Lupin (NSE:LUPIN) Q2 2027 Earnings Call

0:03 Hello, and good evening. Welcome to Lupin Limited q two FY twenty seven earnings conference call. Thank you for your participation in the call today. Please note that all the participants' line will be in listen only mode, and there'll 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. Hello, friends. Welcome to our q two earnings call. Joining me here are Nilesh, our managing director Ramesh, our CFO and Ravi, our head of investor relations. We are pleased to share performance for the second quarter, the progress we are making on our strategic priorities and our outlook for the remainder of the fiscal year.

0:51 We delivered another quarter of steady performance, supported by sustained momentum across most of our major geographies. Our organic revenue growth remained in double digits, driven by strong performance in India and other developed markets. Importantly, this growth reflects the increasing strength and diversification of our business with multiple markets contributing meaningfully to our overall performance. We expect this momentum to continue into the second half of the year with organic growth of around 20% ex US. On profitability, we delivered EBITDA margins of around 25% during the quarter despite increased investments in R and D and a challenging geopolitical and operating environment.

1:47 We remain committed to our fiscal year twenty seven margin guidance of around 24 to 25% while recognizing that margins are likely to moderate in the coming quarters. This reflects intensifying competition in some of our key U. S. Products, increased investment in our R and D pipeline and higher input costs arising from the challenging macroeconomic environment in The Middle East. Now I'll turn to individual business segments. Our US business continued to navigate an evolving competitive environment during the quarter. As anticipated, competition in Tolvaptan intensified with the entry of two additional generic players.

2:33 While our base portfolio benefited from higher volumes and contributions from seasonal products, these gains were offset by pricing pressures in certain products, particularly tolvaptan. We expect competitive intensity in tolvaptan to increase further with the possibility of additional entrants over the coming quarters. For fiscal year twenty twenty seven, we continue to expect U. S. Revenues in the range of 1,100,000,000 to $1,200,000,000 Growth in our base business, our new injectable launches and contributions from pegfilgrastim are expected to help offset the impact on increasing competition in key products. More importantly, our mid to long term plan for The US remains on track.

3:23 Our priority is to double the share of complex products in our US portfolio with respiratory products, complex injectables, and biosimilars serving as key growth drivers. We are on track to file more than 15 products during the current fiscal. Over the next three years, we expect to launch more than 60 products in The US, including approximately 25 injectable and respiratory products, five biosimilars, and two to three five zero five b two products. This pipeline represents an important step in reshaping our US business towards higher complexity products, creating a more sustainable growth platform over time. Turning to India, our business delivered 14.7% year on year growth this quarter, with the core prescription business growing 13.8% aided by volume growth of 6%.

4:23 For the first half, our prescription business grew 14.4% compared to 14.3% growth in IBM. Our chronic segment grew 19.5% ahead of IBM's 17.2% growth. Chronic therapies now account for around 66% of our portfolio, up from 65% in fiscal year twenty six, and we aim to increase this share to 70% over the next five years. Most of our key therapy areas outpaced their respective markets. In the first half, our anti diabetes and cardiac segments grew at 1.5 times and 1.1 times their respective category growth rates.

5:13 Our diabetes segment was a particular highlight, delivering 25 plus year over year growth this quarter, our third consecutive quarter of 20% plus growth. This performance was led by a market leadership in human insulin and the successful launch of semaglutide injection. The IPM market growth reached a six quarter high of 14.7% in q two. We are very well positioned to capitalize on this momentum and remain confident that our India formulations business will grow at 1.2 times to 1.3 times the IPM growth rate, supported by a prescription sales force of nearly 11,400 people and a pipeline of more than 80 new product launches over the coming years.

6:10 Looking further ahead, our target is for novel proprietary products to contribute one third of our India revenues within the next ten years. We will build this portfolio through in house development and in licensing, drawing on our partnership, track record, and our brand building, development, regulatory, and clinical capabilities. We were very pleased to get, approved for the first green propellant MDI in India this past week. Our other developed markets, Europe, Canada, and Australia, delivered 46% year on year sales growth this quarter and accounted for 15% of our revenues compared with 11% in fiscal year twenty six and fourteen percent in q one fiscal year twenty seven.

7:04 Within this, our European business sustained strong momentum with 45% year over year growth. During the quarter, we entered into an exclusive licensing partnership with TenPoints Therapeutics to commercialize Uvetsi in Europe. This once daily dual agent eye drop for presbyopia advances our ophthalmology portfolio and builds on our strategy to expand specialty care through innovative therapies that meet unmet patient needs. Europe remains an under indexed market for us with a clear pathway for growth across complex generics, biosimilars, and specialty. We are very pleased with the strong foundation we are building in Europe on the ophthalmology front to the recent acquisition of Visu Pharma and the addition of Uvetsi in the near future.

8:02 Turning to r and d. R and d remains central to our growth strategy. With investment at 7.9% of sales this quarter focused on complex and specialty platforms. The tentative approval of a novel epaxiban oral suspension through the Pfizer five b two pathway during the quarter underscores the strength of our r and d capabilities. Our pipeline includes more than 55 injectables and respiratory products under active development. We're also preparing to file four to five biosimilars for The US market over the next few years. We have built a strong five zero five b two pipeline with product launches expected to begin this fiscal year and a potential launch of apixaban oral suspension in fiscal year twenty eight.

8:56 For India, we continue to strengthen our innovation portfolio through in house development and in licensing of late stage assets. Quality and compliance remain fundamental to our business. At Pitampu Unit two, we have submitted our responses and remain on track with our remediation efforts. We are very pleased with the outcomes of the inspections we have had this calendar year across our network. We are fully committed to upholding the highest standards of compliance across our sites globally. In closing, we remain on track to achieve our fiscal year twenty seven revenue growth and profitability goals as we navigate an increasingly competitive operating environment.

9:44 We are investing on multiple fronts, including building scale to capture the growth opportunities in India, enhancing our specialty capabilities in Europe, and tapping the growing biosimilar opportunities in The US. This coupled with a strong pipeline provides a firm foundation for sustainable growth and a more resilient business going forward. With this, I will hand it over to Ramesh for a detailed analysis of our financials. Thank you, Vinita. Friends, I welcome you all to our q two FY twenty seven earnings call. As you may have seen from the results, this has been a steady quarter for the company with the results within the overall guidance we shared in our last interaction in August. Whilst revenue from operations has grown at a healthy 11% year on year, the overall margins have been impacted by the additional competition we have witnessed in some of our key products in The US.

10:41 Diving into the numbers, total revenues from operations, including other income for Q2 FY twenty seven came in at INR 7,827 crores as compared to INR 7,048 crores in Q2 FY twenty six last year, a growth of 11% year on year. Amongst the key markets, The US grew by 9.3% year on year, India grew 14.7%, other developed markets grew around 46% year on year, and API grew about 20% year on year. Emerging markets declined by 4% year on year. As Vinita mentioned, our organic growth was in double digits, highlighting the resilience of a diversified business model. Speaking about The US business, this quarter, The US business recorded US$317,000,000, a decline of 13.4% quarter on quarter on constant currency basis.

11:34 The quarter on quarter decline is largely due to the increased competition and loss of exclusivity on some of our key products like mirabegron and tolvaptan, partially offset by seasonal demand and volume growth in some select products. Once we continue to benefit from our differentiated strategy on focusing on complex products, as indicated in our earlier interaction, we see The US business significantly impacted in the short term, the increased competitive intensity of some of these key products. This will be offset with the commercial launch of a biosimilars portfolio in The US this year and from the anticipated launch of apixaban oral suspension of which we received tentative approval this quarter. I would like to mention that we have a rich pipeline, including complex injectables, respiratory products, exclusive first two files, biosimilars and firefly b twos, which should augur well for the long term growth of our US business.

12:26 Turning to India, the region business grew by 14.7% year on year during the quarter. Within this, our core prescription business grew by 13.8% year on year and 14.4% year on year in the quarter and h one respectively. Key segments like diabetes, cardio... Cardiology and dermatology handsomely outperformed their category growth at 1.5 x, 1.1 x and 1.5 x respectively during the first six months, whilst volume growth has been a healthy 6.1% during the same period. The chronic segment grew by 19.5% in h one vis a vis IPM growth of 17.2%, and the chronic share in the mix has increased to 66% in h one f y twenty seven from around 65% in f y twenty six.

13:16 The share of in licensed product is around 6% similar to FY twenty six levels. We launched 12 products in H1 FY twenty seven and plan to launch about 20 products in FY twenty seven vis a vis 15 products which we had launched in FY twenty six. We remain confident that our India formulations business will continue to outperform IPM by 1.2 to 1.3 x supported by strong sales force of more than 11,000 people and a pipeline of more than 18 new product launches over the coming years, including innovation in in house and in licensed products. Other developed markets are concerned. Revenues in our other developed markets were rupees 1,082 crores, representing a growth of 46% year on year. This is led by strong sales in Australia, Canada and Europe.

14:08 We're focusing on various strategic initiatives to grow our business in this segment, especially in Europe going ahead. Other emerging markets, they grew by 4% year on year in this quarter with lower sales in Brazil offsetting double digit growth in markets like South Africa, Philippines and Mexico. Turning to the P and L. Other operating income at rupees 42 crores, as against 216 crores in Q2 FY twenty six. This decrease of 81% is primarily due to the lower export benefits from the PLA screens during the quarter. Turning to the gross margins. Gross margins came in at 74.2% as compared to 73.3% last year and 74.6 in q one. Whilst margins have sequentially benefited from increased volumes, cost initiatives, and higher product profitability in India, we've also seen downsides from increased competitive intensity on some key products in The US and elevated geopolitical risk in The Middle East.

15:05 Employee benefit expenses at rupees 1,424 crores increased around 29% year on year from 1,106 crores in q two of five twenty six, translating to 18.3% of sales as compared to 16.2% in Q2 last year. This change is largely attributable to higher costs due to regular annual increments and business growth during the year. Q two FY twenty seven manufacturing and other expenses came in at 2,438 crores, increasing around 23% year on year from 1,980 crores in q two FY twenty six, translating to 31.3% of sales vis a vis 29% last year. The expenses were mainly higher due to higher volumes in the normal course of the business, higher SG and A expenses in account of field expansion and license fee payments as part of a settlement agreements.

15:58 R and D at INR $6.18 crores is 7.9% of sales as compared to INR $5.22 crores in Q2 last year. On a H1 basis, R and D was INR $12.26 crores, representing 7.7% of sales. For the full year, as indicated, we expect R and DB to be around 8%. EBITDA, excluding ForEx and other income, was INR $19.57 crores vis a vis $2,001.38 crores in the same period last year with a margin of 25.1%. We service 31.3% last year in the same period. For the full year, as indicated in our earlier interaction, we expect EBITDA margins to be around 24 to 25%. ETR. Turning to the tax rate. ETR in H1 was 28.5%. For the full year, we expect ETR to be around 27% to 28%.

16:47 Going on to the balance sheet, operating working capital stands at INR 7,542 crores as of September 30 against INR 7,132 crores as of March 31. This translates to eighty seven days of working capital against ninety days in the previous quarter. Net cash stood at INR 3,349 crores as against INR 4,636 crores as of March 31, largely due to the closure of our Vishu Pharma acquisition and dividend payout. Whilst we focus on increased cash generation for our business, we'd like to highlight that we continue to explore strategic allocation of our capital to ensure the long term mission in... Of the company, including on the specialty front. On the ESG front, our ESG agenda continues to make strong progress in q two FY twenty seven.

17:33 We achieved zero base to landfill certification across eight manufacturing sites, including seven platinum rating advancement to circular ambitions and, and enabling more responsible management of waste and resources. We also strengthened responsible accounting through sourcing through ESG assessment of 130 suppliers whilst advancing diversity and leadership development. With this, I hand it over to the floor for questions. Thank you very much, sir. We will now begin the q and a session. Requesting all the participants who wish to ask questions to raise their hands on the participant tab on the screen. We will wait for thirty seconds for the queue to assemble. Thank you so much. Thank you for your patience.

19:30 We'll take the first question from Dara Danakra. Hello? Yes. You are. Thank you. Thank you. So my question was on the gross margin front, sir. So as Jolvaptin and Mirabegron being the exclusive products, as they have come off in this quarter, and we are clearly seeing that with the decline in the revenues, the same impact has not been reflected on the gross margin side. So what is the other offsetting factor that explains this? Ramesh, will you take that? Just wanted to clarify that the decline is primarily to Lupin.

20:16 Mira background has been relatively stable. Please go ahead, Ramesh. Yes. Thank you, Vinita. Yes. As Vinita was saying, it is clearly because of that in The Americas, but there is a mixed change in other parts. And moreover, there has been tailwinds in terms of Forex associated with impacted gross margins, and that's the reason why you actually say that the gross margins are more or less, slightly, you know, on the higher side vis a vis the previous quarter. I mean, vis a vis the previous quarter, there's a decline, but it's not stupid. It's not so steep. Sure, sir. Thank you. That's all from my side. Thank you so much for the question. The next question, is from Shashank Krishna Kumar. Hi. Thanks for taking my question.

21:05 We need to just wanted to understand on. Now, typically, the way reimbursement works for some of these five zero five b two products, There could be a few challenges to rest... To getting reimbursement codes assigned and then getting coverage. Do you anticipate any of those challenges post launch in the first few months? Could there be a lag in terms of the product gaining traction and revenue getting recognized? Yeah. I mean, the differentiated products, Pfizer five b twos are obviously, not the same as substitution generics. So it's... It is incremental effort, additional effort on, gaining market access. But our team has been working hard, building the right expertise, and the right relationships, into the channels that we target for the product to be able to gain share on a, you know, on a rapid basis.

22:05 We still expect it to be a buildup, you know, over the months and quarters. We expect to launch the product first quarter of fiscal year twenty eight. And as we gain traction in the channels that we've targeted, we expect the share to build up. Got it. Thank you. That's helpful. And the second one, if you could just comment on the progress that were made with respect to some of our respiratory filings, Respimat, Ellipta platforms, etcetera, where are we in terms of... I think we've guided to close to seven filings this year. So if you would just update on the progress there. Yes. So we have made really good progress on Respimat. Exhibit batches are done, the filing is... This fiscal year Respimat.

22:53 And on the Ellipta franchise, we've had, good progress on the Brio product. So that is expected, to be filed, later this fiscal year. It probably will slip, you know, couple of months into, first quarter next fiscal year. But, the seven to eight products that we targeted with these two plus the MDIs are, remain on track to be filed within this fiscal year or within couple of months of the end of the fiscal year. Got it. Thanks. And just the last one, if I could squeeze in. So r and d spend, obviously, for the current year, we've guided to around 8%. Now what we've seen in case of some of peers is probably some optimization of r and d spend, which also has been happening.

23:41 So probably sometime next year, FY '28, is this also a line item which you could probably look to optimize given where margins might stand at that point? Or given your focus incrementally on complex filings, you expect r and d spend to sort of remain in this range? We we will take a look and have been reviewing the r and d spend to determine what's the best way for us to maximize our opportunities while not compromising on the material products. You know? And as we are investing into commercialization in in a few areas, like specialty in Europe as well as five zero five b two, like epixaban and biosimilars, we are looking to moderate and optimize on the other lines, including r and d.

24:36 Got it. That's very helpful. Thank you, and all the best. Thanks, Susan, for your question. We'll take the next question from. Hi. Good morning and good evening. Vinita, what are your thoughts on FY twenty eight US revenues? Would you be able to match the FY twenty seven number, or will there be some decline? You know, I'd say that revenue should remain at a billion dollars plus, which is kind of a bar for us that we want to be able to maintain, of course, you know, in terms of matching the level of fiscal year twenty seven, I mean, we have some pressures with Tolvaptan coming off, you know, with additional competition.

25:29 And post September next year, we would expect additional competition on mirabegron. Of course, Epexaban, dalbavancin, and biosimilars, in particular, pegfilgrastim, you know, should help us grow. But we hope to be able to be at least at a billion dollars plus. And, you know, as we look out in fiscal year twenty nine and get the full year impact of some of these more durable, you know, pipeline products, we would expect the business to grow. Got it. Do you have a filing of a 10 o'cept in The US, and what's the status? Yeah. We we are, you know, we are in a very good position with etranocept across the across the world. Yeah. With... And I... I'm expecting to file later this fiscal year in The US.

26:27 Okay. What would be the timeline? Would you be in the first wave, and, what would be the timeline for that? Yeah. We expect to be in the first wave in '29. Okay. And, last question, the Europe and other markets revenue seem to be pretty weak this quarter. If I adjust for Visu Pharma, it seems to be even down Y o Y. Why is there any particular reason for that? Actually, Europe was pretty strong double digit even without VisiPharma. The other markets, you know, in particular, Latin America and Brazil, we had additional competition in DAPA that we had tremendous upsides over the last two years. That was primarily the reason for the decline in the emerging market revenues.

27:19 Okay. I'll jump back with you. Thank you. Thanks, Binu. We'll take the next question from Neha Manpuria. Yeah. Thanks for taking my question. Ramesh, on the gross margin number, you know, if I look at the FX, the FX hasn't, you know, increased materially caught on, but I think it's up, like, a a percent and a half odd. So, you know... Or probably, I think, Anita, if you could just give us some color on what's the exit to LUPIN market share that we have just to make sense of the, you know, gross margin number and how we should think about it going forward. And is it fair that we're expecting one more com... Competitor to come through in, Toluaptin in this quarter?

28:06 We, expect, potentially couple of additional competitors can come in. And, you know, we had market share of 50% in the last couple of months, you know, being the sole generic on the marketplace. But with this additional competition, obviously, we will be, you know, giving up some share, but the bigger impact obviously is on pricing. So we would expect the the generic share to continue to grow, and we are certainly continuing to maintain a big percentage of our, you know, channel partners. But we'd expect the, you know, the the margin contribution... Revenue contribution to come down significantly.

28:53 Understood. And therefore, you know, Ramesh, in this context, you know, is FX the only reason why we've been able to offset the Tolvaptan, you know, impact on gross margins? You know, so when I actually spoke about Forex, it is in the context of forwards that I've taken in the first quarter. And so when we actually started, was at, if you recall, around 89, 90. You know, essentially, some of the forwards were around that range. So I actually had a a depressed, you know, the, overall realizations for the first quarter, which is not there in the second quarter. So that's the that's the re... That's what I meant by by tailwinds in the second quarter. Okay. Understood. So as... I think as we go forward, this should probably unwind itself, a little bit as the, you know, INR stabilizes.

29:40 Absolutely. Okay. Understood. And my second quest... Question is on apixaban. You know, Vinita, I know you said that it would... You're... You know, it's too early for us to see as to, you know, what could be the share that we could take, etcetera. But in in your assessment, you know, how easy is it to, you know, launch a five zero five b to to take this share? And when you say incremental effort would be required, would this also mean investment on the ground or, you know, additional investment that we would need to make in the coming quarters before the launch? Yes. We are planning to make additional investments in the next couple of quarters to be able to get the right market access and channel expertise and relationships to be able to, you know, build share in the exclusive window that we have prior to the generics coming in.

30:39 And we would expect to retain some share after the the generics come in, in particular in segments that benefit, you know, from a liquid dosage form. So, yeah, we have built in incremental efforts, you know, on the commercial front to be able to build share. Understood. So to that extent, I... You know, given this is a differentiated dosage, this could be slightly more durable even after generics coming in fiscal twenty nine. Yes. I mean, that's what we're expecting. You know, as we look at the five zero five b twos, the the thought is that you get a longer window in terms of, you know, from a business and margin perspective relative to your exclusive genetics.

31:36 Understood. That's very helpful. Thank you so much. Thanks, Neha. We'll take the next question from Kunal Damisha. Hey. Hi. Can you hear me? Yes. We can. Yeah. Yeah. Thank you for the opportunity. When you come in on the apixaban strategy, would it be focused more on b to b customers, you know, getting the formulary access and then leading to substitution, or would it be more b to c kind of strategy? What are the initial thoughts? It's, more targeted, on, you know, channels where we believe that we can impact, you know, through the efforts that, we make as opposed to a direct, b to c.

32:34 It would be aspirational to get products, and this would have been, a good one if he had, multiple years before the genetics got in to do b to c. Sure. Thank you. And one, for relation on India business, we are suggesting that we'll be growing at around 1.2 to 1.3 times. But, if I look at h one, we are more or less around 1.1 time. Right? So what are the drivers of acceleration here for us in h two? Yeah. So for h one, we're actually 16% ahead of the market, but definitely not where we need to be. I think the, I mean, we've seen in respiratory in particular, very slow growth.

33:21 That's definitely pulling down the average. Cardiac has slowed a little bit as well, but we continue to be well ahead of the market. Diabetes is where we're obviously excelling. We expect SP to pick up. I mean, this, usually, the second half is better for SP, so we expect SP to to pick up now. And, I mean, there's no reason why cardiac should not bounce back as well. Our goal is, you know, 20 to 30% ahead. So we are we are short of that. But, I mean, we've got some new launches. We've got, obviously, the business is doing well. I mean, the entire chronic share is so solid. Obviously, we would expect to build back growth. Sure. In in recipe, the slowdown, is it more on some of the tablets, etcetera, or is it more on the inhaler side that we are witnessing?

34:18 On the inhaler side. I mean, the cough, cold... I mean, you know, everybody's been coughing in India the last few months. So I think those remain strong. We are not... I mean, that's not our fake focus area. Our focus is on the inhalation side, MDI, DPI, and nebulization, and that part has been slower. But, I mean, you you seem to see this alternate years of very solid growth and then lower growth. You know, last year was very solid. The year before that was actually slower. The year before that was very solid again. I mean, there's no sense in this pattern, but I do see it picking up in second half. Sure. Sure. And lastly, on, capital deployment. Right? The... Mean, we have, some room to kind of, you know, lever up to add inorganic, I mean, growth lever.

35:12 So what are your thoughts in terms of capital deployment priorities, beyond capital expenditure? You would like me to take this question, Benita? Yes, please. Yeah. So, clearly, you know, we are a acquisitive company, but, we would obviously be judicious in our choice of, you know, of investments. So based again on the proposition, our first choice, would be specialty in various parts, Europe, America, and equal, importance to, acquisitions in India, but only at, at a cost which is, you know, which is appropriate from our perspective. And and, Bruno, will there be a very active, pipeline that you would be looking at, right now?

35:59 We have entered the of that space, and, clearly, we'd like to grow in that space across the globe. India, of course, based again on the proposition. Yeah. So in in our overall capital, you know, we we we would... We'd keep the threshold limits of price the EBITDA, so to speak. You know? So that would potentially mean about $1,617,000 crores from our, you know, for debt and about $34,000 crores that we have in... On our balance sheet. So we could go up to 20,000 crores, really, but the the proposition should be compelling enough. Sure, Ramesh. Thank you, and all the best. Thank you for your question. The next question is from. Hi. Good evening. See, first question on Zywab.

36:46 I believe your litigation is still on with the innovator while one of the Indian filers has already settled. So my question is, is this an FY twenty nine opportunity for you? And do you expect a sole exclusivity or a shared exclusivity? Well, it's not a f I twenty nine. It's a further route opportunity, Zyway, in particular, and we believe that we we were sole exclusive. We are forced to file. Of course, our brand can always launch an AG or partner with companies that they settle. But those... I mean, we don't have privy... We're not privy to those, you know, arrangements. Got it. Got it. And, Rita, are Dulera and diazepam nasal space still opportunities for next year, and we... Can they be meaningful?

37:36 Yes. I mean, we are expecting diazepam for certain, but, Dulera also, depending on the queries we get from the FDA, hopefully, is an opportunity next year or early the fiscal year twenty nine. Got it. Got it. And just one more clarification on apixaban. I believe you may have a ten month window before the ANDA genetics hit the market. So are you confident of maintaining your... And perhaps even enhancing your FY twenty eight apixaban revenues, you know, in 2930? We we hope so. We'll we'll learn a lot through this launch, you know, because, you know, first, time we have prior to generics coming in is going to be likely the most valuable, but we expect to retain share, especially in the channels where, the liquid dosage form is, brings real real benefit to patients.

38:36 So we hope to have a tail in the in the coming years. Right. Right. Thank you very much. This is very helpful. All the best. Thank you. Thanks,. Before we get into the next question, there's a reminder to request all the participants to raise their hands from the participants tab for more questions, please. We'll take the next question from. Yeah. Good evening. Thank you for taking my question. Just one on... As you prepare to launch these five biosimilars in The US, what are some of the learnings that you're seeing the first wave guys have gone through the challenges? And when you arrive in the markets, what are you trying to do differently to kind of achieve the kind of stated shares that you have probably achieved on the small molecule side.

39:24 Is there something that you need to keep, keep in mind from a philosophy perspective of how we approach biosimilars in The US? Yeah. I mean, our learning so far and, you know, obviously, we have a lot more learning to do once we get into the market with these products. I mean, our first one, has launched through our partner, Valorum. So, certainly looking forward to, learning from that experience as well. But as we have seen, companies, you know, in the market over the last couple of years, I mean, it's pretty clear that the... You know, what what tactics and strategies succeed on the biosimilars front are very different from small molecule. I mean, it's...

40:15 The erosion on the pricing standpoint, discounting by manufacturers really doesn't help much on the biosimilars front relative to, you know, our small molecule genetics. And, you know, one really needs to very carefully look at the incentives to the payers on the biosimilars front that really drives substitution of biosimilars. But, I mean, you know, we are very pleased that we are going to ramp up these products over the next few years at a time when there's significant openness, you know, relative to five, eight years ago. Biosimilars was still nascent. Today, there is a pretty active and, you know, adoption of biosimilars in the marketplace.

41:11 And a lot of learnings of companies that have exited products as well as come back into the market with different strategies that, you know, really inform how how we launch the products that, we plan to launch over the next few years. Got it. Helpful. And just a second question on your US guidance. So we have done one half at $683,000,000. Right? So even if I take the midpoint of your full year guidance, 1.1 to 1,200,000,000, we are talking about, like, a quarterly run rate of $230,000,000 per quarter. Right? And maybe quarters could vary. But is that the kind of, like, 100,000,000 loss that we envisage? Or you think q two probably has come in far better than what you thought? So if... And the reason to just hold on to that guidance, maybe is there upside risk is the question I'm asking.

42:04 Your q two was above our plan. Q one also was above our plan. And therefore, we will maintain our guidance, and we'll we'll see if we get any upsides to it. Got it. Last question on the India business. I think prescription prescription business was called out at 14% with 6% volume growth. Chronic business growing faster. So if you could help us disaggregate how the chronic business volume growth has been happening as well. And if I were to kind of just keep overall antidiabetes out, I'm just saying since it's a category, especially semaglutide, it started this year. So I just want to see x of that, if you could give us some qualitative color on the growth, please. Thank you.

42:52 I have the value. I don't have the volume. I mean, the volume growth like you like you said. You know, h one is 19 and a half percent. Q two is 17.4%. The volume, overall, Matt, is 8.6%, and h one was 6.1% volume growth. I would presume that most of it would be from chronic only. And the semaglutide number is is not very large. We're the third largest generic, but the semaglutide number is not very large in that volume. So I would presume that the volume would be very close to that. But if you want a more specific answer, we can get it to you. No problem. Thank you, and all the best. Thanks, Sham. We'll take a pause for thirty seconds for the queue queue to assemble. Thank you so much.

44:12 Thanks for the patience. We'll take the next question from Rashmi Shetty. Yeah. Thanks for the opportunity. Vinita, what is the addressable market size of, epixaban oral suspension? I mean, the the overall, brand is, 10 plus billion dollars. Right? And, we have certain channels that we have targeted that, are a good percentage of, of the market. Got it. And is it fair to understand that, you know, the EBITDA margin won't be similar to the substitutable generics exclusivity? You know, the EBITDA margin, I would say, should be fairly attractive. We're expecting, you know, margin like exclusive product, but with with some investment on the commercial front.

45:11 Got it. And for the full year, you know, as you've given the guidance of 1.1, 1,200,000,000 for The US market, for f y twenty eight, when you're saying that, you you would be able to maintain at least, you know, $1,000,000 plus, that includes your epic seven estimates? Yes. Okay. Thank you. That's it from my side. Thanks, Rashmi. We'll take the next question from. Thanks for the opportunity. Ma'am, if you could share your thoughts and further development work in the peptide segment apart from whatever we have launched for the regulated markets, specifically US.

46:01 Yeah. So on the peptide front, the products that we have launched so far are glucagon and liraglutide. And, you know, as we look at the next couple of years, I mean, glucagon and, you know, liraglutide will will continue to be the material products. You know, we don't expect to get in... You know, products like semaglutide and others, newer peptides, the GLP ones, into the market anytime soon just given the patent expiry is, you know, beyond the five year time frame for those products. But in the near term, I mean, the injectable products that are turning out to be really attractive for us, Risperdalconstad is one of them, Sagamadex that we just launched, you know, is a is a nice opportunity for us.

47:02 And dalbavencent, both the Pfizer five p two as well as generic opportunities are, nice opportunities for us. And then, you know, broadly, I mean, we look at, biosimilars also injectables. We see larger opportunity on the biosimilars front, even compared to injectables, in the next three to five years. Got it, ma'am. And similarly on the iron chloride side? Yeah. Yeah. We'll... We expect some niche product launches on the ion colloid side as well. If you could share without getting into product specific details, let's say, just will monitor then the timeline to launch.

47:50 Maybe we'll get back to you. Yeah. Ravi's team will get back to you with additional details there. Sure. Thanks. Thanks. That's it from me. Thanks, Sushar. We'll take the next question from. Hi. Thank you for the opportunity. My first question is on the company level EBITDA margin. Margin. So since we have mentioned about couple of pipeline products and a Pixaban launch would be there in f y twenty eight, whose margins would also be be like an exclusive product margin. So my question is, do we see a a company level EBITDA margin going back to 29, 3030% in a span of, like, five years with so many products in pipeline?

48:46 I'll take this question. Yeah. If you were to take, 2930, clearly, we would get to those levels. There's, of course, the investments coming up on a host of things. And, you know, given the fact that, some of those areas that we're getting into have much very good realizations, the five zero five b twos, you know, the biosimilars portfolio, the specialty, products across the globe, including USC and all of that, really scaling up, we could get to those levels. So secular growth is kind of expected over, over several quarters whilst, the, you know, the, '28 period could potentially be a period of consolidation, so to speak. Sure. And, also, on The US run rate, if you could highlight something, like, in f y twenty nine...

49:33 I understand in f y twenty eight, we have APEC seven. But in f y twenty nine, with the help of specialty and complex injectables and respiratory readout, so would it be fair to assume that we will maintain a $1,000,000,000 run rate? Yes. Okay. And, my last question is on the India market. So I read in the presentation that, on the chronic side, we will max out at 70%, and we have already achieved 66% of our chronic contribution. So assuming that we will achieve 70% target in near term, So we will not go beyond 70% on the chronic side. Is that a fair understanding?

50:25 I I would love to prove you wrong. I mean, our plans are adding up to that 70 odd percent. That doesn't mean that we're gonna stop there. Right? I mean, we are a chronic story, so that's where the growth will come from. And, you know, consistently, the growth on that side has been, higher. There are acute or semi acute parts of, our India business as well, so those will grow as well. But the focus remains are chronic, and therefore, theoretically, that chronic share will keep growing. Sure. That's helpful. Thank you. Those were my questions. Thank you, Forum. We'll take the next question from Alankar Garude. Hi. Thank you for the opportunity. First question, Vinita, are you evaluating the possibility of a partner for a PIX7?

51:14 We looked at all opportunities and options and believe we have a really strong commercial strategy here. And on the manufacturing front, given this product is filed from Somerset, do you think there is enough capacity available to drive the best outcome in FY '28? Yes. Actually, our team has worked very hard on it, you know, global, operations and supply chain team as well as Somerset team to ensure that, we can meet our upside scenario. Got it. And the second question, Ramesh, sir, on the cost side, are there any levers available, maybe some discretionary spends which you might have incurred over the past couple of years, could reverse as Tolvaptan contribution comes down further?

52:07 So, if you're talking about specifically, the expenditure increase, this is essentially because of you know, the settlement on a kind of middle background, which is also included in there. That would reverse out. The second is we are also investing out of the curve in terms of IT, a number of platforms, plus, of course, AI spends and the like. And we would expect a lot of outcomes to come in from there. And, clearly, you know, these are, you know, this investment phase, and that would play out over the next few quarters. So, if you were to take a period of time, say, four years, you would expect the IT spends to be low... You know, would increase, but, as a percentage of sales to be much lower. And, of course, the outcomes from those are visible across various other lines.

52:54 Understood. So, basically, these are more about productivity gains rather than any discretionary spends coming down or maybe staying flat on an absolute basis? Well, discretionary spends, you know, so you say, essentially, better ways of, you know, looking at... There are ways of looking at productivity. You know? So, clearly, you know, with the advent of technology and the like, a number of things would be made possible. Got it. And that's it from my side. Thank you. Thank you, Alankar. Since we have time for one last question, may I... We request participants to raise their hands from the participant tab. We'll take a pause for fifteen seconds. Thank you. Thank you very much for the patience. Since we don't see any raised hands, we've...

53:57 I'll now hand over the conference over to the management for their closing comments. Over to you, ma'am. Thank you. Well, thank you, friends, for all your questions. And, hopefully, we were able to give you all the all the, you know, answers. And, otherwise, our team will be in touch with any any additional clarifications that you need. As you can see and and hopefully what you heard, we remain confident in growing our business in a more sustainable manner going forward. The investments that we are looking at, in areas like specialty, in particular for Europe, as well as biosimilars as... And Pfizer five b twos give us the confidence that, we should be able to evolve our developed market business, on more durable, more sustainable portfolio going forward, you know, as opposed to the one off exclusives.

55:00 And, our consistent performance and increased investment in, India continues to be a very strong anchor for our growth, going forward. So we remain, very excited about our prospects over the next five years and, look at the next year as a year of, investment and, building capabilities to build a more resilient business, going forward. Thank you again for your time today, and we look forward to connecting with you soon. Thank you, ma'am, and thank you to all the participants. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us, and you may now exit the webinar. Thank you.