Ajanta Pharma (NSE:AJANTPHARM) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Ajanta Pharma Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note this conference is being recorded. I now hand the conference over to Mr. Yogesh Agrawal, managing director of Ajanta Pharma Limited. Thank you, and over to you, sir. Thank you. Good afternoon, everyone, and welcome to Ajanta Pharma's earning call. With me, I have mister Rajesh Agrawal, our joint managing director, mister Aravinda Agrawal, our CFO, mister Rajeeva Agrawal, our vice president finance and investor relations. I hope all of you have received the financial results by now.

0:56 I am pleased to announce that the board of directors has approved interim dividend of rupees 32 per share on a face value of rupees 2 per share, amounting to a total dividend payout of about 400 rupees. For the overall business, we have begun the new financial year on a strong note with revenue from operations growing by 25% and profit after tax growing by 31%. We remain focused on delivering our growth momentum of high teens for the whole year. Our financial position has continued to strengthen with return on capital employed at 37% and return on network at 28% as at end of June twenty twenty six.

1:43 These robot... Robust returns reaffirm our position amongst the industry's leading performer. Let me take you through our key business verticals, starting with the branded generic business in Asia and Africa, which contributed 34% to the total revenue. Our continued investment in people, products, and markets are ensuring consistent growth. I begin with Asia. In q one, our Asia branded generic business reported sales of 225 crore compared with $30.04 crore in the corresponding quarter last year, representing a decline of 16 While we had anticipated a recovery during the quarter, continued geopolitical development in The Middle East caused supply chain disruptions and affected the dispatches.

2:34 We are actively working on alternate routes to ensure uninterrupted supplies to the region. We also launched three new products in the region and are confident that the group momentum will be back in coming quarters. Moving to Africa. In q one, our Africa branded jewelry business delivered a strong performance with sales increasing by 30% to 295 crore compared with $2.28 crore in the corresponding quarter last year. During the quarter, we also launched three new products, further supporting our continued expansion across the region. As can be seen, our conscious call to keep the business well diversified across markets enables us to keep performing and delivering growth in spite of challenges.

3:24 Let me now turn to the other two verticals within our international business. US generic business contributed 30% to our total revenue during the quarter, with sales growing by 57% to $4.87 crore compared with 310 crore in the corresponding quarter last year. The strong performance was supported by two product launches during the quarter. However, for the full year, we remain with our guidance of mid single digit growth. Moving to institution business. The Africa institutional business contributed around 4% to the company's total revenue and was in line with our expectation in q one. Sales in current quarter stood at 49 crore compared to 28 crore in the previous year, delivering a healthy growth of 78%.

4:14 Now I invite mister Rajesh Agrawal, our joint managing director, to brief you on India business. Thank you, and over to you. Thank you. Good afternoon to all of you. The new financial year has begun on a strong note for our India business. The investments made over the past two years in expanding our field force and entering new therapeutic areas has started yielding results, contributing to an excellent performance during this quarter. According to IQVIA MAC June 2026 data, Ajanta contributed... Continued to outperform the IPM, growing by 15% compared to market growth of 11%. Our volume growth was 40% higher than the IPM, while growth from the new product launches exceeded the market by 75%.

5:06 This outperformance was broad based across most of the therapeutic segments in which we operate with our growth consistently exceeding the respective segment averages. We remain confident of sustaining this momentum during the rest of the year. Within our covered market, we are placed amongst the top 10 across all our core therapeutic segments. Cardiology contributed 37% of our India branded sales, followed by ophthalmology at 29%, dermatology at 22%, and pain management at 10%. New therapeutic areas accounted for the remaining 2%. In q one, the India business contributed 32% of the company's total revenue.

5:53 Sales grew by a healthy 24% to rupees $50.09 crores compared with rupees $40.09 crores in the corresponding quarter last year. This performance was supported by eight new product launches during the quarter. The India business also includes our trade generic segment, which contributed rupees 48 crores during the quarter compared with rupees 39 crores in the corresponding period last year. With this, I now invite mister Arvind Agarwal, our CFO, to take you through the financial performance. Thank you, and over to you. Thank you, and good afternoon to all. Before we begin, I would like to mention that during this call, we may make certain forward looking statements.

6:45 These statements are based on management's current expectations and are subject to risks and uncertainties that may cause actual results to differ The company does not undertake any obligation to update these statements publicly. I will now take you through the consolidated financial performance for current year q one. Revenue... Total revenue for the quarter grew by healthy 25% to rupees 1,626 crores compared with 1,303 crores in the corresponding quarter last year. This is an affirmation of our diversified business model supporting consistent growth even in the face of challenges in part of the territory.

7:33 Gross margin stood at 80% for the quarter, improving by approximately 100 basis points over q four year five two zero two six, primarily due to healthy margins from all geographies. For the full year, we expect gross margins to remain around 78% with a variation of plus or minus 100 basis points. Personnel cost. Personnel cost stood at rupees 381 crore compared to rupee 303 crore in the corresponding quarter last year, representing an increase of 26%. This increase was mainly attributable to annual increment during the quarter and addition during... Done in the previous year. The r and d spend expenditure, which is included within personnel cost and other expenses, stood at rupees 66 crores compared with 56 crores in the corresponding quarter last year.

8:28 This represented approximately 4% of total revenue. For the full year, we expect r and d expenditure to be around 5% of revenue. Other expenses other expenses stood at rupees $4.93 crores compared with rupees 373 crores in the corresponding quarter last year, representing an increase of 32%. However, the growth in expenses is just 11% for the sequential quarter of q four year five two zero two six. The increase in expenses also reflects our continued strategic investment in products, brands, and people across the branded generic portfolio. We expect other expenses to remain broadly aligned with the current trend.

9:15 Coming to EBITDA. Adjusted EBITDA, excluding the foreign exchange loss, for the quarter grew by 21% to rupees 454 crore compared with rupees 371 crore in the corresponding quarter last year, with margin standing at 28%. During the quarter, we recorded a foreign exchange loss of rupees 31 crore under other expenses and a foreign exchange gain of rupees 50 crores under other income. We remain confident of maintaining an EBITDA margin of around 27% with a variation of plus or minus 100 basis points while continuing to invest in the development of our market. Profit after tax grew by 31% to rupees 334 crore compared with rupees 255 crore in the corresponding quarter last year.

10:11 The effective tax rate for the quarter stood at 25% and is expected to be around 26% for the full year. Capital expenditure during the quarter stood at rupees 83 crore. For the FY two zero two seven, we expect capital expenditure to be around rupees 400 crores. With this, we now open the floor for question and answer. Thank you. Thank you, sir. We will now begin the question and answer session. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

11:08 The first question comes from the line of with Motilal Oswal Financial Services. Please go ahead. Thanks for the opportunity and congratulations on good set of numbers. So just on India business, some sort of misalignment or disconnect between the IQVIA growth rate and the reported growth rate, which generally has sort of aligned. So is there anything specific for this quarter, if you could highlight? Basically, the the growth rates which you are seeing are for this, you know, three months if you really see because it is a max number which comes mainly IPR. But if you take the, you know, market three months and APL three months, I think we are at about 18% in India.

12:00 Right. But we are we are growing 24% for the quarter. Yes. Yeah. So that's why difference will always be there between the IP and printer number. But, otherwise, absolutely in line. Earlier, it is something which is little far. If you see the math, it is just 15%. Whereas the... For the quarter, if you see, it is 18%. Okay. So secondly, for branded Africa business, the growth rate has been very strong even in this quarter, and we've sort of just touching 300 crores, the the branded business. So what's the outlook for this segment now in terms of growth from thereon? The outlook is quite positive.

12:47 We've got a good momentum. Last year also, we did deliver... Delivered a very healthy growth. And currently, also, we had already guided to to be a high double digit growth, and the year has started really well for us. We're expecting the momentum to continue for the rest of the year. I think we should post a very healthy growth in Africa for the for the whole year. And similarly for Asia, are we now sort of given this uneven situation? So how to think about the, let's say, either the sales and rate of growth in the Asia business? No. Asia, unfortunately, the current... Again, the disruption which has happened because of the geopolitical issues, we started again.

13:35 Otherwise, we were expecting the... You know, to resume normalizing the sales in q one. Unfortunately, that got pushed out. But we are still continuing with our guidance of high high teens growth for the Asia for the full year. So we are expecting the q two, q three, q four, the performance to be much better, and we should be able to catch up of the growth what we posted in the q one. And we should be able to deliver mid teens to IT's growth for the whole year. Got it, sir. Because, like, let's say, in third... Second, third, fourth quarter of FY twenty six, right, the the the sales were almost three in the ten to nineteen to seventy four.

14:23 And currently, we are at the 100 of two fifty five. So you expect the scale up because if we speak about mid €10 which means you're talking about plus minus $3.50 crore per quarter run rate from 255 where we are in one year for '27. And given the supplies disruption that continues, so which is why I'm just trying to kind of think through that. We'll able to scale up, like, €100 additional per quarter and then sustain that in the Yeah. Yeah, just to... Sorry to interrupt. But for the third q one also, we could have posted the... This delivery got delayed, assuming in the market. So we've got... The sales will be captured in the q two now. Some of the sales which should have reflected in q one were pushed out to the q two.

15:10 So that much carry forward we will see in the q two. And you rightly said, I think for the rest of the year, other quarters, we are expecting to be the good good good growth. Overall, there is no constraint on the demand side or ability to generate the business of prescriptions. It is just the geopolitical issues which are impacting our supply chain and logistics resulting into the situation. So once that is, you know, coming online from the q two onwards, we are optimistic that we should be able to deliver the mid teens growth. And just lastly on semaglutide, like, at least as far as India market is concerned, at the industry level, it still seems to be gradual compared to the anticipation we had before launching the product.

16:01 So your view as far as India market is concerned and subsequently, does that strategically change as far as Asia, Africa market is concerned? India market, you're absolutely right. The market has plateaued. If I look at the June IQVIA data as well as the May IQVIA data, there is no significant growth. And on a max basis, on a ARR max basis, if you look at it, it could be around, let's say, it's in the market 12 from now. But the growth rates seem to be yielding compared to the expectations that the entire industry had. But nevertheless, it's still a large enough market, and there can be market share gain that can happen amongst the brands.

16:57 For the Asia and Africa, it is too early to call out anything on this. The launches are two years further away. So I think right now, it is too early to comment on how the market will pan out, what will the situation there two years on. But considering the huge equity which we have in the space, particularly the cardio diabetes space and the specialist, we believe that we should be able to generate good good business with this. Overall, we are optimistic, but it's too early to comment on what will happen after two years or three years. Got it, sir. Thanks a lot for addressing the questions. Thank you. The next question comes from the line of Rashmi Shetty with Dollar Capital. Please go ahead.

17:46 Yes. Thanks for the opportunity. So follow-up from the earlier participant. You mentioned related to the Asia business that the sales will be carried forward in the second quarter. So should we expect that the Asia sales will be higher in second quarter? It will be catching up the quarter one and quarter two both sales? It will be elevated. As I have said, that q one, some of the sales got pushed out. So it will be captured into the q two. So, yes, we should... We we are optimistic that we should be able to post a good quarter two for the issue. Okay. And, again, on India market, you know, such strong growth of 24%. You know, which therapies or which which product, you know, where we are gaining a very big traction?

18:35 Is it across or it is related to certain therapies? Is it, you know, price driven mainly or, you know, you have taken higher price hikes or it's more volume driven? If you can give us just a broad picture and then if you can give a guidance for the full year only for the India business? I mean, there are multiple. The growth that we have recorded internally is across all therapeutics as I want to... Already shared in my opening comments. So for example, of the we are growing at 1.5 times. Market growth rate, dermatology also growing far, far faster, including pain, grinding, everywhere else.

19:20 Cardio also, internal growth rates are equal or better compared to the covered market of cardiology. Secondly, the growth components are also fairly well split between all three components, which is the volume. We are growing faster. Market growth of volume is 3.4% to 11% growth max, whereas we are at 44.7%, and also new product launches and price. All price is almost the same as the IPM growth rate. So so volume and new launches are what is driving our growth. Third part was the, you know, the... For the remaining part of the year, our guidance remains mid teens, which is what we have guided the start of the year.

20:14 So so it's too early to really be able to change that guidance. So for full year, you're expecting a mid teens growth, basically, for India business? Yes. Correct. On the Africa branded market, you know, if you can let us know, like, how the pharma industry in Africa is performing, you know, what kind of growth rates it is talking, And how is the way Ajanta is performing versus the overall pharma market? No. Overall, the market is growing. The growth keep fluctuating between 7%, 12% year over year.

20:59 And as you see from our numbers, which we have posted last year and for the quarter also, our growth are much far better than the... What the market is growing there. So overall, it's a sizable market, sizable business which we have built. And this is a result of a huge sizable field force, which we have built over over years and years and got a good liquid with the with the entire medical fraternity there. So combination of lot of things, as you would have known that last two, three years, there have been a big ramp up in the field size. That time also we had given the outlook that the growth will play out in next few years, and that is what we are seeing now. So it's a combination of new product launches, the people which we added in last two, three years. They have now just started becoming productive.

21:48 So it's a combination of multiple things. And, of course, we are growing faster than the market. So Okay. And what is the kind of growth that we're looking for the full year? High double digit is what we have guided. Okay. And one last question related to the US business. You know, how many launches are we planning for this quarter? In the quarter... This quarter, there are no launches. Last quarter, the q one, which we're talking about, there we had launched two products. And now most of the products launches will come in the q four. So total, we are expecting how many launches for this year?

22:38 I wish I could have given you the answer. It depends on the FDA approval. Okay. Okay. Got it. Got it. As linked Yeah. FDA approval. But what we are... Way previous situation is have... Is stacked up in the month... In the... With FDA, we believe that the more launches should happen in the q four, hoping that we'll get the approvals by that time, we'll manufacture and supply the products, and we'll be able to get into the market in the q Understood. One, just last clarification related to the EBITDA margin guidance of 27%, plus or minus 1%. So that 27% is basically considering the forex loss item, which is which is... Which generally fits in the other expenses, or it is excluding the forex loss?

23:24 It is excluding the forex loss because forex loss is something which is very uncertain. As you must have seen in this quarter also, there is a gain actually of 20 crores. But, you know, the gain goes into other income and the cost comes into other expenses. So that's why that anomaly is there. So we always give the guidance without the ForEx loss. Okay. Okay. Thank you, sir. That's it from my side. Thank you. Thank you. Our next question comes from the line of Pankaj Triviral with Akigai Asset Managers. Congratulations on a great set of results. Couple of questions. One, when I look at The U. S. Market, that's the very big positive divergence we have seen over the last three, four quarters.

24:20 I remember at the start in FY 'twenty six, you guided for mid- to high teens, but you ended up at 49% growth. Again, this quarter has started with 57%. How should we read for this year on The US industry side, assuming that the first quarter has been a blockbuster there? Yeah. So as I read out in my opening comments, the first quarter has been quite healthy and quite elevated. But going forward for the rest of the year, our guidance still remains the same of mid single digit. So upper mid... Slightly above the mid single digit. The... We are expecting that there is some competition will come in, and there could be some price erosion and some loss in the market share, which we have factored in for the next quarters... Coming quarters.

25:10 That means that the, you know, the next three quarters, the run rate would be a decline also. I'm sorry to interrupt. Mister Abhishek, could you please repeat your question? Your voice was not clear. Oh, this is Pankaj. Yeah. Yeah. Yeah. I mean, if you can do the math, whichever way it stacks up, that's our outlook. We are still believing that we should be landing in the range of mid single digit to upper mid mid single digit kind of situation. Okay. Yeah. Okay. Yeah. No problem. And when I look at the last three years CAGR is about 14, Can I take a medium Sorry? Can you speak louder? We are not able to hear you. Yeah. Can you can you hear me now?

25:59 No. No. No. It is better. Yeah. Go ahead. Can you hear me now? When I look at the last three years, the CAGR has been about 14% on both top line as well as bottom line. And I believe that a large part of investment on Salesforce and feet on ground has been done. When you look at slightly from a medium term perspective, can you talk about the engines of growth? Where do you think the business would accelerate growth from where we were in last three years? Any thoughts on that from a overall outlook on the business? You see my investor presentation, we give our Yes. I do. Yeah. Outlook. So, yeah, basically, we are very focused on those aspects which we have clearly spelled out.

26:47 There is a huge thrust on filing the new products and getting the approvals, whether it is India, emerging markets, or US. New product always contributes 2% to 3% of the growth which will come. Mhmm. So we have a very, very healthy product pipeline under registration, under approval, under development also. Very good. So very, very good situation we are in. Next is the... All these challenges, the the... Our aspiration has been to increase the market share in the products which we already operate in. The large brands which become hundreds of crores, they're increasing the market share becomes slightly challenging because then we we have dominant player already. So, basically, then the newer brands, newer products which we launch in, we see the accelerated or higher growth in that.

27:32 But, cumulatively, it adds up into a good good head of growth. We're also looking at... I think going forward, we are looking to enter into some new markets as well, which is maybe in Asia, Middle East, and Latin America. So these are the three geographies which will play out in three to five years because we are at a drawing board where we are doing a product selection, filing, and it all plays out in three to five years. But there'll be new new geographies also which will get added. So, basically, these are the three engines, and every year, we see where are the possibilities to add more feet on the ground by adding more headcounts either in the existing Mhmm. Divisions or by forming the new divisions.

28:18 So that also is one component with ads up. It takes little time for the new people to be productive. But in second and third year, then they start to add up into the group. So, basically, all this whole growth doers, we believe that we are on top of these things. And all going well, we should be able to continue, you know, doing... Executing well in all these parameters. But, again, having said that, it has to be supported with the tailwinds of the market growth also. So if the markets are not growing or there are challenges like what we have seen in the Asia geopolitical issues, then they are out of our control that we get impacted as the whole industry gets impacted. Sure. Sure. Yeah. That's been the only, you know, negative divergence from your commentary over the last four, five quarters Asia, where we were expecting mid to high D and D growth, and actually, it's come down quite substantially. So second quarter onwards, we have been guiding that. That should pick up also.

29:16 Correct. That's right. That's right, Pankaj. Yeah. Thank you. Thank you, and wish you all the best, and very happy with the performance which you guys have been delivering for the last few quarters. Thank Thank you. The next question comes from the line of Vinu Pattipanambar with Telara Capital. Please go ahead. Hi. Good afternoon to all of you, and congrats on a great set of numbers. Most questions answered. Just one follow-up. Arun ji, the impact of higher freight cost on materials, etcetera, is that all reflected in the margins and expenses this quarter? Or do we expect to see something more incremental in Q2?

30:05 In terms of expenses, I think the run rate should remain in the, you know, range which is there currently. So I don't expect a bigger increase in the run rate. But, look, I think as and this has been pointed out that the, you know, The US business may see some price erosion, etcetera, because of which there can be some impact. But, otherwise, our guidance of 27% for the whole year stands. Understood. Yes. Thank you. Thank you. The next question comes from the line of Kavya Shah with Plus ninety one. Please go ahead. Congratulations on this quarter giving good set of numbers.

30:53 Actually, have joined late, so I have missed few points. So why was there a growth of 57% in US generic market? So it is the momentum which we are getting forward from the last year. If you see our previous quarters also for The US, they have been in the in the similar range. So does the momentum carry forward from the last quarters, which we were expecting to continue? But as we... I think you missed that point that we believe that this growth should normalize, and it should become normal. So for the full year, our guidance has been the mid to high mid single digit growth.

31:41 Okay. Can you give CapEx CapEx guidance for that? Yes. For the quarter, we have spent about 83 crores on the CapEx. And for the full year, we are planning to spend about 400 crores. Okay, sir. Thank you. Yeah. Thank you. Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question comes from the line of with Bank of Aurora. Please go ahead. Thank you for the opportunity, and congratulations on the good set of numbers. My first question is on the Asia business.

32:29 So we mentioned that from next quarter, the performance will get elevated as some of the business got pushed to q two. So can we quantify the amount of business, you know, that got pushed and therefore will see some incremental growth? I wish I could. Think let's wait for the q two. I have as much in whatever way I can tell. I have expressed quality that there will be a better q two. That's that's all. That is as much as I can say. Okay. We'll have certain... Or do we have visibility of, you know, the shipment going on and therefore the numbers coming in from q two?

33:19 Reasonably confident. Things got little pushed out last minute. So the supplies have been made. We have to realize the sales because once the sales are realized, once the stock reaches this destination. So fair bit of visibility is there on that front. Okay. My second question is on the Africa branded business. So I see that h two of FY '26, we started performing better with some 30% growth, which we have retained in this q one also, and we have guided for higher double digit growth for FY '27. So just a clarification, would we not see a high base effect in h two of twenty seven, or we shall maintain the same run rate?

34:11 Because high double digits is quite a broad, you know, guidance. Therefore I think you can consider the run rate to be, you know, there, plus minus, of course. But I think high double digit very clearly says that that 30% which is there this quarter is little higher. But over a period of time, we should be able to continue to grow. Only the thing is it will be maybe a little lower than the one which we are seeing. So because of that, I think that the high double digit growth is something that's very, very much achievable. Sure. And my third question, if I may just squeeze in, is on the US side.

34:57 Could you give us a guidance on the number of filings that we are expecting in FY twenty seven? In the current year, we are expecting five to seven filings. Okay. So the follow-up question is that last year, we did see a good growth in The US segment. And this year, we are talking about normalizing to mid single digit. So how should we look at it, you know, next year given that we will have full year impact of, you know, the launches that we will... We made in this quarter as well as q four? Normally, we give out the the guidance of the current year only.

35:44 I think next year is uncertain because how many uploads we will get, what kind of product launches will happen, what kind of market share we will have. So we are unable to give you the guidance for the next year. I think we'll probably deal with it in in the q four when... Once we reach there. Okay. But, sir, can we give us... Or give... Can you give us a mix or, like, of, you know, new product launches and existing business for The US? Like, just a broad mix. For the current year, you're saying, or the next year? Yes. Yes. For the current year. Since we had couple of new launches last year as well as in q two We already have two launches in the... This quarter. And I think q three... Q two, q three, we are not expecting any launches.

36:33 We're expecting some more launches subject to the... Getting the approval from the FDA in the q four. So I'm just asking for a mix breakup. How much comes from the existing and how much from the new launches of The US business? Right now right now, most of the business is from the existing products only. Two new products have just been launched. They are yet to have a meaningful contribution in the overall sales. So it is still the momentum is carrying forward from the last year. Got it. Thank you. Thanks for the opportunity. Yeah. Yeah. Thank you. The next question comes from the line of Ankit Shah. Please go ahead. Yes. Hi. Thanks for the opportunity, and congratulations on another great quarter.

37:22 My first question relates to the gross margin guidance. Now currently, we are doing around 80% margins and our guidance is still 100 to 200 bps below that. So are we expecting any cost headwinds, any input cost inflation due to which margins are expected to go lower in the coming quarters? Not really. I think it will be basically The US business where we are expecting some price erosion, where we are expecting the, you know, growth to taper down. So I think that will impact the material cost also. Okay. Okay. So mix would be one of the factors, and some price erosion is what will try to Yeah. Possibly decline gross margin.

38:08 Absolutely. Absolutely. Okay. Got it. My second question for things from the employee cost. So if I look at the last three quarters, our MR count has been in the similar range around 6,000, but our cost have increased substantially. So is a major part of this... It is due to increments and... Or it doesn't... Anything else which is driving that increase in employee cost? If you see the number of q four and q one, I think we are talking about an increase of just about 12%, which is part of the increment and some small number of people who have been added in the quarter. So, you know, from... You are talking about four zero one. Three forty. Three forty.

38:54 Three forty. Three forty one to now three eighty one. So, practically, I think it is just about 12%. And out of that 12% again... And also we have added 50 people during the quarter in the international MR. So that's the transition will be there. Oh, okay. Okay. Got it. And lastly, just a quick... Keeping question. Can you share the operating cash flow in q one? Have not supposed to wait. Have right now. Yeah. Oh, okay. No problem. I'll take it offline now. Thank you. Thank you so much. Thank you. Thank you.

39:41 The next question comes from the line of Anupam Agarwal with Lucky Investments. Please go ahead. Thank you for taking my question and congratulations on great numbers, sir. My question is on The US business again. So I just continuing to be earlier participant. If you can slice out the 57% Y o Y growth between volume growth and the the growth that has come from product launch in the last twelve months? We do not give out such granular details. I've already shared most of the... What is from the existing products. We'll not be able to provide you that with.

40:31 Understood. Secondly, sir, any any thoughts on the US administration with respect to the generic price tariff that just came out maybe two weeks back? Any thoughts on that? How how the market is speaking? How the market participants? Your your customers are receiving that kind of news? No. We are carefully evaluating all the developments which are there, which are happening in The US. But right now, it is a post which is made by the US president. But the study, which was already done of section 32 policy, which continues to exempt the generic from any tariffs till April 2027. Now I was going to do a new study, and president Trump has said two years, which is August 28, which is six months before his term ends.

41:26 So there is lot of uncertainty, but we are keeping our very close years to the ground to keep the eye on what are the developments and how they're going to impact and what kind of measures we will be able... We we need to take. So two years is a little far away. We will see when when we get closer to the timelines of this two year, August 28 timeline, which which the president has announced. Just lastly on The US again, on a basket portfolio level, what is the average market share you would have for majority of your products? We have... For most of our product, we have a dominating market share. Of, let's say, 20, 25% or still below the basis?

42:13 Yeah. Yeah. Yeah. 20% and above also. Understood. If I may, sir, 400 gross CapEx is for which location... Job of club visit, location... Is it just routine maintenance? Yeah. It is one... About 100 crore will be maintenance CapEx, and another 300 crore, we are expanding in our Pitampur plant. So there, that expansion is going on. So there, it will be. Is. Emerging market. Understood. Thank you. That's all from my side and wish you all the best for the remaining. Thank you. The next question comes from the line of Abdulgadir Gurnawala with ICIC Securities.

42:59 Please go ahead. Yes. Hi, sir. Thank you for the opportunity. So my first question is with regards to your gross margins. And we highlighted geopolitical issues hampering growth in Asia. But at a raw mat level, how are things shaping up? And what was the impact if at all in this particular quarter on your overall cost? Yeah. I didn't get your question. Get your question, please. Can it clear... Clearly spell out what you are asking? Yeah. So my question was pertaining to the raw material cost inflation because of geopolitical issues, whether you have witnessed that in quarter one.

43:45 I understand you had a gross margin improvement, but within the segments, you know, would want to know if there is any cost inflation because of the product collections? There are definitely discussions around the cost increase in the raw material prices. But as you know, we hold the inventory. So in the q one, there was no practical, no impact. But, yes, it may start impacting from q two onwards. Okay. And and, sir, for the Asia business, you know, when we are guiding for a recovery to start from q two, and, you know, when we understand the situation right now, it's not improved much. So, you know, what is giving us this confidence is that from q two onwards, you know, there would be a recovery in terms of growth for the Asia business?

44:39 No. There are some visibility which we have on the supply chain, how we are able to sort out and streamline those supply chain. And on anticipation of that, there is no concern on the demand side. It is if we're able... Once we are able to reach the stocks to the markets, we have the demand. We are able to get those demand generated. The puzzle which we are solving is the logistics supply chain, which we have... We believe that we've been we've been able to sort it out. So with that, that's getting streamlined. We should be able to get the stocks into the market, and then that should continue. Understood, sir. And also one final one, if I may, on the African institution. So I understand that business is pretty volatile and and, you know, this quarter, I think specifically has trended as well.

45:32 But anything if you can comment on, you know, how the full year number would look like? For the whole year, we've already given the guidance for the application to be the high double digit. At the beginning of the year only, we have given. So we expect the rest of the year also to be to be doing pretty well. Okay. Yes, sir. This is for the institution business. Yeah. Yeah. For the institution business. Okay. Got it, sir. Thank you. Bye. Bye. Thank you. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and 1. The next question comes from the line of Yogesh Soni with Haitong. My first question is on the India business.

46:33 Since cardiology is our biggest segment in the India business and given that we have been underperforming compared to the IPM, I would like to understand, I mean, what is our action plan in terms of getting back to performing in line with the IPM growth, specifically during time when cardiology and IPM is doing significant growth. So I would like to understand your plans on that, sir. Our internal growth rate is matching with the covered market as well as the IPM cardiac segment growth rate. Not only is it matching, but we are also surpassing the growth rate of the cardiac segment.

47:18 It is... The only issue is that the IQVIA capturing of our cardiovascular segment growth rate has not been has not been most accurate. And this has been already shared for the past three quarters. We have been engaging with IQVIA team and getting them to align, have the stock is covered, which which actually have major sales of ours and all that. So that engagement and that exercise is going, and you've been seeing the improvement taking place already in the last quarter. So, hopefully, that should happen. So as I've expressed and shared, internally, our growth rates are equal or better. So we don't need to see... We don't need to really worry on the execution, any aspect of that.

48:08 Okay. Okay. Understood, sir. And for one clarificatory question, if I look at the PCTM for the India MRs, the number seems to be in the range of INR 8.5 to INR 4 lakh. Now I appreciate the fact that you have been consistently adding MRs for the last two years and you have still managed to grow this number. But if I compare this with your peers, the number seems to be upwards of five lakhs. So how should one read this the difference between yours and peers PCPM? So which peer are you comparing this number? So if I compare it with the... Whether it is or doctor Reddy's. So it's not really comparable because the segments in which we operate are not necessarily the same. For example, you know, doctor Reddy's may not be operating in ophthalmology.

49:07 Right? And Torrent may not be operating in ophthalmology, whereas Optal contributes significant... Significantly to my domestic business. So, therefore, the PCPMs may not be directly comparable. Having said that, two points here. First is that my q one PCPM per capita per man is already 4.5 lakhs. Second is if you look at... You'll have to dissect this segment wise and how mature the teams are. Like, you correctly pointed out, I have been adding, you know, great number of medical representatives over the last one year. Right? So if you look at my productivity in ophthalmology compared with some of the top companies in ophthalmology, we are at par or better because those are mature segments, mature teams.

49:57 However, our productivity in gynecology or in nephrology will be far less compared to the industry averages because we have just started in this segment not more than eighteen months back. So at a blended level, it may not be comparable. You will have to go deeper into every segment and then look at the productivity of our company, our segment, PCPM versus the competitors. Understood. Understood, sir. Thank you. Thank you for your clarification. That's it from my side. Thank you. Participants who wish to ask a question may press star and one. Ladies and gentlemen, if you wish to ask a question, you may press star and 1.

50:55 Thank you. As there are no further questions from the participants, I would now like to hand the conference over to mister Yugesh for closing comments. Thank you, everyone, for joining us today. In case you have any further questions that remain unanswered today, please feel free to reach out to our investor relations team. Thank you. Thank you. On behalf of Ajanta Pharma, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.