Lupin (NSE:LUPIN) Q1 2027 Earnings Call

0:00 Good evening, and welcome. Hello. Good evening, and welcome to LUPIN Limited q one FY twenty seven earnings conference call. Thank you for your participation in the call today. Please note that all participants' line will be in listen only mode, and there will be an opportunity for you to ask questions after the opening remarks. Please also note that this conference is being recorded. I now hand over the conference to the management. Thank you, and over to you, ma'am. Good afternoon, friends. I'm very pleased to welcome you to our q one fiscal year twenty seven earnings call. I have with me our MD, Nilesh, and our CFO, Ramesh, and our head of investor relations, Ravi. We look forward to sharing with you our highlights for the quarter as well as the outlook for fiscal year twenty seven.

0:49 We are delighted to announce a record quarter with total revenues from operations and EBITDA exceeding 8,000 crores and 2,400 crores respectively for the first time in our history. This quarter also marks a record sixteenth consecutive quarter of year over year growth for the company. While The US has obviously had an exceptional contribution to this performance, I would like to highlight that the ex US organic revenue growth for the company has been a strong 20% plus year over year and a strong double digit growth in all our key markets, including India, other developed markets, and other emerging markets.

1:35 This geographically diversified business model combined with our unwavering focus on operational excellence creates a sustainable foundation for future growth even as we navigate the increased competition in some of our key generic products in The US this year. Turning to individual business segments. Our US business sustained its positive momentum and delivered another quarter of robust sales performance. While we benefited from the higher volumes in base portfolio and growth in products like Tolvaptan. This was offset by increased competition in products like mirabegron. For the full year, we expect The US business to be in the one point one to one point two billion dollar range, aided by growth in base business, our injectable launches, and contribution from pegfilgrastim offsetting the additional competition in products like mirabegron and tolvaptan during the year.

2:37 Going ahead, we remain focused on doubling the share of our complex products in our US business, led by respiratory and complex injectables and augmented by biosimilars. In the next three years, we expect to launch 50 plus products in The US with 10 exclusive first to files, five biosimilars, as well as two to three five zero five b twos. We are planning to file more than 15 products this year, including at least seven in the respiratory segment. We believe that all these initiatives should help in The US getting back to its growth trajectory from fiscal year twenty eight onwards. Coming to India, our India business has grown 13.9% year over year in the quarter with the core prescription business growing 15.1%, representing a 1.1 times growth against IPM.

3:35 Volume growth was strong at 6.1% during the quarter. The chronic segment accounts for around 67% of our portfolio, up from around 65% in fiscal year twenty six, and we have set ourselves a target to increase the share to 70% in the next five years. Most of our key therapy areas outperform their respective market growth with antidiabetes segment and cardiac segment growing 1.8 times and 1.2 times the category growth. I would specifically like to mention our diabetes segment, which grew at 31.8% year over year, a second consecutive quarter of 20% plus growth led by market leadership in human insulin and successful launch of semaglutide injection.

4:28 This segment is poised for continued healthy growth with the expected launch of vial and oral dosage forms of semaglutide in the second half of this fiscal year. We remain confident that our India formulations business will continue to outperform IPM by 1.2 to 1.3 times, supported by a strong India Prescription Sales Force of nearly 11,300 people and pipeline of more than 80 new product launches over the coming years. We have set ourselves a target of novel proprietary products contributing one third of our India revenues in the ten ten year time frame.

5:15 This innovative portfolio for India will come from in house development as well as in licensed products, leveraging our strong partnership track record, brand building, and development, regulatory, and clinical capabilities. Our other developed markets, Europe, Canada, and Australia, accounted for 14% of our revenues in this quarter, up from 11 in fiscal year twenty six. Sales grew 48% year over year in the quarter. Our European business continued a strong momentum with 83% growth year over year. We believe that we are under indexed in Europe and have set a clear pathway to grow this business with a complex genetics, biosimilars portfolio, as well as specialty acquisitions such as Visu Pharma.

6:09 Emerging markets delivered an impressive 52% year over year growth led by Brazil, South Africa, and Philippines. Brazil continued the strong momentum of the last four quarters, growing 117% year over year in local currency during q one, driven by successful commercialization of dapagliflozin and launch of empagliflozin. As mentioned earlier, we are starting to establish a presence in the diabetes metabolic space in the emerging markets with DAPA serving as a strong start and the launch of Empine Brazil in South Africa as well as semaglutide in South Africa later this year. Turning to r and d, our spend was 7.4% of sales this quarter with continued focus on complex and specialty platforms.

7:05 We have all 50 active products in the pipeline with near term emphasis on respiratory, complex injectables, and biosimilars. We've also evolved a strong five zero five b two pipeline in the last couple of years, and we'll start seeing product launches, this fiscal year and ramping up in the next next two years. We're also strengthening our India innovation portfolio through both in house development and in licensing of late stage assets, as I mentioned earlier. Switching to compliance, we received EIRs for Ankleshwar and Somerset with VAI status from US FDA for both sites during the quarter. With regards to Pitampo Unit 2 facility, we have submitted our responses and remain on track with our remediation efforts.

7:59 We are fully committed to maintaining the highest standards of quality and compliance across all our sites globally. In conclusion, while we have started the year on a strong note, as indicated earlier, we anticipate some moderation in performance during the remainder of the year, especially in The US from increased competitive intensity on our two major products. So we are all... We are closing... Closely monitoring the potential headwinds from an uncertain geopolitical environment as well. We would like to reiterate our earlier guidance of high single digit revenue growth for the organization with EBITDA margins of around 25% during the year. Before I hand it over to Ramesh, I would like to say that we are optimistic on our future growth trajectory.

8:49 We are on the path to strengthen our diversified business model while we continue to evolve our business into higher barrier generics branded, as well as innovative products. Ramesh, over to you. Thank you, Vinita. And friends, I welcome you all to our q one f I twenty seven earnings call. I'm happy to report another record quarter of earnings with total revenue from operations growing 32% year on year to rupees 8,277 crores and EBITDA excluding forex and other income growing at strong 50% year on year to rupees 2,464 crores. This marks the sixteenth consecutive quarter of growth for the company. What is heartening is that the growth has been diversified and robust across our major geographies, be it The US, which grew by 43% year on year, India prescriptions, which grew 15.1% year on year, other developed markets, which grew 48%, Emerging Markets grew 52% year on year, and our GAP business, which grew 40% year on year during the quarter.

9:53 As Vinita mentioned, our organic growth ex US was from 20% year on year during the quarter bearing testimony to the resilience of our business model. During the quarter, The US business recorded sales of US$366,000,000, 3030% higher than year on year in constant currency terms. This growth has been driven by higher volumes in base business, offset by additional competition in key products like mirabegron. Whilst we continue to benefit from our differentiated strategy on focusing on complex products, as indicated in our earlier interactions, the overall sales in The US be impacted by competition in key products like mirabegron and tolvaptan this year. However, we anticipate the business to revert to its growth trajectory from f I twenty eight largely led by a rich pipeline of products including exclusive first two files, biosimilars, and five zero five b two products.

10:51 In addition, we have an attractive pipeline of more than 60 products in injectables and a respiratory products currently under development, which will augment our complex portfolio going ahead. India region. During the quarter, the India business recorded sales of 2,380 crores, growing 13.9% year on year. I would like to highlight that the co prescription business grew 15.1% year on year as against IPM growth of 13.5%, translating to 1.1 x times IPM growth. This is offset by lower tender sales in our JV business in India. Key segments like diabetes and cardiology handsomely outperformed their category growth at 1.8 x and 1.2 x times respectively.

11:36 This is offset by lower growth in respiratory segment, which was 6.9% as against category growth of 11.3%. Volume growth has been a healthy 6.1% during the year, and the chronic share in the mix has increased to 57... To around 67% from around 65% in f I twenty six. The share of in licensed products in this quarter is around 6% similar to the f y twenty six levels. We have launched around seven products in q I... Q one f y twenty seven and plot... And plan to launch about 20 products in f y twenty seven. We service 15 products which we have launched in f y twenty six. We remain confident that our India formulations business will continue to outperform IPM by 1.2 to 1.3 times, supporting... Supported by a strong sales force of more than 11,000 people and pipeline of more than 80 new product launches over the coming years, including innovation in house and in licensed products.

12:37 Other developed markets. For the quarter, other developed markets, Europe, Canada, and Australia, recorded sales of rupees $1,001.49 crores, growing 48% year on year and accounting for 14% of our total sales, an increase of... From 11% in f I twenty six. I would like to highlight that we have begun consolidating the Zufarma in our financials from this quarter. As Vinita mentioned, we are focusing on various strategic initiatives to grow our business in this region, especially in Europe going ahead. Emerging Markets. For the quarter, Emerging Markets recorded sales of 990 crores, delivering an impressive 52% year on year growth led by markets in Brazil, South Africa, and Philippines.

13:23 Brazil, in particular, maintained strong momentum post the turnaround of the last few quarters, growing 117% year on year in local currency, driven by successful commercialization of the. Going on to the p and o. The other operating income at rupees 60 crores is... As against rupees 105 crores in q one f y twenty six. It's... It has decreased 43% year on year. This is decrease... Is primarily on account of lower export benefits from the PLS schemes during the year. Gross margins. Coming to the profitability of gross margins, the upward trajectory continues. But this year, this quarter was 74.6%, up from 71.3% in q one f I f I twenty six last year.

14:09 This three thirty basis points year on year improvement is driven by multiple factors, which includes better product mix, higher profitability in India, increased volumes and cost improvements, and efficiencies, which have under... Which we have undertaken over the last several quarters. Employee benefit expenses. For the quarter, employee benefit expenses stood at 1,383 crores, increasing twenty eight twenty eight percent year on year from INR thousand 83 crores in q one FY twenty six, translating to 16.8% of sales versus 17.6% last year. This change is largely attributable to higher cost due to regular annual increments and business growth during the period.

14:54 Manufacturing other expenses. Q one f I twenty seven manufacturing other expenses came in at 2,341 crores, which translates to approximately 28.5% of sales as compared to 28.7% of sales in q one last year. The expenses were higher mainly due to higher volumes in normal course of the business, higher SG and A expenses in account of field force expansion, license fee payments, and a part of settlement agreements. R and D at 608 crores is 7.4% of sales in f I... In q one f I twenty seven as compared to rupees 498 crores in... At 8.1% of sales in q one f I twenty six. For the full year, r and d is expected to be around 8%.

15:40 EBITDA. EBITDA excluding forex and other income during the quarter was 2,464 crores. We service 1,641 crores in the same period last year, an increase of 50% year on year with margins of 30% vis a vis 30... 26.6% last year in the same period, an increase of three forty basis points over the last year. During the full year, as indicated by Vinita, we expect EBITDA margins to be around the 25% mark. Depreciation and amortization at 453 as compared to 299 crores in corresponding quarter last year. This increase is due to higher amortization of settlement agreements. The effective tax rate stood at 298%, for the quarter.

16:27 For the full year, however, we expect it to be in the region of 27 to 28%. In respect of balance sheet items, the operating working capital was $88,260 crores as of 06/30/2026 as compared to 7,132 crores as of 03/31/2026, which translates to ninety days of networking capital as compared to eighty seven days recorded earlier. The net cash stood at 2,831 crores as of June 30. We sat as 4,636 crores, as of the thirty first March quarter, largely due to closure of our Vishu Pharma acquisition. Whilst we focus on increased cash generation for our pay... For our business, we'd like to highlight that we continue to explore strategic allocation of our capital to ensure that long term mission of the company, including on the specialty front.

17:16 ROCE for the company translates to 29.5%. We service 28.4% as at end to f I twenty six. On the ESG front, Lupin continues to advance steadily towards its twenty thirty sustainability goals, achieving approximately 41% reduction in greenhouse gas emissions and 45% water recycling as of as of f I twenty six. Our efforts have been recognized externally through inclusion of the Time World's most sustainable companies 2026 list for the first time. With this, we'll open the floor for discussions. Thank you very much, sir. We'll now begin the question and answer session. Request that all the participants who wish to ask questions to raise your hands on the participant tab on the screen.

18:03 We will wait for thirty seconds for the queue to assemble. Thank you. Thank you for your patience. We'll take the first question from. Are you there? Yeah. Yeah.

18:50 Hi. Thank you for the opportunity. My first question is on your opening remarks where you mentioned that US sales would be back on growth trajectory starting FY twenty eight. So just want to understand this growth will be on the base of US, US, 1.1 to one point, 2,000,000,000 number, which you mentioned before '27, or, how should we, understand this part? That's right. Over the specific '27 base. Okay. So The on a base of 1,200,000,000 in FY '28. Okay. That's clear. My second question is if you can update us on some of the key launches or key products in injectables and respiratory space, which will be meaningful from your US sales perspective.

19:48 Yeah. So multiple products, across, I'd say biosimilars, injectables, as well as respiratory. On the... You know, I'll say biosimilars and injectables. There's a lot of disturbance on this line. The main thing you might like to Mute yourself. Yourself. Yeah. Thank you. So as I was saying that multiple, products in the biosimilars, injectables, and respiratory front, over the next couple of years. I mean, fiscal year twenty seven itself, we, have yet to launch pegfilgrastim that is going to be a h two product for us. We'll, be expected to contribute very nicely into the second half.

20:35 Then we have a five zero five b two to dalbavansin injectable that is, gonna be a good sized product for us, for ourselves as well. And, nasal sprays like fluticasone nasal spray, you know, as well as, injectables, Sagamadex, epinephrine, raltegravir where we exclusive first to file, you know, injection, which is all, you know, it's fiscal year twenty seven. Then fiscal year twenty eight, we have products like, I think, full year impact of peculgrastim. We have diazepam nasal spray. We have epinephrine nasal spray as well as apixaban five zero five b two. I mean, that is starting to look like a material opportunity for us.

21:32 We're still sizing it up, but looking fairly interesting for us. Then I'll... And sucrose injectable, Saxenda. We have Ivacaftor, exclusive first to file, midazolam nasal spray, and they're just few of the products. We have other nasal sprays as well as, injectables, in the pipeline that, we'll expect to bring to market in fiscal year twenty eight. And then I'd say that, in fiscal year twenty nine, we should have more biosimilars, Eflibercept, you know, petulgrastim, on body. Julera is expected. You know? Hopefully, we can get it in fiscal year twenty eight, but, if not, for for certain in fiscal year twenty nine on the market.

22:21 And depending on, you know, what transpires from a p four standpoint, we would expect also Spiriva Respimat. We've made good progress on that front. We expect to file it in this fiscal year. We should, you know, subject to what happens with the brand, you know, the p four. We could potentially be in the market on the rest of that front as well in fiscal year twenty nine. Elaborate answer on this. My last question is when you look at the tiotropium market share, it has been hovering around mid thirties.

23:06 So do you have room to improve it further? And if you can talk a bit about your progress in the channel... In the incremental channels for this product. Thank you. No. It's kind of settled at that 38% level, and, you know, there is a good balance between what the brand has in terms of share and what we have in terms of market share. So at this point, it should hover around that that level. You can unmute yourself. Yeah. I'll get back in the queue. I'm done with my questions. Thank you. Thank you.

23:51 Thank you for your question. We'll take the next question from. Hi. Good evening. Thank you for taking my call. There? Yeah. Yeah. Can you hear me now? Yeah. Yes. We can. Yeah. Yeah. Just trying to do math on your US guidance. Right? So we did $366,000,000 this quarter. We have talked about 1.1 to 1,200,000,000 for the full year. So that brings us, like, roughly 100,000,000 lower per quarter in some of the quarters. Right? So if I did... I'm doing simple math. Between $2.50 and $280,000,000 roughly. Right? So, you know, what is that big step down? Is it both the top two products that will likely see the step down, or is it... Is there an element of conservatism built into the kind of step down? So just wanna get some qualitative sense of how we... Why...

24:45 Despite a very strong q one, how are we looking at it? Yeah. So in q one, you don't have any additional competition on tolvaptan. And from q two onwards, you will start seeing the impact of, Apotex and Teva. We also expect in September, we could potentially have, one more entrant. So we expect to be, you know, four player market with tolvaptan, and we expect the market to grow as well for the molecule given that it is still 40% generic conversion so far. But, you know, given the additional competition, we expect pricing to come down and, obviously, also some share of redistribution.

25:34 So so we expect, you know, tolvaptan to come down over the next couple of quarters. Mirabegron has already seen, you know, pressure in the first quarter, and we expect that to be a full quarter impact from q two onwards. So, you know, we expect, you know, revenues to be anywhere between 250 to $280,000,000 a quarter over the next couple of quarters. Got it, Anita. Thank you. And when I look at your full year margin guidance of, what, about 25%, we did the gross margins of 75% for the current quarter. Right? So what's a more normalized gross margin, please?

26:20 So it is really going to be a function of, you know, how much of total up in sales and at what realization, the kind of competition that you see out there. And more importantly, you know, the impact of, in fact, price increases that we have seen in the recent past that, you know, post the year, you know, the cost increase that is because of, you know, the geopolitical tensions around. So the first quarter was not so hugely impacted because of the fact that we had into... Inventories that we carried forward. But going forward, we will have to take that into account. So I think we are being a little more cautious when you speak about the fact that, the EBITDA margins would be in the range of 24 to 25. And, obviously, this would be a... You know, as a reduction of, on on the gross margins front as well. Got it. Thank you, Ramesh. All the best.

27:06 Thanks, Shyam. We'll take the next question from Neha Manpuria. Yeah. Thanks for taking my question. Vinita, in Tolvaptan, we have seen a quarter on quarter increase in market share. Would that be a fair assumption? Yes. And I think in one of your previous call, you'd mentioned that despite additional competition coming through, we should be able to defend our market share in tolvaptan. Do you see that dynamic playing out given, you know, that we've been able to gain share over the last, you know, few quarters? Yes. We would expect the market share, you know, the tail to be longer because of the fact that it's a specialty, you know, pharmacy product as well as REMS program.

27:52 But, you know, we obviously have... We'll have to give some share as well to the additional entrants. Okay. Understood. And in... On Epixaban, how should we think about the opportunity? I know you mentioned, you know, you're still, you know, sizing it up. But how should we think about the five zero five b two launch and our ability to take market shares, you know, in case we launch it in '28? Yes. So we are looking at the the different channels for the product. It's a very large brand, which makes it a very interesting opportunity. But, given, you know, the time we have prior to, the other, generics in... Entering the market in fiscal year twenty nine, we we believe that a very targeted approach around a few channels is gonna serve us well. So we are looking at ways and means of entering, you know, a few of the the the larger channels where we can, through our national accounts efforts as well as some incremental commercial efforts, be able to get strong access.

29:06 Okay. Understood. And do you think this should be as large as probably, you know, mira and tolvaptan was for us? Could this be as large in your view? It it it it could potentially get there. Yeah. Last question on, you know, biosimilars. You know, given... Let's take a, you know, three year time frame because you have a couple of launches coming in '29. How big can the biosimilars piece be for us, you know, here as well as in Europe put together? Yeah. Put together, it's a material opportunity for us. The US itself, you know, of course, we have to deliver this year, but it's looking like a very interesting opportunity with. Ranibizumab, we'll have to convert the market. I mean, there's really...

29:57 You know, the market has gone into the other products. So I think a little bit of a smaller opportunity compared to pegfilgrastim, but ranibizumab looks like a big opportunity for us in Europe in, a few countries direct and, also through our partnerships with Sandoz as well as others. You know, now with the busy pharma footprint that we have across the ophthalmology, you know, call point, we're leverage that as well for ranibizumab. And then we have aflibercept coming in fiscal year twenty nine and the Petrobras OBI. And then fiscal year thirty, of course, is on calendar '29, we'll have etranocept.

30:42 So I think, you know, we are we are looking at biosimilars ramping up in the next three years for... To a couple of $100,000,000, you know, scale business across these key markets. Thank you so much, Meta. That's very helpful. Thank you, Neha. We'll take the next question from Surya Patra. Hello, Surya? Hello, Am I audible? Yeah. Yeah. Thanks for the opportunity, ma'am. See, my first question is on on the respiratory portfolio. See, how big is the respiratory portfolio's contribution to the overall business for LUPIN right now?

31:30 And in terms of The US business, if we see, what would be its share correctly, ma'am? So in the base business, I'm just going by memory here, it's over 20% right now with really two main products, you know, Teotropium as well as as Teotropium. Albuterol. Yeah. Albuterol as well as Zopinx. So, you know, a little bit more than 20% even. And as as we look at, you know, our pipeline, we have Dulera that is filed. We have multiple products that we are now making progress on. Like Respimat, we have made significant progress over the last quarter, and we should... We are in a position to file this fiscal year.

32:17 We also have been successful with the pivotal PK on Brio. So very pleased to get the Lipta franchise also started from a pipeline perspective, and we would expect to file the ANDA later this fiscal year. We have green propellants, you know, the Lupin, new propellant filed in Europe in the last quarter, in fact, and, multiple pipeline programs also making progress, for Europe. So, really pleased with the progress now that we're making on the respiratory pipeline, both with MDIs, DPIs, you know, our Respimat, Ellipta, as well as MDI products and green propellants.

33:08 Sure. So in fact, from the albuterol side, which the market share, which has, to some extent, subsided from the level of 19, 20 to 16% currently, and possibly, we have already reached the peak potential of the tiotropium. So here in the mid mid term till the time that the pipeline product are getting launched in The US, so whether it is fair to believe that the the respiratory portfolio in The US is likely to remain flattish or kind of moderating like that? Well, this is hard to predict for certain. You know? But but right now, the albuterol market has stabilized.

33:53 It has, you know, the 16% share, and the relative positions of competition have kind of stabilized based on the the supply situations from the different competitors. You know? So... And on Teotropium, we we know how difficult it has been for us. Right. So we we, you know, we haven't really heard of any imminent approvals and launches, so we would expect that, you know, the baseline should be stable as Dulera nasal spray products in the next year, you know, and then the new products, Respimat, as well as others come to market.

34:39 Sure, ma'am. My next question is on the Europe business, which has been doing great for us, and that is visible even in this quarter. But I'll just going through the kind of a higher rebate policy initiated by Germany wherein they are kind of doubling the rebate requirement. So given that, what would be your reading about the either profitability or the pricing pressure, what we can see in the European market? Or let's say, if it is Germany, then even if we restrict that policy to Germany, then what implication that overall euro portfolio that can see because of this? Yeah. So it's very interesting, the dynamics in all of the European countries that we're realizing.

35:26 You know? And even in Germany, on the one side, you see the increase in rebate on a part of a portfolio. But in others, for example, in our biosimilars, you know, in particular for ranibizumab and the Flavorcept, we are finding that, it's not part of the AOK tenders anymore. So it it becomes a nice branded opportunity. You know, overall, we're seeing all of the major European markets really struggling with, the overall health care budgets, their overall drug spend budgets, and they are struggling to really bring more innovative products into, the fold, you know, and, not making enough, products available for unmet needs for patients. So we're starting to see, like, in countries like France, we have recently noticed that they are really doubling down on biosimilars just given how important the the biologics LOE is over the next, you know...

36:29 Right now, it's like 100 plus billion dollars worth of bio... Biosimilars that go up in over the next five to ten years. So, you know, more incentives for, substitution of biosimilars that we have seen to be able to, reduce some of the drug spend, so that they can make room for innovative products. And I think if that model works for France, we will see very soon the other countries following a similar model to be able to afford innovation while making, you know, the the generic side and the bios... Biosimilar side of the business more, you know, substitutable to be able to get efficient access to to medicines.

37:17 So so we we have... We actually are very optimistic, very hopeful that Europe is going to increasingly become a more important geography for LUPIN for certain, just given our portfolio of respiratory products, biosimilars on overall, as as well as the ophthalmology biosimilars, as well as the specialty portfolio. We we have tremendous headroom to be able to build in Europe. Sure, ma'am. Just last one question from my side regards to biosimilars. Two points specifically here. How important and... Or let's say, how sizable this two opportunity... First two product opportunity in The US for us because PEGFIL or even the ranibizumab, if you consider both are kind of a partner product and the prices for this product, for biosimilar prices, has already corrected to the tune of 85 to 90%.

38:19 So considering that how sizable this could be, that is the first point. And secondly, given the kind of price erosion SARP that has happened already in The US market, how... I mean, how is the European product prices there in biosimilars compared to that of The US? Yeah. So we... We're finding actually even with pegfilgrastim, you know, as I mentioned earlier, also last couple of quarters, we've been pleasantly surprised with, the opportunity that we see right now. You know? And, of course, we'll, want to, deliver that in the next, this fiscal year to be able to gain that confidence operationally. But, as we look at our, you know, partners forecast and, what we can, do in the current fiscal year, it's a really good size opportunity for LUPIN.

39:12 And as I mentioned, you know, I will not size up each and every product. But if I look at the next three years between US and Europe with these three zero... Three products or so, we have a couple of $100,000,000 worth of opportunity on the biosimilars front. And price difference in US and Europe? So in Europe, we have found, you know, the pricing on our products is is fairly stable. And like I mentioned, we're also starting to see new developments like, in Germany. These products are not part of tenders, so more of a branded opportunity on the ophthalmology front. In France, new measures to, you know, that will likely enhance biosimilar adoption and ease market access for us, all of which that gives us this optimism on the biosimilars front.

40:10 Okay. Sure. Thank you, ma'am. Shiva, all the best. Thank you. Thanks,. We'll take the next question from. Hi. I think on mute. Yeah. Hi. Good morning and good evening., just a follow-up question on the... On a couple of products which you mentioned. You mentioned first to file exclusivity in FY '27. I didn't get the name, but is that is that a sole exclusivity? On. Yes. I mentioned that. Sorry. Which one? Yeah. Okay. Second, in FY '28, which is the one you mentioned as sole exclusivity?

40:59 I think I mentioned diazepam, epinephrine, Effie. That is two nasal sprays. Ivacaftor is another. And, yeah, those would be the main ones. Suflav is another exclusive first to file next year. Got it. And last question on SPIRITA res... ReciMat. How is the market compared to the DPI? It's moved more towards the ReciMat. Okay. If you could give some rough size idea. We'll we'll just get back to you with that. Sure. I don't have the exact numbers of... Off the top of my head.

41:45 Great. Thank you. I'll jump back. Thank you. Yeah. Thank you, Binu. We'll take the next question from. Hi. Thank you for the opportunity. The first question is on the India business that you shared that we are planning to derive one third of the revenue from innovative products. So can you elaborate more on this strategy? What would be the kind of required investment here both from balance sheet and p and l perspective? And the usual impression is such in licensing deals are not very accretive to profitability. Right? So what are we going to do differently? And from therapy perspective, do we do we stick to our key therapies of cardiac antidiabetic, or we look at a more high growth therapies like oncology?

42:39 That would be the first question. Sure. So I think there's three avenues of proprietary products. One is our internal pipeline. So we're building those internally. Another is in licensing deals as you talked. And the other... The most important and what will be the biggest will be pure innovative NCEs that we would bring to market. Products like buffanglotide that we announced a little while ago, which is now in the clinical development path. And in the next couple of years, we should be able to bring to market. So we've we've allocated the capital for for this. It's actually, you know, just purely India. It's it's not that expensive from overall, licensing or a development perspective. Obviously, you need to have the entire suite of capabilities. So you do need to have the ability to assess a new chemical entity at an early stage, do the clinical development, and bring it to market.

43:34 And in a market like India, you know, how do you build an ability to do, you know, over a period of time, 30, 40, 50 assets at at a time? The goal of a billion dollars or one third of our business to come from innovative products is an... Is an aspiration for the next ten years. But I think if you break it down, it basically means to be able to do 10, 15 products every year. And in the next... You know, it is... I think it's coming together quite well. So in the next three years, we should start bringing those products to, to market and really build that pipeline. Obviously, key interest would be in our key therapy area, so, which have, you know, products in respiratory and cardiology and diabetes.

44:22 From an innovation perspective, obviously, you know, 50% of what you would see as assets would be in areas like oncology where we're not strong. Then we would cherry pick, and we would pick assets that we feel can be really, you know, first in class so that it can make a real difference in the market. And, you know, we've started the journey. I think we've started it with, you know, putting strong capability together as well, and we'd love to keep updating you as the pipeline develops. So so we are suggesting, like, 80 launches in India in the next three year. Right? So how many of that you think, you know, would be from from this bucket? No. So over a period of the next ten years, we're looking at 60 to 70 launches of the innovative products. In the next three years, you know, very small fraction. I I would say not even, you know, three, four of these would be truly innovative products.

45:19 Yeah. And in terms of profitability, we know would you... Would it be similar to our India business whenever it scales up, or how should we think in the longer run? I mean, certainly similar, if not better, actually. So we would expect that. I think you've already pointed to the point on, you know, how much is the actual burn on the clinical trial partner on. But I think the entire model looks really good. And in the next few years, you'll start seeing positive returns coming from it. Sure. And the next question from... For, Vinita, ma'am. Given that we have now, you know, established track record of selling both DPI, MDI products in US, How is it helping us in terms of, you know, clearing or, you know, like, the next phase of respiratory products in terms of development cycles in your view?

46:16 How is... How the development cycles are shrinking, and what are some of the learnings which would help you bring this next wave of products to the market, you know, efficiently? I'd say that, you know, in the different platforms, the complexities are different. So on the MDI front, it's gonna be a significant year of filings, you know, on the respiratory, MDI products this year. I'd say on the Ellipta platform, that was likely our most challenging platform. Now we've been working on it for, multiple years, and, I'm very pleased to finally, be able to get a positive PK on the first product. Now would want to get, the next, major is, getting Trelegy right, which our team is working upon, and, they're going to apply the learnings they have from Brio onto that product.

47:12 And then, on the SPIRITA front, on the Respimat, SPIRITA, that was more of a device, challenge that we faced that, now that we have cleared it and, we'll file the product this year, the the follow on products become easier for us. So I'd say different level of complexity across the different platforms, but lot of learnings over the last couple of years that the team will leverage to be able to expedite the, filings as well as, potential approvals that, you know, given that these products are either CGT or, you know, have no competition in the marketplace, the FDA is also looking to expedite, these approvals.

48:00 So I'm gonna look forward to leveraging that. In addition to that, a number of these products are, you know, some are out of India, some out of our facility in Coral Springs. We'll also want to leverage the Coral Springs domestic manufacturing in The US for expedited review of these products, you know, that the FDA spoke... The agent of administration is focused on to get more on shoring of products in The US. And just one aspect of this. Let's say if you have an MDI line for one product, can it... The capacity becomes fungible for another MDI, or it does not?

48:47 It does. It does. Okay. Okay. Great. And lastly, on the Apixaban five zero five v two. So from here, what are the key monitorables for you? And then what's the what's the duration advantage that we will have vis a vis the generics, I think, which has slated to enter early part of FY twenty ninth, I believe. Yeah. Fiscal twenty nine. So, you know, we are, as I mentioned, we are sizing it up, but, like, material brands, so, you know, we'll be, one first, monitorable, you know, thing that one can track is the approval. We have a goal date of September. We are hoping that we get approval in September.

49:35 And then simultaneously, we're building up launch quantities, and we expect to start having material, you know, commercial quantities start in January '27 calendar. And we would expect somewhere in the summer that we should launch and hopefully get ten to twelve months before others enter. Okay. And, lastly, can you share which, plant is it filed from? Kunal, can we request you to get back on the Sure. Sure. Yes. Thank you. I'll just quickly respond to that, though. It's Somerset. Please. Please. Yeah. Somerset. Okay. Perfect. Been cleared recently. Yes. Thank you, and all the best. Thank you. Thank you,. We'll take the next question from.

50:26 Yeah. Hello. Thanks for the opportunity. Ma'am, in the opening remarks, you alluded to fluticasone nasal spray. So which... First of all, which dosage have you filed, and, like, where are we in terms of the approval process? Yes. So we filed both the, you know, the Rx as well as OTC. We would expect the Rx approval to come in this year and OTC in the next year, fiscal year twenty eight. And all, like, formulation as well as API being manufactured in house or how is it? The formulation is all in house. The API is not. And the device is from the from the In house.

51:16 Device is also in house. No. Device... I mean, we chose the device, of course, to a device manufacturer. Got it. That's fine. And it's also in Somerset. Thank you. Thank you, Prashad. So we take the Yeah. Me. Hello? Prashad, are you there? Sure. If I'm right. Yeah. Yeah. Please. Please. Yes. I am there. Just one more question if I may. Ma'am, you referred to a PIX7 five zero five b two. Right? That's right. If you could just, like, qualitatively help understand what's the differentiation this product is going to bring compared to what the Innovators product is.

52:06 Well, you know, well, maybe share that closer to the launch date. Okay. Yeah. Okay. We're sizing up the opportunity, and we'll be in a better position to share that over the next couple of quarters. Sure. Sure. I was trying to just understand the value addition compared to the innovative product, not so much, like, in terms of pricing. It was more in terms of the value addition compared to an innovative product. Right. It definitely would be a a, you know, major unmet need for patients that we have targeted. But let me come... Let us come back to you with thoughts around it over the next couple of quarters. Sure. That's it from us. Thanks thanks a lot for your response.

52:53 Thank you,. We'll take the next question from Vivek Agarwal. Hello, Vivek? Hello? Yeah. Yeah. Can you hear me? Yeah. Thanks. Just a couple of questions on the cost base. If you if you look at your staff cost and other expenses have gone up meaningfully. So just, if you can help us understand how to look at these lines going forward and what is driving, these cost lines significantly. Thank you. The cost lines are essentially because of, you know, increments. They're, of course, you know, based again on the needs of business, including their region. We have also been recruiting people and the like.

53:39 And there's also an FX impact, you know, at least we saw as the previous year. Understood. So so is it fair to, understand, right, before you launch a major product, that is a pizza ban, and in between couple of major products, you are seeing incremental competition, there may be few quarters where your EBITDA margin can fall even below 20%. Is that a possibility? There would be volatility, between, quarters for sure. The magnitude is something that we can't actually speak about at this stage. But you would also, do well to understand that our r and d expenditure is at least a tad about the competition, firstly. And secondly, we also have the impact of adjacencies and so on, which have been captured. They're still evolving.

54:25 Some of them are still making losses, which are... Though, of course, I think it will come down over time. Next year, for example, we believe the diagnostics business will do very well. You know, it will be baking even for sure. And I would say the same thing of, other businesses. You know, our digital business is evolving extremely well. You could say that of the OTC business as well and and CDMO. But I think you would do well to remember that all of these are at this stage loss making and therefore is impacting EBITDA margins and, of course, our overall EPS at this stage. But, clearly, that would, you know, be a thing of the past in in quarters to come. Understood. So is it possible for you to quantify what kind of the losses in terms of percentage hit on EBITDA margin these adjust... Adjacencies are contributing at this point of time? Overall about a percentage percentage and a half, I would say.

55:16 Understood. And one question... One product specific question I have. You have a one product, one FTF that is Xywav. So is it a f y twenty nine thirty type of product, or is it, like, f y 30 or beyond? Yeah. It's f y 33 product for us. Understood. Thank you. That's from my side. Thank you so much, Vivek. We'll take the next question from. Hello. Sorry about it. Yeah. Yeah. Thanks for the opportunity. Just one question on the other developed market in India. What could be the sustainable, you know, growth in this market over next couple of years? And secondly, you know, with the kind of growth we are seeing, how the profitability of the margins in the key market have moved over last, you know, three, four quarters.

56:14 So, I mean, we we... We're looking at potentially double digit growth, you know, in some years higher than others, but anywhere between 10 to 20% over the next couple of years. And the margins also just given the scale of the business is growing. You know, we've been subscale in... So far and, you know, with the additional portfolio as well as, you know, the expansion with the pipeline, we expect margins to continue to expand as well. Okay. And just secondly, do we need incremental investment to be made in any of the geography or any potential, you inorganic opportunity which we we could seek in any of these specific countries?

57:07 Yes. We would expect, you know, for us to really maximize the biosimilars business. We are gonna make, you know, small but commercial investment, in particular, in The US. Even for the Pfizer five b two of epaxiban, you know, and our strategy on the Pfizer five b two front because we have other products that we have targeted as well. We'll likely make a small commercial investment as well. Okay. Thank you. Welcome. Thank you, sir. We'll take the next... One last question from. Hi. Am I audible? Yes. Yeah.

57:53 Thank you. Thank you for the opportunity. I I have a question on The US side of the business where we, you know, we have put out the number in terms of upcoming pipeline of 50 FPS, 21 exclusive ones. If you can... I I know product specific will be very hard for you to to to provide. But if you can cumulatively provide some indication on on the market size of those and how should one look at, you know, monetizing those over over the course of next three three to five years as as you've explained few of the products already. But if you can communicate with me, understand... Help us understand how how should those numbers can contribute to our incremental revenue from the... On... In The US markets.

58:42 Perhaps what we can do is get back to you offline to take you through the overall brand revenues and the relative products where we have limited competition. Overall, you know, we're looking at a portfolio from the complex generics doubling over the next three to five years. And that in itself, you know, along with the fact that we believe, you know, with the pipeline we have, we should be able to grow our business in the next three to five years, you know, with the inherent growth out of this pipeline plus the fact that we are increasing from a complexity standpoint. We are, you know, looking at a potential expansion in margins. Of course, we'll make investments as well, as I mentioned, and we'll maximize these these opportunities.

59:36 But maybe our team can get back to you offline on, you know, looking at the overall market size and the like. Got it. And on the on the EMEA side, and I I believe the growth is coming because of the Visopharm acquisition for last four quarters. Like, base of q two kind of makes in the Visopharm. How should one look at the growth in that piece, EMEA business going forward? Yes. So like I mentioned that we're looking at anywhere from 10 to 20% level in Europe. So splitting out Africa, South Africa separately is a little bit lower in South Africa just given the scale we are at With the pipeline portfolio that we have and opportunities, Europe should grow at that 10 to 20% level.

1:00:35 Got it. And ROW markets, any any color on the growth? Also, the double digit growth. To continue? Yes. Okay. Got it. I'll I'll I'll kind of touch base with the with the team offline to understand the pipeline better. Yeah. Thank you. Thank you. That's all from me. Thank you,. Thank you very much. I now hand the conference over to the management for their closing comments. Well, thank you, friends, for all your questions, and, hopefully, we've been able to answer majority of them. But if not, the team will, connect and, clarify any, open questions you have. We, as I mentioned, are, optimistic, about a near term opportunity as well as long term opportunity, both in the near term to be able to navigate our, the near term challenges with, the opportunities we have from a portfolio perspective, evolving in areas that we've invested for the last many years.

1:01:39 And in the longer term, as Nilesh mentioned also, you know, as we evolve innovation innovation in India, innovation in our specialty business, in Europe as well as The US, We look forward to delivering, you know, long term growth as well as return for all our stakeholders. Thank you again, and we look forward to connecting with you in the future. Thank you. Thank you, ma'am. Thank you, sir. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us, and you may now exit the webinar. Thank you.