Hello, am I audible?

Good afternoon, everyone. I am Umesh Laddha from Nirmal Bang Institutional Equities.

It gives me immense pleasure to hold 3Q FY '26 Indoco Remedies Limited concall. From the management, we have Ms.

Aditi Panandikar, Managing Director; Mr. Sundeep Bambolkar, Joint MD; and Mr.

Pramod Ghorpade, CFO. Now, I pass it over to the management for their opening remarks.

Thank you, Umesh. Good afternoon, everyone.

Thank you for joining this call today. Let me draw your attention to the fact that on this call, our discussion will include certain forward-looking statements, which are projections or estimates about our future events.

These estimates reflect the management's current expectation of the future performance of the company. Please note that these estimates involve several risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied.

Indoco does not undertake any obligation to publicly update any forward-looking statement, whether as a result of new confirmation, future events, or otherwise. Now, I will request our Managing Director, Ms.

Aditi Panandikar, for her opening comments. Over to you, madam.

Thank you, Pramod. Good afternoon, everybody, and thank you for logging in into our Q3 FY '26 earnings call.

Happy to share that Q3 Indoco has delivered a better performance, especially when it comes to our exports division, as well as our APIs. I'm also happy to see the subsidiaries like FPP in US and Warren Remedies, which is involved largely in the OTC business, do better.

For this quarter, there are certain highlights I would like to talk about. In our OTC business in India, we have, as a strategy of application extension and brand extension, launched two products: Sensodent DSP and Sensodent DPC.

One is a daily sensitivity protection toothpaste and is an addition to our sensitivity product basket, and the other is a daily pro-care toothpaste, which is actually our entry into clean toothpaste segment in the OTC area. In the domestic business, this month this quarter, our domestic business has been a bit flat.

This is largely because of our acute therapies, which has which have shown challenges. However, this is largely due to the unpredictable nature of acute in the primary sales.

However, happy to share that secondary sales, as well as prescription response, is all intact. In fact, we are happy to share that on a MAT basis in IQVIA, we have jumped one rank and are now ranked 21st in the prescription audit, with a total of 11.

10.86 crore prescriptions, and we have jumped over Pfizer, and that is a matter of great pride for us. We have also fairly succeeded with our new introductions in India, and the total new introductions to sales is now at 6.5% of India revenues.

Happy to share that Patalganga site of APIs has also received the EIR for US FDA audit, where we had zero 483s. I'm also happy to note performance in emerging markets, where not only have we done well in the sales primary sales from Indoco, but I'm particularly happy to see the growth in secondaries on the ground.

Also glad to share that Indoco has received the Most Preferred Workplace Award for '25-'26 by Marksmen Daily at Mumbai. These are some of the highlights from my side.

I now hand over to Pramod to share the financial highlights with you.

Thank you, madam. I'll share some financial highlights for this quarter.

Standalone net revenues of the company for the third quarter financial year 20 25-26 are at ₹3,896 million compared to ₹3,649 million for the same quarter last year and ₹4,293 million for the immediately preceding quarter, that is Q2 financial year 25-26, at 6.8% and -9% growth, respectively. Consolidated net revenues of the company for the third quarter financial year 20 25-26 are at ₹4,343 million compared to 4,025 million for the same quarter last year and 4,718 million for the immediately preceding quarter, that is Q2 financial year '26, at 7.9% positive and 7.9% negative, respectively.

Standalone EBITDA to net sales for the quarter is at 6.6% at ₹259 million compared to 5.5% at 201 million same quarter last year. For the immediately preceding quarter, Q2 financial year 25-26, EBITDA was 12.4% at ₹534 million.

Consolidated EBITDA to sales for the quarter is 7.3% at ₹315 million compared to 3% at 120 million same quarter last year. For the immediately preceding quarter, Q2, EBITDA was 9.2% at 431 million.

Domestic formulation business: revenues from the domestic formulation business for the quarter are ₹200 1 2,142 million as compared to ₹2,241 million same quarter last year. Major therapeutic segments like vitamins, antidiabetics, anti-infectives, and respiratory performed well during the quarter as compared to the same quarter last year.

On the international business front, revenues from international formulation business grew by 26.2% at ₹1,356 million compared to ₹1,074 million same quarter last year. Revenues from regulated market for the quarter grew by 25.9% at 861 million as against ₹684 million same quarter last year.

Revenues from US business for the quarter grew by 21.6% at 341 million as compared to 280 million same quarter last year. Revenues from Europe for the quarter grew by 36.9% at ₹485 million as against ₹354 million same quarter last year.

Revenues from SAARC market for the quarter are ₹35 million as against 49 million same quarter last year. Revenues from emerging markets for the quarter grew by 26.8% at ₹495 million as against 390 million same quarter last year.

Revenues from API business for the quarter grew by 24% at 344 million as compared to ₹278 million same quarter last year. Revenues from AnaCipher CRO and Indoco Analytical Solutions for the quarter are ₹54 million as against 56 million same quarter last year.

That's all about the financial highlights for the third quarter. I now request participants to put forward their questions.

Thank you.

Yes. Hi, ma'am.

Good afternoon.

Hi.

Ma'am, first on Europe. Last quarter, we had some issues and there are some approval challenges which kind of got resolved, and we were expecting some growth to come in, but that actually gone down.

Any updates, if any, on Europe specifically?

Yeah. We had said that there are some approvals coming in.

Had to say that between customer and us, there has been some delays. Some of that has got pushed forward by one quarter.

That's it.

Means so are they in place now or still [a distant?] time to go?

Almost. 90% work done.

It has not happened in the first month of this quarter, but expecting it to turn now, we should at least get 1, 1 and 1/2 months of manufacture.

Okay. Correct.

Correct. Ma'am, second, on other expense.

Again, our expectation was to kind of curtail it at 150, 160 crores at a consol level. For the last three, four quarters, you've been doing 170.

Anything we can do to control that?

I think this quarter, we have controlled at a consolidated level, no, Pramod? 150 169.

169. Pramod.

Yeah. That include certain one-time cost, nonrecurring cost, which we expect not to repeat.

There are certain remediation costs which was spending, then there was a cost associated to certain penalties.

Because of the site being under remediation, there are certain products we've not been able to supply. There are some penalties against orders which were confirmed.

There are many such things, but otherwise, we are confident to keep it at 150 on a consolidated.

Can we quantify this nonrecurring one-time for the quarter?

Close to about 8

and 1/2. Around 8 to 9, yeah, crore.

Accha. Correct.

Anything on FDA for our Goa plant 2?

Waiting. We are waiting.

Correct. Fair enough.

Thank you, ma'am. All the best.

Yeah.

Ma'am, any reason in this quarter, FPP became a usually profitable business for us during the quarter?

As we acquired FPP in June of '23, and we started with a very small portfolio, which they had largely involving traded products. Over the last couple of years, we have built the portfolio through our products, which we supply through FPP.

Of course, the basket has both solid orals as well as sterile. We are having certain challenges with sterile products supplied to FPP, but our solids have started doing really very well.

In addition to sterile, which are being supplied from site that is plant 2, which is not very significant, but I did mention last time we have started sourcing from other sites also. That is better.

We are also doing much better on the traded business at FPP, and the solids that are being supplied to FPP from Indoco has also increased. Net-net, we have also got some good orders in the front end.

This has helped FPP do much better, and I'm confident going forward it will do better for us. Ma'am,

would like to know about our new introduction portfolios across our India business. When should we feel our growth going above the market, IPM market,

for next couple of years? IPM, yeah, thank you.

Thank you for that question. As we have got a portfolio which is pretty much acute skewed.

Although at a doctor level we say it is sub-chronic because we do get support from the mass specialty, we are still not with many of the super specialty doctors. At for the India business at Indoco, our strategy has been very clear: to go from acute to sub-chronic, to go from GPs to mass specialty, and to move from because Indoco is a company which gets more than 60% of its revenues from tier 3 down, tier 2 down.

We are we have taken several measures strategically to improve performance in the metros. As all of these building, you will see us doing better than the IPM.

However, having said that, if you have been studying the IPM carefully, you will see that this year the acute has been under a lot of stress, and for this quarter, current quarter, there has been some upside on respiratory, but otherwise acute has been under a lot of stress, and what has really grown is cardio and diabeto. Compared to the covered market, we are not lagging too much.

In fact, on a MAT basis for December, we are at par or better than our covered market. It is only when you compare with IPM, because then you have to look at the anti-obesity products and the all the other things that are going on.

Your question about when can we beat market estimates, like I just told you, for India, our strategies revolve around generation of more prescriptions from the doctors, and here we are very confident we are on right track. I'm I feel sure that going forward we will able to do IPM levels or better.

The market is growing due to cardiac and diabetes, but we have very less share if we compare. We have seen degrowth over last 3 years in that segment only.

Any particular reason we are not focusing or are we

Cardio-diabeto is a very tough segment and already has lot of competition. At Indoco, we focus more on those therapies which allow us to have a higher prescriber base than a lot of prescription per doctor, which is what a super specialty does.

However, we are increasingly focused on consultant physicians, increasingly focused on pediatricians, gynecologists. In fact, our gynae business has grown by almost 15% this year on a YoY basis.

Synergy, which is a division which is having an agenda towards metrocentricity and carries one of our big products, Karvol Plus, on a QoQ basis also has grown by 26.8%. These are some healthy signs.

We do have some very good products in diabetology, but not the latest molecules. We have Glychek, Glychek-M, and that is reasonably doing well, but we continue to focus more on the mass specialty.

Understood. Understood.

Ma'am, we have seen the API being ramp-up as over last few quarters. Going forward, as we ramp up the intended block 2, should we expect increase in gross profit margins across boards, as we have seen over last 3 quarters from 68% to 73% on consol?

Yeah. Were you saying something more?

No, no.

Okay. Our largest site for APIs is the Patalganga site from where the finished APIs largely come out.

We also have a small kilo manufacturing site where the top line is not very significant. We do manufacture some of our starting material at a very old site which supports the Patalganga site.

In addition to that, the site at AURIC, which is under the WRPL, Warren Remedies, has also started making KSMs and starting material for our API products, which is then consumed at Patalganga. This has helped us free more capacity at Patalganga for finished API, and that is what is showing here.

Going forward also, we plan to continue to do this. In addition to freeing capacity at Patalganga for finished APIs, I feel very confident that the finished API block at AURIC site in Aurangabad, which is part of the Warren Remedies group, which is now ready and is taking validation batches of products, as soon as US FDA comes down and qualifies it or EU comes down and qualifies it, we will be able to sell in those markets, and then we should see further improvement in margin.

As such, we manage our API business very well. As the API sales that you see is what we sell outside.

In addition to that, about 40% additional to this is supplied internally to in-house formulations at Indoco.

Understood. Ma'am, going forward, should we expect API business also to touch the 200 crore run rate yearly?

Of course, it is.

It is

at 200 crore if you consider what is internally transferred.

Understood. No, I was talking from the outside point of view as we are ramping up from 20 25 crores

phase

to 40, 45 crores.

Yeah. Next year, I'm very confident.

As I told you, this year, the AURIC site will concentrate more on validations, and we will be restricted to what we can make at Patalganga. I'm sure that in another 8 to 10 months, we will start getting high revenues from AURIC site also, and then we can really ramp up our API business.

Ma'am, should we expect some blockbuster drug launch approvals for us as we have got few in the past, and they are near expiring,

one

such as Apixaban where we are first to file along with 2, 3 others? Yeah.

There are several coming up for patent expiry or where we have settled with innovators, and they're all in FPP's portfolio for the next year. We keep our fingers crossed and stay very positive for these to help us ramp up FPP sales in the next year.

Understood. Thanks a lot.

No questions. All the best.

Thanks for the opportunity. Ma'am, if you can tell us how much were the European sales for the 9 months and what is your anticipation for the full year FY '26?

Yeah. Europe for 9 months on for Q3, Europe has done around 49 crore, and I think 171 we have done, no, as of now?

167.

167 we have done on YTD basis.

How much was it last year?

170.

Yeah. Equivalent it was.

However, last year, if you remember well, we had major challenges due to the MMP exhibition, because of which the fourth quarter for Europe was extremely good. This year, in fact, like I mentioned earlier, many of the issues with phase 2 of MMP, wherein we have got approvals from our customers to now manufacture at the higher batches and in the new sites are all coming in.

We expect the fourth quarter to be much better for Europe. Net-net, I would not like to give you a number at this stage, but let us surprise you in a pleasant way.

Sure. Sir and ma'am, for the coming few years, we were pretty bullish on the European business and expected this to scale to a significant number.

For coming quarter, FY '27, if you can let us know how much scale do we expect in the European business?

These are the businesses which are built on generics. In addition to the base business, which is set to grow at double digit, I'm very confident the new products which will also come in and which have much better market opportunity as well as margin and will be made in the plants which have been now optimized.

I'm not just looking at top-line growth, but we should look at Europe over the next few years as growing at 20% plus in revenues, but more importantly, we should be watching the margins to improve on that business.

Sure. Let's say, do we aspire to reach 400, 500 crore of revenue in Europe, let's say, if not next year, I think it will be challenging, but FY '28 or '29, should we be looking

Yes, yes, you can expect that. We can.

Okay. Okay.

'28 to '29.

Yeah.

Okay. On the Warren Remedies, if you can guide us how has been the performance for the quarter and 9 months and next year, how do you see the performance, especially on the profitability and break-even levels?

Yeah. Warren Remedies has grown by more than 43% this quarter, and I think for YTD basis, it is in 30s.

38%. This is largely due to the success we are seeing with our brands in the OTC and OTx segments.

If you recall, we had products like Sensodent-K, KF, which made a switch from pure Rx to OTx first and then to OTC. Thereafter, we have products like Kidodent, which are doing exceedingly well in the OTx segment.

As I mentioned, this quarter, we also Q3, that is, we launched two new products directly into OTC, one to add further into our sensitivity basket, and the other to actually provide a superior toothpaste, which is made in-house in our R&D and which which can now feature in frank OTC in the general toothpaste market of high-end products. Looking at all this and the new launches that we have planned in the coming months, I feel very confident that the toothpaste business and the oral care business in Warren Remedies will go from strength to strength.

Coming to the API business, as I mentioned earlier, this year will be a year of as in the 20 26-27 will be a year of consolidation for, although there will be a lot of validations of products at this site, which of course Indoco's formulation team will trigger for international audits. We may not be able to supply to the reg markets too much this year.

We are proposing or forecasting a muted top line for API in Warren Remedies, but I feel very confident for the subsidiary to do well overall.

Sure, but should we expect a break-even next year at EBITDA level or given the API performance, it will be difficult?

There are two challenges to making even. One, of course, is the investments in API and the OPEX and RMPM costs of the validation batches taken for API.

We should not forget that to expect a break-even on an OTC business in the second year is very tough because we have now really started ramping up our spend on advertising. Which is why I said when it comes to European business, stay bullish on the margin.

I would say when it comes to Warren Remedies, let them breathe and grow sales.

Sure. Okay.

Thank you, and wish you all the best.

Hi, ma'am. Thank you for the opportunity.

Just wanted to understand, we have seen a gross margin improvement of around 300 bps sequentially. What has driven this growth, and how much sustainable is this going ahead?

Yeah. You must have seen that both our subsidiaries have started doing better.

These were both fledgling businesses earlier and were giving a drain on the business. That has improved.

In addition to which, COGS at even IRM level have improved. This shows a much better shift in the portfolio, much better shift in the quality of business that we are getting.

Growth in prescriptions, jumping a rank in the prescription audit, all indicate that if the demand part of the business is better managed, it's not always about top line. It's also of the quality of business, and I think all of this is resulting in much better control and giving us a much better margin.

Okay. Thank you.

Ma'am, you were just mentioning to a participant. What are we expecting from the FPP portfolio in FY '27, and how many product approvals are we expecting or maybe filing, some indication or understanding about FPP for FY '27, '28 would be helpful, ma'am.

Okay, '27, '28, so that's a bit far. We have right now visibility for '26-'27 where there is expectation that at least five new products should be launched out of our own portfolio.

They will come at various times in the year, it will be difficult to quantify that, but they are extremely exciting. You must have heard of the lacosamide oral suspension, which got approved recently.

We also have a couple of other products where we have an opportunity to be early and have received the player approval to ship product. That is likely to also help us.

I would be a little cautious because the moment I say something to you guys, you expect the next month to do well. US business is not like this.

There is transfer of product first, then there are orders in the market, then you sell them, and you know very well what happens in US for the collection. We are building a very strong business, and I'm very happy to say that.

Okay. Any therapies where you would be able to guide these five new products which you are expecting in FY '27, which therapies are these, or any addressable market size for these?

Yeah.

No, market size, I will not comment, but therapies, I'll tell you broadly. We have always stuck to two or three therapies for our international market, specially US.

We participate in cardiology, diabetology, and CNS, definitely. Because of allopurinol, which is such a big product in our basket, we also look at that therapy, and anti-gout, that is.

In addition to which, of course, the ophthalmic product basket is great for us. Then in the traded products at FPP, we have got some interesting products even in the onco segment.

Okay. Fair enough.

Thank you so much.

Ma'am, on the two lines that we were allowed to restart in Goa for the US sterile, does it contribute anything meaningfully or everything from there comes in after the whole plant gets approved?

Nothing meaningful yet. I'll be very honest.

In fact, we have started getting small amounts of sales from sterile, but it's still largely from outsourced. We have begun.

Right. Until the audit happens, can this become meaningful?

The two lines that we're allowed to do?

Yes, we have seen some upside in the present quarter. I'm hoping we'll be able to keep that run rate.

If that happens, Q4 you will see some meaningful contribution.

Correct. We did some sale and leaseback again this quarter.

Can we quantify what that amount was?

No, this was in the last quarter.

Last quarter. The loss came this quarter, in the exceptional items

No, there is a lease payment towards that, but the transaction happened in the last quarter, in the month of August.

What is the exceptional item you're talking about?

This loss amounting to 2 crores on sale and leaseback of its noncurrent assets.

You see it? Might be a small item.

Note

7B. Note 7B.

We'll look at it. Meanwhile, let us check what you're saying.

Fair enough. No, second question was just on that.

Did we do it again?

Yeah. See, there is one exceptional item apart from that is about the provisions

for the

new labor code.

No, that's 7C. That's about 7 crores.

I'm talking

7B, which is 2 crore loss on sale and leaseback.

Yeah. Basically, those are old transactions, not the recent.

Not the recent one. We had done these earlier also.

About 15, 16 years back, that is the transaction which is settled in this particular quarter.

Accha. Fair enough.

Okay. Thank you.

Hi, good afternoon, everyone. Ma'am, my first question is on India formulation business.

I think last few quarters on the acute side have been in a way slightly challenging, and we have been stuck in that range despite new product introductions, etcetera, etcetera. How should we look at this business from a slightly let's say 2-year perspective because the acute nature of the business and product mix is not going to change, right?

So

It's not going to change drastically, but yes, we are building more and more of the sub-chronic portfolio. We are also focusing on getting acute from mass specialists whose practice is not very seasonal.

Typically, if you go get anti-infectives from a general practitioner, it is much dependent on the footfall. If you get an anti-infective from a pediatrician, that is not the thing.

This year, somehow on anti-infectives across the board, also because of the AMR resistance issues and all those things, and we have just had an SMSRC presentation a few days back. Post-COVID, somehow the acute has not settled.

We don't know what is happening. Of late, there is indications that things are back on a very kind of a path where you can ignore the COVID, pre-COVID, post-COVID years, and now again things are beginning to settle.

I'm hoping that will bring back some predictability. This year, for example, the summer never really came.

The rain was prolonged, and winter is expected to be severe. Let us see.

We see it when we compare our prescription growth, we get an exact pulse of the secondary demand. I'll just give you an example.

Our product Cyclopam last year, which grew by 20% at primary, prescriptions had grown by 16%. Now this year, it is 15% down in primary, but prescriptions continue to grow.

Prescriptions for us are a real indication of the real consumption, and that is not slowing down. Sometimes market sentiments, buying behavior, boys in the field cause these kind of blips in primary push or hold back, and that is what results in quarter-to-quarter kind of a change.

I feel going forward, we must discuss India business more on a YTD or a MAT basis. That is far more healthy.

Okay. Again, kind of putting it down more succinctly.

Is it fair or realistic to assume that given whatever portfolio that we have and the seasonality of the nature of the acute business, is it fair that we can grow this business at 15% plus, let's say, over a longer horizon, maybe 2, 3 years? Is that a fair assumption, or is that too much to ask given the maturity of our products?

Given that new introductions are 6% of our top line, while the mature products will continue to dominate in the shorter run, soon the new introductions will start playing up and making their presence felt. I do feel confident for a double digit.

I'm not so confident about the 15%, but even when it comes to our legacy products, there is a lot of leverage we can achieve through reach. There are many geographies where we are skewed.

There is a lot to do. It is just not as easy in India to translate, but we are working very hard on it.

I'm hoping some of this will show results, and we'll be able to surprise you. Got it, ma'am.

Very helpful. Ma'am, on the US side, I think you said that we have a very good product slate for next year, given the filings that we have done and approvals that are in the pipeline.

How should we look at, let's say, from the resolution of the US FDA issue till the commercialization steps, the timeline, whether capitalize on those opportunities, and for that to happen, around what timeline the US FDA has to get resolved for us to capitalize on the opportunity? Okay.

Thank you for that question because it is also allows me to explain. Today, we have two sites for formulations which make products for US: one is Goa plant 1, and the other is Goa plant 2.

The site which is under US FDA cloud for warning letter is only Goa plant 2. Goa plant 1, in fact, is our solid oral site, and many of the new launches are from the solid oral site as well.

In addition, in order to support the challenges we might have to supply product from Goa 2, we have beefed up supply at second sources. I expect that while we may not get full advantage if US FDA coming down gets delayed, unlike historically when business came to a complete halt, this time that will not happen.

In that manner, US FDA coming down and US revenues at FPP going up may not be directly linked. I hope that answers your question.

Yeah. Very clear, ma'am.

I think last question. I think US also was 300 crore plus for us at some point in time, and same was for Europe.

How do we see the trajectory of us going back to those kind of numbers in both these market? What are the things which have to fall in place, where you think are more confident or have more visibility?

Some qualitative thoughts on that would be very helpful,

ma'am. I love it when you people ask qualitative questions.

Thank you for that. There is definite visibility on us getting back there.

Just to quickly go back on your 300, 300 crore kind of numbers. The last time we did 300 crore in US, almost 30 to 40 crore would have been revenues for milestone payments collected from Teva or some kind of upfront coverage of R&D costs.

This time around, when we do these sales, they're almost all coming from commercial sales, you have to remember that. Number two, qualitatively, why we feel we should do it, as I told you, the Goa 1 site, which supplies both to Europe and US, but currently is making allopurinol and glimepiride, just two products for US, but is waiting for all those product approvals and all those products on player to be transferred, that gives me confidence that going forward, plant 1 will start contributing for solid orals for US.

Plant 2, while we continue to struggle with US FDA coming down and clearing us and restarting business in time, there is a lot of demand for the products that have been filed from plant 2 and already are in the market. Having said that, yes, there is going to be challenge because competitors have had a field day when we could not supply.

We will be working very hard, and especially since we will have feet on ground with FPP, I feel confident we will be able to get there soon. Qualitatively, the margins on this business is what I would focus more on, as we have spent considerable amount of time, energy, and money to bring all our plants to a level that when we get these numbers next, we should be doing far better in margin than when we were doing it earlier.

I hope this answers your question.

Ma'am, on Europe?

Yeah. Europe, as I said, we had our major buyer who also started with us incidentally in 2003, to whom we supply paracetamol for UK and some of the other products.

They continue to keep one of their livery or label with a small site of ours, which has a lot of pending orders, but we can't deliver. We are trying to transfer it to the site which has undergone MMP and we can take much larger batches.

We feel very confident this quarter all of that should end. Next year, we'll be able to start with a clean slate and have no constraints in supply.

Europe number being down is also a function of us not being able to supply that product.

Okay. Just one more question if that's fine.

Is that okay?

I'm okay. Unless somebody's waiting.

Okay. I think we used to do that 18% kind of a margin, and from whatever that you are saying qualitatively, the US business will have far higher margins.

The domestic business anyway are good-margin businesses, the growth will come back there. Europe also, you said the margins should improve.

There is a visibility of going back to 18%, 19% kind of a margin, give aside the timeline. Is that a fair assumption?

Of course, it is. Why would we work otherwise?

I'll just correct you on that 19%, 20%. 19%, 20% we did in a COVID year when we had no expenses on India.

Otherwise, we were having a fairly good run rate of 16%, 17%, sometimes 18%. I feel in the next couple of years, we would be stabilizing at around 13%, 14%, and a couple of years after that, we should be able to pitch for much better margins.

Got it. Very clear.

Thank you, and wish you all the best.

Hello.

Yeah.

Ma'am. Hi.

I think a lot of questions have been answered. Just in terms of the balance sheet, ma'am, where are we right now, and are we at peak debt?

What is the thought process of coming down from here?

Our total debt right now sits at around 900 crore: 700 in the main business and 220 in WRPL. We have been paying back as and when things get due, and we feel pretty confident to be able to do that.

Yes, of course, we would explore any and every possibility we can to reduce or lower the debt. On one part, we are very careful about no further capital expenditure.

We are controlling OPEX. I think going forward, therefore, there is a lot of work being done also on the inventory side, and all of this, I think, should help us.

Anyway, Pramod, would you like to add something?

Sure. This 920-odd number, which includes short-term as well as long-term.

While long-term is at range of 590, and we have another repayment, which is scheduled in this quarter 4, which is to the extent of 28. We are very confident to generate revenue or cash margins to fund the repayment as well as the interest component.

With that, we'll have at year-end, about close to about 550 or 555, that is the number for long-term. Then next 2 years, we have a significant amount of repayment at the around about 135 to 140 per annum.

We have worked out forecast estimates, and we are very confident to generate that much cash internally. As madam mentioned, that is purely based on one is about the overall growth in various markets; second is about the efficiencies which will bring us another reduction in overall cost of operation; and thirdly, basically, the reduced interest cost.

These three components, we are very confident to fund the repayment and interest. As madam mentioned, we don't require much CAPEX as such because we have invested in most of the businesses now, including our R&D.

Overall CAPEX will go down substantially during next 2 to 3 years.

What would be the maintenance CAPEX that we have for our business?

Around 35, 40 max per annum would be the maintenance CAPEX required, which will include certain energy-saving projects also, which we have planned, which will further bring in the cost reduction for the energy cost.

Got it. That's it from my side.

Thank you, and all the very best.

Thanks.

Thank you.

Hi, thanks for the opportunity. Most of my questions have been answered.

Just on the debt side, given the repayment schedule that you outlined right now, by FY '27, could we assume that your debt will be around let's say 750 to 800 crore numbers?

Yeah. Mr.

Rajesh, we could not hear you completely, but if I understand your question, your debt level for the next year. Currently, we are at 7 590, that is the long-term, while the short-term, as based on the overall business, short-term may remain more or less same.

Long-term, we have the repayment plan, which I explained just now. Next year, your question, I think, for next year, '27-'28, right?

By the end of March '27.

Accha,

March '27.

Okay.

Okay.

That is '26-'27, 1 year.

Okay. Sorry.

Go ahead.

I was just trying to understand that since you will repay about 150 crores or so of debt between now and March 2027, is it fair to assume that your overall debt, total debt, consolidated debt will go down from 920 crores to let's say 775 or 800 crores?

Correct. Correct.

Okay. In terms of the business this quarter, it sounded from your comments that it has been more of a supply issue because of US FDA and other reasons.

Can you quantify what is the revenue that you had to let go because of that reason, right? Because you actually paid about 8 crores of penalties on that as well.

Okay. I think there are two questions in here: one is about revenue, and the other is about penalties.

On penalties, etcetera, and remediation, one-time costs, we have around 8 to 9 crore. On sales that might have not come in because of pushing forward due to customer approvals or validation, regulatory, it happens all the time.

There was some last-minute change in MHRA guidance and some labeling had to be corrected. All that is not very meaningful, but that is a continuous cycle.

If it spills, it comes into the next quarter. Now

my understanding is you're getting the products made outside

That's right. Correct.

There is some margin that is being lost there. Secondly, you were talking about because of this US FDA, there are certain commitments you had.

Against which you paid the penalties.

Right. That's right.

If you put

these two things together to understand

what is the Yeah, they are different cases. The penalties are on historically unsupplied product.

As even for us to create second sites, it takes its own time. You have to register, you do tech transfer, you take batches, you do stability, then you file, then you get approved.

It's a longer process, which has now culminated, but historically, there has been gaps in time span when we could not supply. I hope that answers your question.

I think you are also asking about margin. Safe to say that we are outsourcing from third parties which also have economies on scale on certain products.

We feel confident to spread our product basket like that, where we'll continue to have supply from some people and some products will be made in-house.

Right. What was the margin lost because of that, if you can quantify in terms of percentage or rupees?

There is no margin lost, but yes, there are one-time costs associated with technology transfer. They are against product supply over a long period of time.

I think we can roughly quantify that 20, 30

In that range, yeah.

On an annual basis, we would have spent around 20 CR.

Yes.

Yeah. All the costs we might have incurred on doing this technology transfer would be close to 20 CR.

Yes.

That is an additional cost. It gives us a surety of second line of supply and where we do not have to worry about penalties in future.

Yes.

Does that answer your question?

Yeah. I'm just going to rephrase to make sure I understood this.

The 20 crore is what you have paid in the current financial year for the one-time cost to transfer it to somebody else's site. On top of that, in this quarter itself, you have paid 9 crores in remediation and on penalties, right?

That's

right. Right, correct.

Okay. Do you have a number what is the total cost of remediation and penalties for the 9 months?

On a quarterly basis, we used to have a remediation in the range of 4 and 1/2 to 5 crore. Now in the last quarter, it is slightly reduced.

When we talk of remediation, it is over and above all these product-related costs.

That is separate.

That is for consultant charges, etcetera.

Okay. Right, so that's what I was trying to understand, that if

you put Yeah. I got your point.

Yeah.

20 crores plus let's say 4 and 4, 8, and plus this 9, 17 plus 20, roughly about 35, 40 crores in this financial year is sort of one-time cost, which would not have been there had you had your US FDA approval. Is that the right way

to

understand the situation?

Agreed. True.

Okay. Thank you.

That's all.

Good evening, ma'am. Thanks for the opportunity.

Am I audible?

Yeah. Go ahead.

Ma'am, on the OTC business, how much we made this quarter, madam?

I think this quarter, I know on YTD basis, we have done 94.

33.68. 34.

34 crore this quarter.

Yeah. On the OTC business, assuming that the same run rate is going to continue, I think what will be the next year assumption for the OTC business, madam?

Can you repeat that? I couldn't hear you properly.

I'm asking that considering that the OTC now every quarter, we are making close to between around 30, 32 crores we are making.

Yes.

I think 130 crores during the current financial year. For the next financial year, what is the expectations for the next financial year for the OTC business?

There people in your brotherhood have told me I should not be giving forward-looking projections. Safe to say that with the amount of energy we are putting in consumer marketing, in advertising, these numbers should go up safely by at least 30%.

Because we are good to see that you are giving some two brand extensions also. I think that the business should go better in the next year as well.

Yes. Yeah.

Okay. Thank you, ma'am.

That's all for me.

Are there no further questions?

Okay. Thank you.

Thank you all for logging in today, and thank you for the very interesting questions. Wish you a good week ahead.

Thank you.

Thank you so much.