Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenue grew by 5% to INR 1,562 crore.
- EBITDA increased by 14% to INR 239 crore, representing 15% of sales.
- Net profit rose by 12% to INR 135 crore.
- India branded business grew by 9% to INR 572 crore, with strong performance in specialty therapies.
- US business grew by 18%, with two new product launches and ten more expected in the upcoming quarter.
Negative Points
- Gross borrowing increased to INR 589 crore from INR 430 crore in March '24.
- API business underperformed, declining by 15% to INR 260 crore.
- Excessive heatwaves in Q1 negatively impacted specific geographies.
- US market faces double-digit pricing pressure.
- Constraints in supply affected ROW sales, with expectations of improvement in subsequent quarters.
Q & A Highlights
Q: Could you provide some guidance on the expected run rate for the US business in FY25?
A: We expect to grow the US business by about 10% to 15% this year. The last quarter was quite good with 18% growth, but it had some lumpiness which won't be recurring. We plan to launch about 10 products this quarter.
Q: What is the timeline for the Selexipag product launch?
A: Selexipag is still some time off. We have exclusivity, but the launch isn't expected until FY26 or '27.
Q: How are supplies picking up from the new plants, especially non-oral solid plants?
A: Growth is still largely from the OSD, but the new plants have been quite successful. By the end of the year, we expect more products from these plants, including ophthalmics and oncology.
Q: Can you comment on the US pricing environment?
A: There is still double-digit pricing pressure in the market. It's product-specific, but overall, we are seeing significant price erosion.
Q: What are your expectations for the ROW sales growth, given the supply constraints?
A: We faced constraints in supplies, but we are addressing it by ramping up our new formulation facility and debottlenecking existing ones. We expect ROW sales to improve in the next quarter or two.
Q: What is the outlook for R&D expenses and margins?
A: R&D expenses are expected to be around INR 550 crore for the year. We aim to improve EBITDA margins to 18%-20% over the next 2-3 years as new facilities get better utilized.
Q: What is the status of the lenalidomide launch plan?
A: We are still a couple of years away from launching lenalidomide. It won't be a sizable opportunity for us as we will be late to the market.
Q: How is the animal health business performing, and what is its future outlook?
A: The animal health business continues to perform well with a 23% growth this quarter. We expect this momentum to continue, driven by new launches and operational execution.
Q: What is the current sales force count and PCPM in India?
A: The current sales force count is 5,500-plus, and the PCPM (per capita per month) is INR 3.8 lakh.
Q: What are the launch timelines and settlement terms for Entresto?
A: We have settled with Novartis and are awaiting the outcome of other ongoing litigations. If someone else launches, we may get an opportunity to launch based on our settlement terms.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
