Thank you, Lizann. Good morning, everyone, and welcome to the Q2 FY26 earnings conference call of Glenmark Pharmaceuticals Limited.

Before we start the call, a quick reminder to everyone that the information, statements, and analysis discussed during this call describing the company's or affiliates' objectives, projections, and estimates are forward-looking statements based on current expectations, forecasts, and assumptions which are subject to risk and uncertainties which could cause the actual outcomes to differ materially, and no representation or warranty, either expressed or implied, is provided in relation to this document. Company undertakes no obligation to update or revise forward-looking statements whether because of new information, future events, or otherwise.

From the management team, we have Mr. Glenn Saldanha, Chairman and Managing Director, and Mr.

Anurag Mantri, Executive Director and Global CFO. Like always, I'll provide a brief update on the overall business for the second quarter and then hand it over to Glenn and Anurag for their opening comments on the current and future potential of the company.

Following that, we'll open the floor up for Q&A. In terms of our overall performance for the second quarter, Glenmark's consolidated revenue from operations was at ₹60,469 million as against ₹34,338 million in the corresponding quarter last year, recording a YoY growth of 76%.

For the six months ending September 30, 2025, Glenmark's consolidated revenue was ₹93,113 million as against ₹66,780 million, recording an increase of 39.4%. In terms of our regional performance, starting off with India, sales for the formulation business for the second quarter of FY26 were ₹1,650 million as against ₹12,817 million in the corresponding quarter last year, recording a decline of 87%.

Glenmark has a unique legacy three-tier distribution system in India, unlike peer companies, and there was increasing uncertainty within the distribution channel following the announcement of the GST regime change on August 15th. During the second quarter, Glenmark's primary sales were affected due to one-time reduction of distributor inventory levels, some postponement of orders, and impact of freight and reverse logistics, all in anticipation of the GST regime change.

Growth was also impacted due to the base effect of the discontinued tail-end/low-margin products. The company expects reported growth for India business to be in line with the secondary sales growth, starting the third quarter.

In terms of secondary sales growth for the second quarter, Glenmark continued to outperform the Indian pharma market. As per IQVIA, Glenmark's India formulation business recorded a growth of 10.8% in the second quarter and 11.4% as per MAT September, compared to the overall market growth of 6.4% and 7.3%, respectively.

In terms of its core therapeutic areas, Glenmark continues to outperform the overall market as per the IQVIA secondary data. We are now ranked 13th with a market share of 2.3%.

We have in fact now added a couple of additional brands to the IPM top 300. We now have 11 brands in the IPM top 300 as of MAT September.

In terms of our key core therapeutic areas, we are ranked second in dermatology, third in respiratory, and fourth in the cardiac segment, as per the IQVIA MAT September data. In terms of some of our key launches in India, starting off with Tevimbra, Bukinza, so as we had announced earlier, Glenmark had launched both these products for Tevimbra and Bukinza in partnership with BeiGene in the first quarter, and these two brands have seen a very strong uptake in the market in a short period of time as a differentiated treatment option available across multiple solid and hematological tumors.

The company expects these two brands to further gain momentum and meaningfully contribute to the India business growth over the next two, three years. Lirafit, we continue to see strong market share in Lirafit in liraglutide market.

As announced earlier, we plan to launch other GLP-1 agonists as well. Zepras, which is partnered with Pfizer, and we launched the product in Jan 2024.

Again, as a novel treatment for moderate to severe atopic dermatitis, Zepras has been well received by dermatologists overall. Our consumer care business recorded secondary sales of 10%.

Candid powder continues to hold leading share in the market as per the IQVIA data. Scalpe portfolio delivered a very strong growth during the second quarter, and some of the other direct-to-consumer brands also performed well.

We recently transferred the India GCC business into a wholly owned subsidiary called Glenmark Consumer Care Limited to bring better focus to the India consumer care franchise. Moving on to North America, the North America business recorded sales of ₹44,656 million for the second quarter as against ₹7,405 million for the second quarter of last year.

Net of the out-licensing income for ISB 2001 deal, the core business growth in North America for the second quarter was 7.4%. In the second quarter, we launched two very interesting products: micafungin injection and eribulin mesylate injection.

We now have more than 10 injectable products launched in the US market and continue to build a strong institutional business franchise in the region. We are obviously leveraging our strong development capability in respiratory are awaiting approval for two ANDAs for the generic nasal sprays which we have filed earlier, and as announced earlier, we have filed the ANDA for generic Flovent 44 mcg, and we are working on additional filings in the respiratory area as well.

We plan to file two ANDAs in the upcoming quarter and launch three to four products each quarter going forward. Glenmark's marketing portfolio as of September has 53 applications pending at various stages of the approval process, of which 25 are Para IV.

Moving on to Europe, Glenmark's Europe operations for the second quarter was at ₹7,460 million as against ₹6,874 million, recording a growth of 8.5%. Glenmark's European operations returned to growth in the second quarter driven by a robust uptake of new product launches.

Glenmark continued to outperform the overall pharma market in key branded markets like the Central and Eastern European countries. The Western European business also recorded double-digit growth.

Branded respiratory portfolio continues to have a strong trajectory in the region. As mentioned earlier again, we are focused on increasing contributions from the branded markets and the branded portfolio in Europe.

We now have seven respiratory products which have been commercialized across the region, and we are awaiting launch of an additional two, three products over the next 18 months. Glenmark also launched Winlevi in the UK, and initial response has been very positive, and we will be launching it in other European markets as well once we get the final approval.

On the emerging markets, for the second quarter of FY26, revenue from the emerging markets was ₹6,585 million as against ₹7,041 million, recording a decline of 6.5%. Growth in the emerging markets continue to be impacted by geopolitical uncertainties which resulted in lower uptake in certain markets in Latin America and Middle East Africa.

However, Russia business did well. As per IQVIA MAT September data, Glenmark's Russia business recorded secondary sales growth of 8.1%.

Ryaltris continues to do well in Russia and gain further share, and we are continue to be ranked amongst the leading companies in dermatology and expectorant market in Russia. In Latin America, as mentioned, we witnessed some subdued secondary sales during the quarter.

We have launched multiple differentiated respiratory products including Ryaltris in markets like Mexico and expect a stronger performance in the forthcoming quarters. In Middle East Africa also, growth was impacted due to lower uptakes.

However, again, Ryaltris as a brand continues to do well in the region, and in other markets where it has been launched in the last few quarters, we have seen good uptake for this product. APAC region, we did well.

We recorded double-digit growth during the quarter, and again respiratory and dermatology in both areas, we continue to do perform well. Ryaltris again will be a key growth driver and will be launched in additional markets like China and Thailand by our partners in the forthcoming quarters.

Quickly giving an update on our global innovative specialty portfolio. Ryaltris, as mentioned, marketing applications for Ryaltris have been filed in more than 90 markets.

The product is now commercialized in 49 markets. Recently, we announced that our partner, Grandpharma, had secured approval for Ryaltris in China.

We're working with Grandpharma to launch the product in the first half of the coming fiscal year, and our partner in Thailand, Organon, is also preparing to launch Ryaltris in the fourth quarter of this year. Winlevi, so as mentioned, the company has launched Winlevi in the UK.

We are expecting approval in other European markets as well, and as soon as we get the approval, we'll launch the product. Our partner Cosmo received a positive CHMP opinion in August 2025, and Winlevi is also under regulatory review in South Africa.

Envafolimab, we have already filed 14 applications for Envafolimab, and first commercial launch is expected towards the end of this year. We've received authorization from regulatory agencies for to supply envafolimab in Kenya.

We've also initiated a global multicenter Phase 3 trial in the neoadjuvant, adjuvant NSCLC setting. Trastuzumab deruxtecan, in Q2, we announced an exclusive license and collaboration agreement with Hengrui Pharma for trastuzumab deruxtecan, which is a next-generation HER2-targeting ADC.

Glenmark has gained rights to register, develop, and commercialize the ADC in several emerging markets. This is Hengrui's self-developed HER2-targeting ADC.

It was approved in China for treatment of HER2- HER2-positive non-small cell lung cancer. It is also undergoing other clinical trials in HER2-targeted solid tumors.

Finally, on Ichnos Glenmark Innovation, a quick update on the various IGI pipeline. ISB 2001, obviously the one big update was that post our deal announcement in July, we got the approval from the US FTC and received the upfront payment of $700 million in September.

As mentioned earlier, we are eligible to receive up to $1.225 billion in development, regulatory, and commercial milestones, along with tiered double-digit net sales royalties, and Glenmark Pharma will be leading the commercialization across emerging markets. ISB 2301 is the next molecule in our IGI pipeline.

This is a first-in-class multispecific NK cell engager developed for solid tumors, and the first program from IGI's IMMUNITE platform. The key update here is a clinical candidate was selected in October, and the program has entered IND-enabling studies.

Finally, on immunology portfolio, ISB 880, which is the IL-1RAP antagonist which was licensed to Almirall. Recently, Almirall announced that ISB 880, or ALM191, as they call it, has moved into Phase 2 studies in hidradenitis suppurativa, which is a large dermatology indication.

ISB 880 sorry, ISB 830, which is STAR 310, this is the OX40 antagonist licensed to Astria. Recently, Phase 1 trial was initiated by Astria, and they presented initial data at the European Academy of Dermatology and Venereology conference in September 2025 as a late-breaking oral presentation.

Based on the initial results, the molecule looks positive in terms of its efficacy as well as safety profile, and there is potential for infrequent maintenance dosing, which is a key update there. I think with that, I will hand it over to Glenn for his opening comments.

Sir, over to you.

Thank you, Utkarsh. Good morning, everyone.

Thank you for joining the call today. I've been running Glenmark for 25 years now, and this is, in fact, my 100th earnings call as a listed company CEO.

Since our IPO 25 years ago, Glenmark's revenues have grown more than 80 times, from ₹200 crores to ₹16,000 crores, and we have delivered phenomenal returns to our shareholders as the stock price has gone up over 200 times during this period. Across these years, investors have always questioned our huge investment in innovation and our ability to deliver anything meaningful.

In the past, to keep supporting this ambition, our operating margins and balance sheet has constantly been under stress due to high debt and other practices like high-cost pre-collections from distributors to manage our cash flows. We knew that we would we were building something strong and building a strong R&D platform, we kept going.

The ISB 2001 deal clearly vindicates our years of investment in innovation. With this deal and with the receipt of $700 million, we're able to pay down all our debt, and we net cash positive.

We are also currently changing some of the legacy practices like pre-collection. Today, since we have surplus cash, we thought it's the best time to undo some of these practices.

Additionally, we have now corrected some other anomalies in our balance sheet which will help us improve our overall return ratios. All this will be covered by Anurag shortly.

Post Q2, Glenmark is entering a new phase called Glenmark 3.0. I see Glenmark in the next 5 to 10 years as a glorious phase for the firm.

We will accomplish our journey of moving up the value chain into becoming more of a branded-led company globally. In Glenmark 3.0, if I look at each of our businesses, our India business is a very strong business.

We've built very strong brands such as Telma, Ascoril, Candid, Alex, and we're leaders in the therapeutic areas that we operate in. We are in the top three in dermatology, top three in respiratory, top three in cardiovascular, and oncology continues to do well for us.

Our OTC business, our in-licensed products such as Tevimbra, Bukinza, and our chronic business will continue to outperform as we go forward. As per IQVIA and AWACS, we've been consistently among the fastest growing companies over the last decade as per secondary sales.

Unlike our peers, we've had a legacy three-tier distribution system. We thought we had optimal inventory in the channel.

However, with the unexpected change in GST announcement in middle of October, the distributors decided to reduce their inventories due to price differentials. Today, most of the distributors have brought down the inventory levels to below threshold, you could see some restocking happening going forward.

From Q3 onwards, we should get back to ₹1,150 to ₹1,200 crore run rate for our India business. Additionally, our India business should deliver over ₹4,800 crores in top-line revenues in FY27.

Our US business on the US side, our US business continues to demonstrate strong growth going forward. We look forward to our respiratory launches, our Monroe plant coming online, the in-licensed products continuing to deliver good growth, and the next three sole FTF/exclusive products should launch in FY27.

Overall, FY27 should be a very strong year for the US business, and the growth momentum should continue post that as well. In Europe, our business continues to deliver very good results.

Our respiratory launches, Ryaltris and Winlevi, should be major growth drivers for the firm going forward. Growth for the region should be in the double-digit range in the second half of this year.

In emerging markets, while Q2 is an aberration, overall our emerging market business continues to be very strong. The main growth drivers in EM will be our specialty launches like Ryaltris, envafolimab, the Hengrui HER2 that we just licensed, additional in-licensing, and eventually ISB 2001.

Due to this, our emerging market business should see remarkable growth going forward. If I move on to IGI, in IGI, we've invested heavily over the last decade in building a world-class multispecific antibody platform technology.

This is a plug-and-play technology. The excellent ISB 2001 clinical data clearly validates that the platform works.

Hence, we see all future assets coming out of this platform having a higher probability of success. Not too many companies, including oncology-focused big pharmas, have a multispecific antibody platform technology.

This is very unique and gives us a huge competitive advantage. At IGI, we're currently running over four multispecific preclinical and discovery programs that will be coming into the clinics over the next five years.

The first is ISB 2301, which enters the clinics in FY27. IGI will keep spending around $70 to $75 million a year to bring its pipeline forward.

Assuming these multispecific programs work, each of them could be as valuable as ISB 2001. Out-licensing deals could be pretty big going forward from IGI.

With the three partner programs of ISB 2001, ISB 880 entering Phase 2, and ISB 830 in AD, and a world-class multispecific antibody platform technology, IGI could be amongst the most sought-after, valuable company in the next 5 to 7 years globally. Friends, in summary, post our Q2 results, I see Glenmark 3.0 as a company entering a very strong revenue growth phase of 12% to 15%, strong operating margins of 23% going forward, targeted to go up to 25% plus in the years to come, a well-funded company generating strong free operating cash flows, being zero gross debt in FY26, generating industry-best ROCEs and ROEs in FY27 and beyond, excellent world-class R&D portfolio with ISB 2001, ISB 880, and ISB 830, a world-class multispecific platform technology in IGI that is delivering subsequent assets like ISB 2301 and the three new programs, large out-licensing partnership deals over the next five years.

In the early years, some of our previous deals were in the range of $20 to $50 million upfront because we needed the cash. Now that we have a strong balance sheet and are well funded, we are in a position to realize the full potential of the pipeline similar to what we did with ISB 2001.

IGI is being self-funded for the next 3 years. During this time, we will progress a very exciting pipeline of 2301 and 3 additional multispecific programs in the clinics.

Post 3 years, we can expect additional milestones from our partnered assets to fund IGI, potential new deals for the four programs that we are currently running, and possibly an IPO to raise additional funds. Hence, we will ensure that IGI remains continues to remain self-funded even going beyond the 3-year mark.

To conclude, our FY27 revenues, we expect to be about ₹17,000 to ₹18,000 crores in terms of top-line revenues. I would now hand the floor over to Anurag to give his opening comments.

Thank you, Glenn. Good morning, everyone.

As Glenn highlighted, the Glenmark 3.0 is now entering a phase of strong and sustainable growth. This will be a growth-oriented phase with a strong balance sheet and prudent capital allocation.

To strengthen our balance sheet, bring in tax efficiencies, and focus on the cash flow generation, we have implemented some key changes in terms of our provisioning norms and standard operating procedures. While the one-time IGI income in this quarter would have impacted our capital ratios, the balance sheet restatement ensures that our financials represent the true capital efficiencies of of our core business.

Let me just outline the key changes which we have instituted in terms of our overall way of operating and the financials. We have discontinued in the past actually we have due to various operational constraints, as Glenn mentioned, we had legacy pre-collection arrangements with the distributor across geographies.

These were high-cost arrangements and as high as 20% in some cases, which adversely impacted our margins. With constraints now removed, we have discontinued these pre-collections, resulting in large increase in debtors.

The transition will support improved operating margin and help us to continue a strong margin trajectory going forward. This will also help us enhance our working capital efficiencies and sustain a net working capital cycle of around 110 to 115 days, which will be in line with the peer companies despite a diversified global presence.

On provisioning, we have let me explain you the one-time provisioning and charges of debtors and inventory. We have revised our policies on debtors and inventory and, in line with the prudent accounting norms, restated certain provisions and charges to better reflect our true return ratios.

These balance sheet charges are tax-efficient, cash-neutral, and very value-accretive for the shareholders, driving improvement in key metrics such as ROCE and ROE. We are at debtors level of around 90 days and inventory level of around 80 days now, which is in line with the industry or perhaps better than the industry average in terms of inventory days despite our geographical spread.

This will help us support the growth from Q3 Q3 FY26 onwards. These provisions these are provisions, and hence any recovery of debtors and inventory in the future will add to profitability.

Now let me give you the cash cash flow reconciliation from the AbbVie deal. I will start from the opening cash of 31st March 2025.

We had a opening cash of ₹1,705 crores. From ISB 2001 deal, we got around ₹5,950 crore.

That takes us to our cash to our ₹7,655 crores. Then out of this, we have repaid the gross debt of ₹1,300 crore.

We have paid the cash tax and interest, cash tax of around ₹75 crore and interest of around ₹150 crore. The capex in the in this H1 was around ₹500 crore.

Then we have also paid the one-time expenses of around ₹650 crore. These included one-time bonus payout to IGI team for successful execution of the of the deal, deal execution expenses, IP and documentation transfer charges, also the closure of the facilities in Switzerland.

As in these geographies, typically closing of the facilities, you have to dispense a lot of liabilities at the time of the closure, which included employee-related liabilities, local authorities charges, all these have been now settled with the authorities, and various other miscellaneous items. With this, the approximate then ₹2,874 crore was spent like this, and it includes also the legal settlement of around ₹200 crore, which we have actually provisioned earlier and was has been now expensed out.

This includes the one provision which we made in the quarter one, if you recall, that 37.5. Out of that, almost 11 million we have repaid in this quarter, and some of the provisions of the past year we have repaid in this quarter.

This does not include any P&L charge, only cash outflow, and this is only for cash reconciliation purpose. This takes up adds up to ₹2,874 crore.

Beside this, if you recall that we had a because of India sales, we had a H1 business cash deficit of around ₹500 crore. Then that leaves us with the change in working capital of around ₹1,600 crore, which is primarily due to debtors and inventory.

This is debtors is because of, as we said, is because of the stop of pre-collection, there was an increase in debtors of around ₹800 crore, and similarly inventories are actually to build up the for the quarter two sorry, H2 businesses. We had to actually and inventory, as I told you, is still an 80 days as compared to the industry practice of 90 days.

It's all healthy inventory which we have to build up to support the growth rate of the business in H2. That's all that to two of the one of change in working capital of around ₹1,600 crore, and that leaves us with the cash of around ₹2,600 crore, 2,647 to be precise.

That's actually gives the full cash reconciliation. With all the above changes, we are in a very strong position and have ensured that we manage the we that we manage to fully express the true future potential of our business.

To summarize, Glenmark 3.0 will be immediately impactful as our EBITDA margin will trend towards 23% and strengthen further over period of time. We will continue to maintain a strong balance sheet by sustaining zero debt and focusing on robust free cash flow generation.

This will enable to maintain industry-leading return ratios of around 25% to 30% of ROCE and 20% to 25% of ROE going forward. With this, we can start the Q&A.

Hi, thank you taking my question. Glenn, couple of things.

One is clearly the way the Q2 results came out, they were from the other corrections that were there in the P&L, balance sheet, were fairly unexpected. That's for the record.

On this part, Glenn, you've heard your explanations and how you see things going forward. As an assurance, from whatever you've done so far, are we done with these corrections on the legacy issues on the balance sheet and the P&L?

Or is this literally the end of it, or you people like to just reconfirm?

Nitin, very clearly, if you heard my commentary, right, we are clearly in a position where we'll take each of the pieces, okay? For example, for India, where I've clearly guided to ₹1,150, ₹1,200 crores is starting Q3, and next year over ₹4,800 crores of sales, right?

That should tell you that the India business is back on track. As far as the balance sheet changes, right, the pre-collections, we're pretty much done with everything.

We've changed the model completely, right? The balance sheet changes is clearly reflective in our ROCE and ROE, right?

Obviously this year, ROCE, ROE will be very high. Next year also, we'll have industry-best ROCEs and ROEs, right?

Given all this, we made a lot of provisioning. Some of that could obviously get added back as we go forward, right, particularly debtors and inventory.

I think from our perspective, there are no further changes in either the P&L or balance sheet corrections which need to get done going forward.

Nitin, basically just to add to that, actually we have looked at all the provisioning norms, and we have now made it on certain principles. We had a new auditor also in place, and then we discussed thoroughly with them.

We have now made a very standard process of the provisioning norms. Going forward, I can assure that's the reason we have actually taken a one-time in terms of debtors was largely because of pre-collection, and inventories are in line.

All these charges actually will help us that balance sheet is in a very strong place and truly reflect the capital employed in the business because that will help us to truly reflect the capital employed in the core business and improving the ROCE and ROE accordingly.

Thanks. Glenn, just working a little bit on that.

You mentioned in your opening comments that in the past, because of investments in R&D and everything, cash flows had been a constraint for Glenmark in the past. Now with that constraint being eased, what impact does it have on the business?

What flexibility does it give you for the business on a going forward basis?

Look, the way I see it, Nitin, the journey for Glenmark at least for the next few years is very clearly related to continuing to be a high-growth business, right? We are back in the growth phase because all these years, right, we were investing heavily in innovation, right, and we couldn't optimally invest in the base business.

We are now back into a high-growth phase as an organization. My aim is to grow this business around 15% as we go forward, right?

If you see India, for example, last month, we had a 17% growth, right, which was among the highest in the industry, right? We are back into a high-growth phase, right, as an organization.

Our focus is to grow this business organically, we will continue to grow organically in most of our geographies. Just by focusing on organic growth, we will get to those high-growth numbers going forward, right, as an organization.

Of course, free cash generation, we talked about the EBITDA margins going to 23% immediately, and then eventually, as the business scales, we'll go up to 25% odd percent. Then the free cash generation is a must-have, right, for us.

Although we'll have zero net gross debt, right, by the end of FY26, thereafter also we will ensure that the business will continue to generate free cash, and then we'll figure out, right, what the next steps are with the cash that gets generated by the business from FY27 and beyond. The journey ahead is a very different one than what we faced in the past, right?

In the past, a lot of constraints came because of our high investment in innovation, right? Now that with 2001 deal happening, the cash coming in, automatically the next steps for the organization is very different, right, where the business will throw a lot of free cash from FY27 and beyond, right?

This year of course, we are well funded, right, for this year. FY27 and beyond, the business will throw significant amount of free cash, right, as we go forward on a very high EBITDA, almost ₹17,000, ₹18,000 crore top-line with EBITDAs of 23% plus, right, will generate significant amount of free cash.

Thanks. Anurag— Go ahead.

Just to build on that. H1, I think our guidance is almost ₹1,800 crore EBITDA or thereabouts.

I presume given what we've discussed so far, we should have some generation of free cash in the second half of the year?

Yes, if you see that I think we are still at a ₹2,700 crore of cash in the books. As the business generate, we will surely be in a cash positive.

As Glenn mentioned that our aim will be to have a completely gross debt zero by FY20 end of this March, end of this fiscal. The business will continue to have a cash generation, and, as we outlined, we'll have a very prudent capital allocation going forward to grow the business.

Thank you so much.

Hi, thank you for the opportunity. My first question is, you mentioned you've paid around ₹650 crore as one-time bonus and some deal-related charges, etc.

If we see that number as a percentage of the money which you got from the deal, almost coming to 10%, 11%, right? If you can explain, is this the global norm of paying such high amount to employees as an incentive, or why you have paid such a high amount, if you can just throw some light there?

Damayanti, first of all, that ₹650 crores is not employee bonuses, okay, and it's not only deal cost. It combines a lot of different line items that Anurag mentioned, right?

Anurag, go ahead.

Basically, Damayanti, employee bonuses are one part and which is in line with the biotech companies where you have to actually incentivize the R&D team and specifically to continue to build the pipeline in future. That's absolutely in line with, and we looked at various consultants' inputs on this, and so that's one part of it.

Beside that, it also includes because we've done this deal in a and most of the big pharmas enter the data room. We set up the data room, lot of legal charges, due diligence charges, lot of consultants were involved.

All this actually, and especially all this was actually done into the European geographies and US geographies, which is a very high cost in terms of the lawyers and other fees. That's also included.

Also include the LCDF closure charges, which was regulatory. Why is in these geographies it's not easy to close the facilities, specifically to dispense a lot of liabilities.

It included all the settling of all the employee-related liabilities, local regulatory liabilities, and everything. This is not only that, it's a combination of that.

With that, I think these numbers are very reasonable, I must say that.

Anurag, can you specify as a percentage what was the actual one-time paid and then there are other expenses? That will be, I guess, more clearer.

I think because of confidentiality reasons, Damayanti, it's impossible to talk about specific deal bonuses or any specific line items, right, on the call.

Also it included the IP and documentation transfer charges, which we also have to do as part of the transfer of this ISB 2001. All these have been actually booked on this.

Okay. My second question is on India business.

Glenn, again, I think we are looking for some clarity because, see, GST came as a window. If GST change didn't happen, you wouldn't have taken this write-off, or you used this window as an opportunity to clean up the issues on distribution side?

Because two years back also, you did this inventory write-off, and at that time, we thought it's the cleaned up base to start on.

Damayanti, if you see my opening comments, right, we thought we had an optimal inventory level in the channel, right? However, this the GST thing came as a as an unknown, right, for us, right?

It was totally unexpected, right? Then the distributors, because of the differential, right, in the GST rates, right, they started reducing their inventories, right?

Today if you see, that is all for us now they've reached, inventory levels which are below the threshold, right, and you could see some amount of restocking. This was completely unexpected from our side, right?

We have taken a correct—

Glenn, if I may interrupt, I think this discussion on GST, etc., has been going on for some time, right? I believe industry is also involved as a part of discussion.

That

Glenmark has a unique distribution model, okay? We have a three-tier legacy distribution model.

Most of the industry is already on C&F, okay? They have C&F, so that is making the big difference, okay, right, because of the three-tier distribution system that we have.

That is what has impacted us, and it's not impacted the rest of our peers. It's again, it's a one-time thing, as I mentioned.

From Q3 onwards, you should see sales coming back, and we've even guided to ₹1,150, ₹1,200 crores from Q3 as well as next year ₹4,800 crores and above. Okay.

Just to be on same page, if you can explain what is the third layer which is additional for you against peers?

We have a super stockist structure, okay, which is, we have super stockist or distributors, right? Most of the other companies have a C&F model where the inventory and everything is on the company, right?

Inventory and receivable collection from stockist is on the company, whereas for us, when we do the billing, the inventory is on the distributor, and it's his responsibility to collect from the channel. That's the uniqueness of the model.

I'll get back in the queue. I have a few more questions.

Thank you.

Good morning, everyone. Firstly, again on the India business.

Glenn, in Q3 FY24, you had undergone some kind of restructuring, and now we have this restructure again in Q2 '26. Do you mind telling us what the difference was?

The extension to this question is since you still have a three-tier distribution structure, in future if there are some changes from the government end or from the industry's end, do you run a risk of something similar happening?

Kunal, I explained what currently happened, right? In terms of the future, look, the distributor inventories are now at very low levels, right?

Automatically, in fact, we are expecting some restocking. Now, in future, if there is any other change that happens, it's impossible to predict, right?

I don't think in the future we will be at a disadvantage because of the three-tier system. That is pretty clear for us, right, as of now, right, whatever we can see, because the inventory levels have come down to very low levels now.

All right. Then again, in Q3 FY24 also, I think there was some intention of getting inventory down, right, if I'm not wrong?

That's correct. That was an inventory, we reduced

the— Kunal, at that point, as I think we explained that what we did is we basically consolidated some of our stock points, because while we had the three-tier system, over a period of time, we built some inefficiencies in terms of how many number of stock points we had across the country, and we just thought we will consolidate some of that business. That was a change that happened in Q3, 18, 24 months back.

I think what has happened this time, Glenn has explained, and I think we spoke about the future as well.

Right, okay. My second question, again, I think Anurag did explain the ₹1,650 crores of working capital, that's gone in the cash flow statement.

To be honest, I can't really see it in the cash flow, the balance sheet. My question is, if your inventories have now gone down, how is ₹1,650, if you can sort of split it between receipt because I think some payables would have also gone up, or what if you can just give this split?

Kunal, if you see that there was an inventory gone up by around ₹250 crore on the face of the balance sheet, and debtors was close to ₹400 crore on the face of the balance sheet. The underlying to what that is that we stopped the pre-collection, so that has actually increased the ₹800 crore of the debtor.

That's what the reconciliation. Inventory levels also, as a going concern business, we'll have to keep building the inventories for the next H2 and to support the growth.

Which is a normal inventory of ₹3,300 crore today we are carrying, which is 80 days of the just 80 days of the inventory levels.

Yeah. Kunal, just to clarify, we can connect offline as well, but if you see the cash flow, there is part of the $700 million, right, where we received the cash, but the P&L booking will happen in subsequent quarters.

That is sitting in other current liabilities and other non-current liabilities. That's why if you adjust for that in the cash flow statement, broadly you will get to the working capital increase that we're talking about, but we can talk it offline also for

the details. Basically, the 1,500 So, if you see out of ₹6,000 crore gross number as what we received, we have booked only ₹4,500 crore in this P&L.

Balance ₹1,500 crore, what Utkarsh mentioned, is sitting in other current liabilities. That's what the number is actually.

We can give you the full reconciliation of that.

When we explain the cash, we took the full cash at the start, right, the entire ₹5,950 crores. That's why we have to take the actual cash impact for the working capital increase.

Right. Just one more if I can.

You have a net cash of what, around 15, ₹1,600 crores now. I believe you still need to pay the tax on the proceeds of this ISB 2001 payment.

Can you guide to what your number could be by the end of FY26, a net cash number?

Okay. Net cash of right now we are sitting is actually ₹2,647 crore, exactly to be precise.

In terms of the taxation of this, we have actually really worked at very well, and we have brought down despite the three level of taxation, which is Swiss taxation, US taxation, and India taxation on this money flow, we have actually brought it down to close to a $90 million of total cash outflow of the taxation. The charge will be higher, but we have worked out with the various structure of absorbing the losses in the various entity, this has come down to almost 12% to 13% of the total deal value of a cash outflow.

That will be there, and I think large part will be going in H2, but I think balance will be going in the next year also. This completely has been built up in our cash flow planning.

As Glenn mentioned, with this, FY26, we will be a gross debt zero surely of that. Also, Kunal, significant cash will get generated in the second half, okay, right, from the business, right?

Just to keep in mind.

H2 is expected to be much higher than H1, I think as Glenn mentioned, it's almost ₹8,000 crore of revenue which is expected in H2, so that's actually also be a strong cash generation. Beside paying the full gross debt, we will still be a cash positive.

Got it,

sir. You'll be ending with at least this amount, if not more, that should be a takeaway?

Amount, Kunal, I would not say that. I think what I would guide is that our first target will be to have paid all the gross debt, and the second will be to actually support all these taxation and discharge all the liabilities in terms of that.

I think for this, it's only two quarters, you have to be patient with that, but we'll still be a cash positive.

Sure, sir. Thank you.

Thank you.

Hi. Good morning.

Just a couple of—

Am I audible?

Go ahead.

Perfect. Just on the India business, in terms of inventory rationalization, the channel unloading that you'll have done, what is the quantum of it?

Is it close to about ₹1,000 crores?

Little less than that, I'm guessing.

Around that. Around ₹1,000 crore.

See, our targeted run rate, as Glenn mentioned, going forward is 1,150 plus, I think that's what. I think if you remove that ₹150 crore what we have booked, close to 1,000 and maybe a little higher than ₹1,100 crore sort of number we could have hit this quarter.

Got it. Second, the ₹830 crore IGI and one-time charges line item, it doesn't include the R&D associated with IGI in Q2, right?

That goes in separately as part of—

No, it does not. It's only included the one-time charges.

It does not include the running expenses of R&D. Okay.

Okay. Glenn, just you have attributed a lot of your write-offs in this quarter and the previous quarters to your spends on innovation.

If you look at the last 12 quarters, right, the quantum of write-offs that the business has taken, it's actually a 1:1:1:1 split between Monroe, India, Zetia and other antitrust regulations, and the fourth one would perhaps be related to your intangibles or your R&D spends, okay? The question really is, and if you add them up, the quantum is pretty significant, and we can take the numbers offline.

Really, the idea here is to look forward and try to get a sense on what are the kind of controls that you've instituted within the organization? This is not addressed specifically only to Glenn.

It's really everyone who's listening to the call, the top management, the board, the CFO, right? This can't keep happening: Monroe, litigation, India, and obviously the innovation spends.

Just wanted to get a sense on how are you really full proofing it going forward? What are the checks and balances, the controls that you're doing?

Are there additional committees that are being set up? Do you have someone who's really keeping a razor-eye sight on what's really happening here, please?

Kunal, look—

No, this is Tarang.

Sorry, Tarang. The first part, right, look, many of the things you mentioned, right, we had a difficult patch as an organization, right?

There's no taking that away, right? Whether it's Monroe, right, all the FDA challenges we faced and the fact that the facility is not manufactured anything for the last three, four years and we continue to have that operating expenses.

Intangibles, a lot of the intangibles we were able to take certain write-downs. Zetia, we booked the revenues.

Unfortunately, we had these class action lawsuits where we had to pay back a lot of things. These are not in anyone's control, okay, from a operational standpoint.

It's impossible to predict any of these, right? Otherwise, from a overall business perspective, right, we have very strong controls in place, right?

We have a lot of governance committees that are formed now to look at the various aspects of the business. We have a great leadership team overseeing most of our businesses.

Some of the three, four points that you mentioned are clearly, it's impossible to predict, right, the issues we faced in Monroe or the issues we faced with regards to the litigation cost that we ended up incurring. Even there, we have strong compliance committees now in place, right, to oversee some of the litigation aspects, right, to make sure we don't have those issues again.

I think as an organization, right, we've evolved significantly. There's no taking away that the last four, five years, right, prior to the 2001 deal, were difficult years because we got hit with a lot of different things from different areas, right?

Be it litigation, be it Monroe, be it some of our other business challenges that we faced. That obviously, in my opening commentary itself I mentioned, led to increase in the debt level and led to increase in certain things that we had to do, right, from a cash flow perspective, right?

Today, we are in a very different place, okay, right? Today the business is rock solid.

The growth is very strong. Margin profile is strong.

We are sitting on cash, and we will continue to sit on cash. We'll have no debt on the books.

There's a lot of strength in the underlying business, okay, today, which we struggled to keep in the past, right, or have in the past. I think that gives us the confidence that the next decade will look very solid for us, right, given all that we've got going.

Plus, we are unique in terms of innovation. Nobody else has a pipeline that we have.

Nobody else has a platform that we have globally. I think my personal view is the next 5 to 10 years should be transformational for Glenmark.

I've been doing this 25 years now, right? As I said in my opening comments, right, we've delivered significant returns to shareholders, 200 times when you think about it, right, since IPO, right, in terms of shareholder value creation, revenues growth.

Look, we are a fundamentally very solid company, okay, right? We've had a phase, every organization goes through certain phases where there have been challenges, right?

Unfortunately, we got hit with all this in the last five years. Now with the 2001 deal and the kind of cash flows and the strength in the underlying business, right, overall the next 5 to 10 years should look very strong for us.

All right. Glenn, just a retort to it.

I think like you called out, right, the last decade so to say for the business has been quite challenging from the point of view of the kind of deployments that you did in your innovation business. The longevity of this business takes time.

In some sense, ISB 2001 has been a strong reminder of the capabilities that you've created. What's also happened in the last three, four years so to say with the business is that for reasons that are best known and for challenges and risks that are best being navigated by the business, the business has not been able to deliver on free cash flow.

While, and it's somehow comes back-ended with these write-offs coming through, and that's where probably our sort of concerns stems from. What's done is done, and as you have called out and the team's called out that you're looking forward to the future, the only request here is that if you all could create a mechanism where there is actually some kind of tab in terms of trying to manage your free cash flows.

Because as analysts tracking this business for last five years at least, while you've been running it for last 20 years, been tracking it for last five, six years, these write-offs are extremely difficult for us to also evaluate the longevity of the business going forward. A sincere request if this is something that as much as it is under your control, obviously you're running a business, there are risks associated with running a business, but as much as it's under your control, if you could really put a needle on it, it'll be really, really helpful.

Last question, over the next two, three years, for all the cases that have been settled, the quantum of cash flows in the next three years would be in the ballpark of ₹800 to ₹1,000 crores. Does that number hold good, or is there an upside risk to that as well?

Sorry, can you repeat that?

For all the cases that have been settled? Also, litigation spends for different cases that the business has undergone, right?

Litigation spends, the cash outflow while you'll have taken a provision for it, but you'll have cash outflows coming through some bit of it in '26, '27, and '28. The number that I'm building in is about ₹800 to ₹1,000 crores.

Is that the number, or it's significantly lower or higher? It'll be helpful.

It's slightly lower than that, okay, Tarang.

Okay. Okay.

Thank you. All the best, guys.

Thanks.

Thank you.

Hi, good morning. Thanks for the cash flow reconciliation that Anurag offered at the consolidated level.

Just also wanted to understand at the subsidiary level at the IGI level, this entire $700 million, I assume, came to IGI, and how much of it is still with IGI?

No. IGI, as we outlined that as a capital allocation, we have said that IGI will be covered for next three years of their capital allocations, which is $70 million per annum, almost 210 to 225 will be allocated to IGI.

As most of them actually has been because IGI is a wholly owned subsidiary of Glenmark Holding, most of that has been actually then come back as a thing. Then some of this will be because of the tax planning perspective, some of this will be dividended out in the next year, it will be a phased-out dividend.

For IGI capital allocation, it's only $210 million to $225 million, which is allocated for them.

Out of the 700, only 210, 220 goes to IGI. The remaining came to some other entities of Glenmark.

Is that right? My understanding, right?

Yeah. Basically, that will flow through everything to Glenmark, and it will be parked in a treasury surpluses.

Okay. Out of the current 20 2,700 cash which is on your consolidated books, almost entirely, when you say $200 million, roughly 70%, 80% of that is sitting on IGI books now.

Is that my understanding correct?

Not IGI books partly is that, but actually as of September. Then we have transferred the money into October also.

Also then even if it's IGI, it's not physically sitting with IGI actually, because then it's been actually there was a intercompany debt which has been there. Because Glenmark has a better strength to earn the treasury income, so that has been now we are see in treasury, we are running as a consolidated basis.

That's how we are actually parking into treasury.

Sorry. The entire money came into Glenmark, non-IGI Glenmark entities.

Is that correct? Entire 700 million, then?

Yes. Fund physical fund-wise, everything, whether it's in the form of loan or the dividend or the other flow-through, it's been under control of Glenmark.

Okay. You will transfer $70 million a year to IGI for their expenses?

Right, absolutely. $35 million for this year H2 and then $70 million every year as we committed.

Understood. This $70 million will be fully expensed?

Will it pass through P&L as well? Because that is expense which is incurred by IGI, right?

Yeah. In P&L, you will see a revenue item of 30 $70 million every year and corresponding expenses, it will be neutralizing that.

Understood. Okay.

Thank you very much.

Thank you very much for allowing me to ask questions. My question is on the product.

Four assets that we mentioned on the multispecific platform, are they all trispecific antibodies, or also various other antibody formats like bispecific scFv, Fab, etc.? The second question is about the timeline that you mentioned, 5 years.

Is this a timeline for recognition of the revenue, out-licensing revenue from these four assets, or is this a timeline for these preclinical assets to enter the clinical Phase 1?

When we say multispecific, right, all these are more than trispecific, right? They have multiple binding sites, right, on the antibody.

This is all next-generation programs that we're working on, right, which can be transformational, just as we did ISB 2001. Regarding your question on timeline, we've said 2301 enters the clinics next year, FY27, right, which again is a multispecific.

Then beyond that, as we go forward over the next five years, you'll see one by one of these assets coming into the clinics. Regarding timeline to partner, we've said we will continuously evaluate partnerships, right, and we will try and close partnerships in the next five years, right, as we go forward.

Thank you.

Thanks. I'll just hand it over to Glenn for his closing comments.

Thanks, Utkarsh. Just to close, right, I think, look, this is the best phase of Glenmark I have ever seen in the last 25 years as we are making an orbital change for Glenmark, which allows us to reflect the true potential of the company.

In summary, my commitments to the shareholders in Glenmark 3.0 is to aim for sales of around 15% every year with an accent on a higher branded portfolio. On the margin side, a 23% EBITDA margin moving up to 25% in the years ahead.

Focus on strong free cash flow and maintaining a zero gross debt balance sheet going forward. Improving our return on capital employed of 25% to 30% and continue to focus on improving it further as we move towards a more innovative-led driven portfolio.

Strive to create world-class, cutting-edge innovative assets that will enhance value creation for Glenmark shareholders going forward. Enhance the payout ratios with an increased free cash flow generation which should happen in the years to come starting FY27.

With that, I want to thank you all for joining the call today. If you have any follow-on questions, feel free to contact either Utkarsh or anyone from the management, Anurag or myself.

Thank you very much.

Thanks, Lizann. I think we can close the call.

Thank you, everyone, for joining. Thank you, members of the management team.

Ladies and gentlemen, on behalf of Glenmark Pharmaceuticals Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines.

Thank you.