less most of the a reas we have covered in the con call . I don't think there is anything further to be added. Thank you. Thank you all the participants. Thank you very much. Laboratories Limited February 13, 2025 Yes, definitely, unless pain management grows 13%, 14%, I can't grow 1.5x the market overall pain management? If you could talk and how this growth will be maintained? Because we'll be coverin g large part of the market, doctor access will be also one of the foremost when it comes to t he pain management. So how we are Let's say, not only osteoarthritis product, but rhe umatoid arthritis products are also growing faster. And if more penetration of disease presence in the country is very high. It's all we had ore number of rheumatologists practicing in the mar ket and taking those So rheumatology portfolio, is last 10, 15 years, al so, we have seen continuously it's growing And we don't foresee next 5 years also that growth rate can come down. Significant work is still to be done to make all these therapies available in any nook and Even in this market, also it is growing faster than the overall IPM, it's alm ost around 1.5x the market is growing. And we don't see any kind of problem in growing this th erapy also in next 3, 4 years at current lenge. And as far as the new product offerings are concerned, there are not much on particularly on os teoarthritis side. On rheumatoid arthritis side, yes, there are a lot of opportunities and of the new patented products, and we are working of that. So we are keeping our complete hold on tha t kind of things, and we will continue to add the new product portfolios as and when the patent expiry happens and all. and also, we are further augmenting our ortho offer ing by addition of new d ivisions, which we are currently in the process of doing that so that we can leverage those relations in particularly in ortho segment. So that segment will continue to remain focus for us, and rowing this business. In fact, it will grow And every major product I'm selling in pain categor y, I'm the market leader and my growth is As there are no further questions from the particip ants, I will hand the conference . I don't think there is anything further to be added. Thank you. Thank you all the participants. Thank you very much.

Thank you , sir Thank you for joining us, and you m Ipca Laboratories Limited February , sir . On behalf of DAM Capital Advisors Limited, that c oncludes this conference. Thank you for joining us, and you m ay now disconnect your lines. Thank you. Laboratories Limited February 13, 2025 . On behalf of DAM Capital Advisors Limited, that c oncludes this conference. ay now disconnect your lines. Thank you.