Zydus Lifesciences Limited analyst Q&A

Thank you, Sir. We will now open the call for Q&A session. We will wait for a few minutes until the queue assembles. We request participants to re strict to 2 questions and then return to the queue for more questions. Please raise your hand from the ‘participant’ tab on the screen to ask the questions. The first question is from Kunal Dhamesha.

Hi, this is Kunal from Macquarie. Thanks for taking my question and congratulations on good set of numbers. First one for you, Sharvil Bhai, FY26 has been exceptionally strong for us, where do you see FY27 , from the growth perspective as well as the profitability perspective? Any outlook here would be helpful.

Thank you, Kunal. So, I think , we are very happy with the 2026 performance. Looking forward, I think , on the consolidated revenue , we still continue to see high teens growth for FY27. We do expect that in spite of a high base of FY26 for North America, we will still see a growth, single digit growth, in the North American business aided by the portfolio. 8 of 22 In India, we have now consistently demonstrated better than market growth and we are thinking , we will outperform the market by 200 -400 basis points versus the current IPM. On the international markets, we have seen very significant 40 % plus compound, I mean, growth for the year and 45% for the quarter and we see that momentum continuing also in the current year. And with the consumer, on the consumer side also , we see a good momentum on double digit growth. So, I think , overall on the revenue side, we see a strong momentum for the organization. On the margins front, we ended this quarter at around 25 point, around close to 26 %. I think FY27 , looking at competition, also Revlimid competition, Mirabegron competition, expenses related to Saro launch, we are expecting margins in excess of 24%.

Sure.

It still assumes 8% of R&D expense.

Okay, perfect. And , Sharvil Bhai, on the specialty front, now we have almost 3 molecules, especially the rare disease molecule in the market through Sentynl. We also have kind of 505(b)(2) portfolio through Zituvio Zituvimet. So, if we put all these together, which are, let's say, you know, high entry barrier kind of molecule, what would be the current contribution of this portfolio? And with our pipeline that we have Saroglitazar for PBC, Desidustat in China, where do we see this contribution going over the next 3-4 years for our overall business?

So, currently, see, I think we are building on the three legs that you just mentioned. We have Sentynl, which has now three approved drugs. And with this it has become, you know, it has broken even and is going to make profits going forward. I think, with adding more portfolio to that business, we would see that business scale up but this will be high profitable businesses but not high value driven businesses. On the 505(b)(2), we have now today, obviously, a sitagliptin franchise. The scale up is getting along with our oncology supportive care through the in -licensing that we did on Beizray, with also the LiqMeds portfolio scaling up. I think this will become a more faster scalable business very soon and also very profitable as we are able to launch these products, including Ranibizumab, by end of the year. So, we would see, I think, ‘27 onwards good momentum and size for this business. This is just the beginning, I would say, this year. So, FY28 would be seeing a stronger momentum but this year also will be quite a good growth for these businesses. 9 of 22 And, finally, Saro, we are still in the early commercialization in the sense of hiring teams and preparing for the pre -launch activity. As we come closer to approval and launch, we can share more details. But, overall, yes, our vision is that our non-generic specialty portfolio will be the meaningful growth driver for the organization over the next 3-5 years.

Sure, that is great. Lastly, on this Assertio, I mean, potential acquisition of Assertio, how that kind of fits into, I mean, all these three growth driver? The product Rolvedon, we have seen it's primarily for the Onco supportive care, mainly competing with Pegfilgrastim, if I'm correct. So, how does that, you know, within that space, that product kind of how is it positioned? I believe Pegfilgrastim also has a device which kind of lets people administer the therapy at home rather than spending another day in clinic. So , how Rolvedon compares there as well as on some bit of clinical efficacy and safety side for us to kind of, you know, be more positive ? I mean, how are you seeing positioning this molecule?

So, we already have a supportive oncology team, which currently markets Beizray. We have also partnered with RK for one more future supportive 505(b)(2), which has been filed, and we hope in the next 9 -12 months we will see the approval and launch. This again adds to the portfolio of this team for launch. So, we have already a commercial platform to launch Rolvedon. Today, we believe it has around a 4% volume share. It has many benefits. One, it's still a novel, long-acting GCSF and not a biosimilar and it also can be administered the same day versus the other biosimilars or biologics in the market. So , there is a benefit to that. And we see the good momentum, the business tracking and we are very confident on once the acquisition is closed, how do we integrate it with the business and scale it up. So, that's the overall plan and currently will be a pipeline of three. We also have Ranibizumab launch coming and we see also that with the current team and certain resources, we can use them also for the scale up of Ranibizumab.

So, the commercial presence would be leveraged across many fronts , right? That is the way to look at it?

Yes.

Assertio presence and.

Yes.

And that 24% plus EBITDA margin guidance bakes in that incremental commercial presence that we are going to build for , let's say , Saro or maybe let's say for Assertio? 10 of 22

Yes. Assertio we are not building yet but Saro is part of our plan. But Assertio will not have a cost. I mean, we will see more synergies versus cost.

Sure. I have more questions, I'll join back the queue. Thank you.

Thank you.

Thank you. The next question is from Ms. Neha Manpuria.

Yeah, thanks for taking my question. My first question is on the India business. I think, you mentioned 200-400 basis points higher growth in India versus the market. I can see that obviously there has been an improvement in growth in the last two quarters for Zy dus. Could you talk a little bit about what gives you the confidence on maintaining this outperformance incrementally? Where would you see more growth coming from in India? And, second, just a related question on India. Do you think , we need to make more investment in India either through MR expansion or probably acquiring more products to boost growth or using the investment base and , therefore, this growth should drive margin expansion for the business?

Currently, we don't see any further rep investment in the short term. I think we are confident on the growth driven by the innovative portfolio, which is scaling up very meaningfully. Our focus on the growth booster brands that we have been speaking for the last two years now, which is delivering better growth now. Also, we are seeing a very strong traction on our key therapies with the launches and monetization of our portfolio on biosimilars and also the new launches that we have done. And , continuously, we are improving our chronic share consistently over the last few years and that is also aiding to better mix in terms of the business. So, I would say , it's an all -round performance with many things, obviously innovation led also but also focus on brand building on our core brands is helping us succeed.

Understood. And, second, you mentioned about the Saro investment . Could you provide some color on what you think the investment for Saro would be in Fiscal 27 to build out the commercial? And another unrelated question, given the investments that we've made in different areas, you know, CDMO, MedTech, Specialty business now with Assertio, could you provide us some milestones that we need to watch to give us confidence on when we should see this business becoming more meaningful to Zydus as a whole?

So, on Saro, for this year , we'll have an additional 7 0 million kind of investment on the commercialization part on Saro. That is what we have factored in. And with respect to... 11 of 22

Sorry, Sir, I missed that number. What did you say? Apologies, I missed that number.

70.

70. Okay, got it. Okay, thank you.

With respect to Assertio, I mean, we still have to close on the deal but we see it being an accretive deal to the organization. So, that's what we can say now. Post, I think, closure, we can talk about more what it is.

And for the other businesses, Sir?

Sorry?

And, you know, we've done like CDMO, we've done MedTech, there's obviously, Comfort Click. You know, so for these, what do you think would be a good inflection point for us to start seeing meaningful contribution to Zydus' performance? For MedTech, yes, we are seeing Amplitude already contribute but do you think, you know, the scale up in this business in terms of what we have envisaged would take us a couple of years? Or do you think that could be witnessed in FY27-28?

The Medical Devices business is a platform build that we are going through . So, it will take at least 3-4 years before we see a strong momentum. But I think , we would see improvement of cost and profitability as we build more synergies. On the Comfort Click business, it is already a strong growth business and for the last six months post the acquisition it has delivered on its numbers. It is already EPS Accretive in this fourth quarter and going forward also will be EPS Accretive. So, I think , that's on track. It's a steady growing, fast -growing business and is getting integrated well with the organization. On the Agenus, on the acquisition of the manufacturing on Zylidac, again, that's a beginning, I would say . So, we would need the next 2 years to build capabilities. What it gets is obviously immediate supply for the BOT-BAL to Agenus which will continue and we're seeing good traction there. But as we add more partnerships and maybe more products, we would see better utilization of the facility over the next 3 years. But it will take at least next 3 years before we see that facility being well utilized.

And this BOT-BAL contribution isn't very meaningful at the moment, right, Sir? It's just incremental but it's not like a big revenue contributor. That would be a fair assumption?

Yeah, so it's not going to be significant but it's around 10 to 15 million revenue. 12 of 22

Okay, got it. All right. Thank you so much, Sir.

Thank you.

Thank you. The next question is from Harith Ahmed.

Hi, hope I'm audible.

Yes.

My first question is on Saroglitazar. So, we have guided for a 4Q FY26 filing in PBC indication. So, can you give an update on the status of that? And if it's filed, do we have a goal date from the FDA?

So, in a new NDA filing, once the acceptance of the NDA happens, we can give you the goal date. So, I think we will update you once we have acceptance of the NDA.

So, it's filed but we are awaiting the acceptance?

Yeah, we have to await the acceptance of the NDA, which is the more important milestone.

Okay, got it, Sir. You know, Semaglutide in India, can you give us a sense of the rationale for out licensing strategy here to Lupin and Torrent, given we have a very differentiated reusable pen device? What was the thought process behind going along with our own launch, licensing it out to partners? And then, from a realization standpoint, per device, how different is our own sales versus sales through partners?

So, I think we have launched a novel formulation on S EMA. I think it is … obviously, as Zydus alone, we don't cover each and every doctor and specialty. Also, this being a highly competitive product with the multiple launches, we believe that the best strategy would be to launch with more players to create more share of voice and more impact for the new formulation with the customers. I think that strategy has worked very well. I think we are now number 2 in terms of share and closely followed by Lupin , a nd Torrent also has gained strong share. So, I think it's a good choice on partners. Together, we control a very meaningful part of the market share on S emaglutide, which is also very important, and I think it will only grow from strength to strength there. What we have been able to demonstrate is a very reliable supply, very strong product with a highly reliable pen, which has been the challenge in the market. First-to-market was also the big success for us and the companies that launched with us. So, we do see that this strategy of co -partnering has helped in terms of 13 of 22 gaining strong market share and share of voice and we hope this momentum will continue.

Lastly, on Rolv edon, just to clarify, did you mention that the dosing schedule for this product is different versus Pegfilgrastim or is it the same?

I think the… It’s not. T he main thing is it can be administered on the same day, which is one of the benefits versus…

… the next day for Pegfilgrastim. Okay, got it, sir. Thanks for taking my questions.

Thank you. The next question is from Saion Mukherjee.

Yeah, hi, good evening and congratulations on another good quarter. I have a question on R&D expenses, which have ramped up quite rapidly. It appears that almost 700 crore of quarterly run rate you have, which is probably one of the highest in the industry here. Is it all organically driven? Because if I look at the employee expense within R&D, that seemed to have increased at a much more moderate pace. And how should we think about the 700 crores ? Like what are the key investments ? A nd if you can just split it up into generics, biologics, vaccines, and innovation?

Sure, so I think yes, we believe R&D is a very critical part for our future growth and profitability and we have been consistently investing in that. Obviously, we have a little bit of lumpiness during different quarters. As we are guiding for, we are seeing around 8% of FY27 is our current expectation on R&D. The breakup is around… for the last year is around 50% was on generics and value -added generics and the rest 43%... 40% plus was on NCE, biologics, and vaccines. So that has been generally the breakup of R&D. As we move forward, we will probably see a little bit higher uptick on the NC Es and biologics and probably a similar kind of number on, in terms of absolute number on the generic side.

Okay, so the other one is on S EMA. If you can give some colo ur based on your initial experience in India, how large you think it can be for Zydus over the next 2- 3 years? And the device and pen that you have, is there something you would like to do even in other emerging markets with this product or is this largely going to be India specific opportunity?

So, I think a good beginning to the launch in multiple ways. One is , we do combine have one of the strongest market shares in this new device. So, there's been good acceptance to product. We are seeing a better forecast than earlier forecasted for all our partners and both Zydus. So, we are seeing a higher uptick and more confidence, I would say, going forward in terms of growth. So, internally, I think we are well poised to sort of do well in the Indian market with 14 of 22 both how it has gone and what the orders we have for the future to manufacture. We have a plan to make sure that this new formulation is available across different markets. We already have a partnership/registration plan for more than 20 plus markets, which is already ongoing. We are not in the first wave in many of this, but we believe with this differentiation , which will offer a significant cost benefit to the government and the patient s, we would see a good momentum for the differentiated formulation in all of these markets. And we are going ahead with the filing and obviously partnerships in many multiple markets as we speak.

Okay. Any timeline in terms of launches? Is it expected in this year or next year?

Depending on the cycle of approval, we could see some in this year or probably some in early next year.

Okay. And just one last question from my side. If you can guide for your capex number for next year, FY27 ? A nd also , depreciation number is high in the quarter. Is this the number we should bake in on an annual basis going forward?

So, yes, we have had an uptick on our capital investment because of multiple initiatives that were taken on expansion. So, we are thinking , in FY27 , around 1,500 crore capex number. And the quarterly depreciation is around 550 crores.

So Saion, this also includes the licensing fees that we have capitalized on the settlement of Mirabegron, which will be charged up to 2027, September 2027. So, it is a limited period charge -off that we will have. Thereafter, there w on’t be any kind of cost that will be associated with this depreciation.

Understood. Thank you.

Thank you. The next question is from Surya Patra.

Yeah, thanks for the opportunity, sir. And congratulations for the great set of numbers. I'll start with a couple of clarifications that I wanted. First is that, what really led to this kind of sequential growth in the US business, despite Revlimid not being there? Or if it is there, then you can qualify that. And also, what is the kind of like-to-like growth in the US business that we would have seen for the full year, FY26? That is one. And another clarification that if you can give . So, about this $75 million which is still likely to be seen as a kind of amortization , beyond that, there is no royalty charge or anything, right, in case of Mirabegron?

There is a royalty charge. 15 of 22

So, are you quantifying the royalty charge, sir? That is one. And secondly, about the US business, the sequential growth, what we have seen, there is a positive surprise considering no Revlimid sales sequentially. So, what has driven that? And what is the like-to-like growth in the base business of the US for FY26?

Yes, I think, as we had stated in the last quarter also, that we had very little Revlimid contribution. And I think this and I would say there are 2-3 factors. One is definitely, December end, obviously, there is destocking and you will see higher uptick during the Jan, Feb, March quarter. So, there is a small incremental benefit that comes out of that. And also, I think multiple levers of new products, launches, the Specialty portfolio scaling up, there have been many levers to good growth. Also, we have said that our base business continues to do healthy, be healthy and consolidated share. So, all of those things have helped us, including some more share on Mir abegron. So, overall, we are around the 300 plus million base right now.

Okay. Okay. So, that means this is a kind of sustainable base even going ahead, since you are talking about single -digit kind of growth for the next year, despite no Revlimid revenue in the subsequent year?

Yes.

Okay. So, my second question is about the approach towards the biologics or biosimilar or the CDMO. So, it is a comprehensive approach, it looks like, from the initiatives that you have taken, either by creating capability in the biosimilar in the initial stage and building the BLEs also, and simultaneously trying to build kind of a CDMO capability in the biologic space. So, putting all this together, when is this vertical likely to be a kind of meaningful contributor to Zydus? If you can give some sense on that front, then it would be helpful.

So, today, the biologics part of our business is very scaled and meaningful contributor to our India business . It continues to do extremely well , and we see that meaningful , continued scale up . W ith our partnerships and filings that we have done in the EM markets, we would see over the next three years, a meaningful scale up of our out licensing and launch of biosimilars in many of these markets, which will add to the overall non -US growth for the biosimilars business. I think in the US, we have thought it through well, we have been waiting for regulatory framework to change to make it more beneficial to do R&D development. And having seen that happen, I think in a very short period, we've been able to license and co -develop and plan our biologics business in the US. And we would see, I would say on the next three years, important milestone for biologics, but more importantly, by 2029, FY29, FY30, we would see the real scale up on the global biosimilars business. 16 of 22

Okay, next question is about the overall growth. See, in fact, FY26 was obviously a kind of a great year, supported by Mira begron, Revlimid, then inorganic activities also. So for the next year, what would be your kind of capital allocation priorities or the investment priorities ? Whether the momentum on the inorganic growth side, will that continue? The way that we have seen , it was a kind of very heavy inorganic activity year during FY26. So going ahead for FY27, your thought process about it?

So yes, I think, you know, what we have been always talking about is building new capabilities when we look at our capital allocation strategy with new platform capabilities or new portfolio. And if you see many of the inorganic opportunities that we have looked at, we have seen where we can really build up capabilities and platform. So that has been good . A nd going forward also, you know, scaling up our Specialty business, including 5 05(B)(2) would be obviously one of the important areas that w e’d continue to add portfolio to. And I think beyond that, we have a good R&D pipeline of products to come through, which we are betting on and it looks exciting for us. So we are building towards that. So mostly it will be, you know, bolt -on acquisitions that we could look at from the Specialty point of view. Also, potentially, our international business is doing extremely well , as I said, growing at 40 % plus. We are seeing opportunities to also create a strong leg of growth for the international market. So we would continue to look for opportunities there.

Okay, just last one point from myself. See this about this Amplitude, we have possibly acquired something else also that FBC Medical, which is a distributions kind of setup for that business , and it is supposed to add or reduce the cost for the Amplitude. So can you give some more clarity to that? Like, what is the current profitability of Amplitude as per FY26? And with the initiative, what is the kind of margin profile that you are thinking about that operation for next year?

So Amplitude is a profitable business upwards of 20 % plus. The acquisition we did, you know, there are there are agents and distribution distributors that you can acquire. So it's a normal course of business that one does it. And it's not really… I mean, in parlance it's an M&A, but it's more about sales and distribution kind of consolidation that we do. And as I said, this business over the next few years, we will look to improve our profitability and growth.

Sure sir. Thank you. Wish you all the best.

Thank you. Requesting participants to please identify themselves and restrict to two questions only. The next question is from Devang Sarawagi. 17 of 22

Hello. My question is on Saroglitazar. Firstly, on PBC, given the trial data is out in our hands, is company planning to present or publish the PBC clinical trial data at EASL 2026?

Yes.

And secondly, on MASH, according to clinicaltrial.gov, the phase 3 clinical trial was completed in October 2025. Could you please share the expected timeline for publishing or presenting the top line results? Additionally, is company evaluating any out -licensing or co -development opportunity with large pharmaceutical company for Saroglitazar in the US MASH market?

Currently, we have in India, large phase 4 trial with a 52 -week follow -up for fibrosis is continuing with its recruitment. And maybe in the next couple of quarters, we will close on the recruitment. And then as we get data, we will obviously publish the data on that. With respect to US on PBC, the company has decided to launch the product on its own. And so , we are preparing for a commercialization strategy in the US. Post favorable approval in the US, we will look to see how do we co -partner or license for Europe and other countries.

And thirdly, when to expect Desidustat launch in China? What is company revenue expectation from this product from Chinese market?

We will hope to see launch in second quarter of FY27 in China. As we get more information on the commercial launch and readiness with the partner, we can talk about it as we get more information.

And lastly, any progress on specialty acquisition for synergizing Saro launch?

No.

Okay. Thank you.

Thank you. The next question is from Kunal Dhamesha.

Hi, thank you for the opportunity again. Just one on the debt side, we are already at more around 4,500 crore debt, and with the buyback and Assertio acquisition, we would be almost close to around 7 ,000 crore net debt, not consider ing the cash generation in ‘27. So what is our plan from here? Do we de -leverage from here or are we comfortable at this kind of debt level, which would be more like slightly less than one -time net debt to EBITDA? I would like to hear your thoughts. 18 of 22

So, we are comfortable around one -times net debt to EBITDA right now on an ongoing basis, so we don't see that as major concern. We continue to look for bolt-on acquisition opportunities for our specialty 505(B)(2) franchise. So that's what we'll continue to look at. And so, yeah, from that point of view, we are currently comfortable with our current financial metrics.

And this bolt-on would be on the same strategy of orphan, rare disease, right?

Yes.

And lastly, we know on the working capital side, that is also kind of inched up quite a bit from Quarter 1 of FY26 through Quarter 4. So, where do we see that? Do we see working capital coming back to the older levels?

I think on the overall receivables as well, I think we are very healthy and probably amongst the best -in-class when it comes to working capital management in terms of number of days. So I don't see that being a major challenge. We continue to always look at ways of improving our health, both on receivables and on inventory. So we are comfortable where we are. And obviously with acquisitions, you would have additional capital that would have got added. But on the overall health parameters, we are probably amongst the top in terms of health in industry.

Sure. And lastly, on the current geopolitical environment and its impact on the supply chain, what kind of disruption are we witnessing from, let's say, fuel availability to container availability, API prices or raw material prices? And how has that been factored into our FY27 outlook, along with the currency benefit, which I believe would be also a good positive driver. But on the adverse side, the other factor, what are we seeing there and how is it factored into our guidance?

So it's very difficult to predict the next three months and six months. But we are every day , obviously, solving for challenges or opportunities that we see. Obviously, costs do go up on both freight, on times, logistics, as well as on other things, which we have to manage through our better sourcing and better rationalization and cost optimization. But we are sort of taking it as it comes. As we see new challenges, we're trying to respond to them. And I think the teams are quite efficient to make sure that they continue to improve on that. Wherever we see opportunity to improve our margins, we look at that. And that's what we continuously work towards cost efficiencies. But it's very difficult to predict what will happen in the next three to six months. So we are taking it as it comes.

Sure. But at this point, the rupee depreciation, would you say rupee depreciation is enough to cover all the disruption in terms of increased cost line items? 19 of 22

Yeah, we have a good export base. So obviously, rupee depreciation gives us a good cash flow.

Sure. Thank you and all the best.

The next question is from Avneesh Tiwari.

Hi, my first question is regarding your domestic business. We observed that Onco IPM growth is also very strong. In fiscal 26, the volume growth was pretty strong. Fiscal 25 was very muted. And also the pricing growth in both the years is also very strong. Can you just explain what happened in ‘26 versus ‘25 in which this happened? And did you experience the same phenomena in your Onco division as well?

So I think that IPM doesn't truly capture the full business specific to Oncology. Ipsos is probably a better data source to look at. I would say the growth has been there in the Oncology market, which with more government schemes getting implemented, executed and used and as well as, obviously, we have seen a higher incidence of cancers in the last growth on that , so we are seeing a good momentum on that. For Zydus, obviously, we have captured a strong share on our launches, Pertuzumab, Nivolumab, some of the oral Oncology drugs where we were first-to-market. So all of that has led to obviously a very strong patient … you know, we have been able to serve a significant number of patients doing so. And the strong medical support and patient support programs that we are running, we are seeing a very strong traction on the brands, which has led to a better growth. And now we are the largest Indian Oncology player in the market.

Right. The second question I had was the trade generic proposition to your Indian formulation business. How do you see that as either a long-term opportunity or a long-term threat? Like, if you could just explain how are they taking market share within your line of businesses?

I would say it's neutral to us and our own trade generics is a very small part of our business. So it's more of a cash cow.

Okay. But do you see the other trade generic taking away share over time because the government pushes towards that? I don't know how the customer acceptance or any other factors would limit this market share erosion over long term.

So it does always. Yes, it is a channel and we have to look at the channel, how it progresses. And we do look at that. But I think with our innovation pipeline differentiation that we have and a core focus on key brands, I think we can sort of continue to do better than market from our perspective. 20 of 22

Okay. Just to capture on the first point, is the pricing growth also strong in Onco line of business or other chronic line of business compared to overall Indian formulation business you have?

I'm sorry, could you repeat the question?

The pricing growth, the year over year pricing gains you see.

Pricing generally deflates. Prices goes down, not doesn't go up.

Okay, great. Thank you.

It's a faster volume growth than value led growth.

Okay, thank you.

Thank you. Thank you very much to the management team. Ladies and gentlemen, on behalf of Zydus…

I think if there are people in queue, you can still take a few more questions please.

Okay. The next question is from Saion Mukherjee.

Yeah, thanks for the follow up. Two specific questions, Dr. Sh arvil, if you can answer. One is, the bio similar business size today in India primarily , how large is that? If you can share that. And the second one, I was wondering if you can talk about out of the $1.2 billion US revenues, if you add all the Specialty, rare disease plus 505(B)(2), how large is portfolio currently?

So as I said , the Specialty still in early stages, so it's not meaningfully very large. We see that scaling up over the next three years. On the Oncology, it's obviously become a very large integral part of our business. You know, it's crossed 800 plus crores now.

Okay, thank you. That’s it.

The next question is from Harith Ahmed.

Hi, thanks for the opportunity again. So just following up on the previous question on the working capital increase this year. So when I look at the operating cash flows for FY26, there's a sharp decline . It's around 2 ,000 crores. It's a lower number compared to our EBITDA for the year being around 7 ,000 crores. So are there any one -offs? I understand there's a Mirabegron settlement 21 of 22 later to pay out. But anything else that can explain this relatively lower operating cash flow for the year?

So this… I think, obviously, one is a settlement and we had a capex.

The operating cash flow, I think if you really look at it from that perspective, I think whatever the acquisitions that we have done to that extent, whatever the incremental working capital, which has happened, it is also impacting us in terms of operational cash flow. So , the acquisition related working capital changes will have an impact on the operational cash flow.

Okay. And last one with your permission, on international markets, I mean, through the year we've seen very strong growth in FY26. It's around 40 %. So I think you had talked about this in the last call as well, but just trying to get some more color on what exactly is driving this 40 % growth. We hadn't seen such a strong growth historically for the segment. And then, if you can also guide us on what to expect for the segment going forward.

So I think it's actually has been an all -around growth across regions. So it's not a one-off region. So I think we're very happy with how most of the clusters are growing. You know, Europe, which was obviously not doing so well for us a couple of years ago , in the last two years, has also got a good trajectory. I think our new countries that we have launched have scaled up faster than we expected and done meaningfully well for us. And I think all of that is led by the portfolio that they've been able to launch in these markets. So I would say again, a good execution, branded focus, key therapy focus and also aided by a very strong pipeline , has led to this growth, which we believe will continue in the coming years.

Got it, sir. Thank you.

Thank you. The next question is from Nitin Agarwal.

Hi, sir. Thanks for taking my question, sir. On the US, when you look through the next year guidance, should we expect like a pickup more in the second half of the year, or is this going to be a well sort of balanced growth to help lay out numbers through the year.

So obviously, product specific, we would see some traction in the later part of the year, but we would still see … we will not see any major changes in this next two quarters.

And is there any part of the portfolio right now that you've sort of … 320 odd did we get in this quarter, which is probably subject to some faster erosion than the 22 of 22 average in general? Or this is all now a $320 odd million, which is going to just go off… keep growing as a typical generic manner.

So we are around the 300 plus to 310 range. We had, as I said, maybe we'll have Mira competition, which we are factored in. So we will see some erosion from the current base. So that's what we are expecting.

And lastly, you know, if you were to look at the 505 (B)(2)s that you've done for this year, and some of the other Specialty launches, what proportion of the 1,300 million… for the 1.3 billion you've done for the year would be on that portfolio?

So as I said, it's still very small, the Specialty business. So it will probably require at least… this year, we would see some scale up. So from FY28, we would see the scale up on the Specialty business. So we're not calling it out separately, because it's not very large right now.

Okay. Thank you so much.

Thank you. The next question is from Taran Agarwal. I think he dropped out of the call. Shall we close the call, sir?

Yeah, thank you.

Thank you very much. And look forward to interacting with you during the next quarter results. Have a good night.

Ladies and gentlemen, on behalf of Zydus Life Sciences, that concludes today's conference. Thank you for joining us, and you may now disconnect your line and exit the webinar.

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