Thanks, Rico. Hi, good afternoon, everyone, and a very warm welcome to Ipca Labs—Ipca Laboratories Limited's Q4 FY26, FY26 post-results earnings call hosted by DAM Capital Advisors Limited.

On the call today, we have, representing Ipca Lab management, Mr. A.

K. Jain, Managing Director; and Mr.

Harish Kamath, Corporate Counsel and Company Secretary. I will hand over the call to Mr.

Jain to make the opening comments, and then we'll open the floor for questions. Please go ahead, sir.

Thanks, Nitin, and DAM Capital for organizing this call. Today's year-end call and discussions, answers given may include some forward-looking statements based on our current business expectations.

This must be viewed in conjunction with the risk that pharmaceutical businesses face. Our actual future financial performance may differ from what is projected perceived.

You may take your own judgment on information given during the call. Our domestic formulation business in Q4 FY26 has delivered a growth of around 12%.

Business was at around 853 crore as against 764 crore in Q4 2025. MedTech March '26, Ipca rank continue to remain at 16.

However, we have marginally improved our market share to 2.09% as against 2.08% in MedTech December '25. Six of our brands are featuring among the top 300 brands in the industry, and both chronic and acute segments, we are continuously beating the market.

Overall, for financial year FY26, our domestic business has grown by around 10% to around 3,817 crore as against 3,455 crore in FY25. Our export formulation business has delivered growth of around 9% for the financial year '26 to around 2,083 crores from 1,919 crore.

The promotional business for the quarter has delivered growth of around 14%, and for whole of the year also, this business has delivered a growth of around 14%. Overall business for the financial year has remained around is around 664 crore on promotional business promotional branded export business, as against 582 crore in last financial year.

Generic business, excluding tenders, has delivered growth of around 17% for the financial year to around 1,149 crore from 982 crore in FY25. Our institutional business has declined during the year to around 270 crores from around 355 crore in last financial year.

Even in the last quarter of the current year also, business has declined to around 74 crore as against 111 crore in Q4 FY25. API business for whole of the year has delivered business growth of around 10%.

The business now stand at around 1,396 crore as against 1,266 crore for FY26. Overall consolidated business for the company in FY FY26 March '26 has grown by around 6% to around 2,300 2,388 crore from around 2,274 crore.

Consolidated revenue for for whole of the year has grown by around 8% to around 9,646 crore against 8,940 crore for the financial year '25. Standalone EBITDA margin for the Ipca in Q4 has improved by to around 25.27% as against 21.19% in Q4 FY25.

This is an improvement of almost around 4.08%. For the financial year March '26, overall EBITDA margin standalone for company has has gone up to around 25.18% as against 22.66% in March '26, an overall improvement of around 2.52%.

We have significantly overall improved the margins as against our guidelines for the financial year. The consolidated Ipca Q4 FY26 EBITDA margin has improved to around 20.52% as against 18.24% in Q4 FY25, an improvement of around 2.28%.

For whole of the financial year March '26, EBITDA margin has improved to around 20.72% as against 19.94% in March '25, an improvement of around 1.78%. We have delivered better margins as against our guidelines of 20% for FY26 overall.

Having given the broad numbers, now I'll request questions from the participants.

Hello. Thank you for taking my question.

Sir, if we want to grow at 15% to 20% for the next 2 to 3 years, how many molecules do you think we should be launching at a yearly level? Because old molecules will have higher competition and price erosion is also happening there.

How many launches do you think we should be doing in a year? Secondly, what is our product pipeline for Q1 and Q2 of FY27?

That is my question.

As far as we are concerned, on the old molecules, we don't see any kind of price erosions as such. Normally, our policy is to take the price rise of around 5% to 6% in a year, depending on what kind of price rise competitors are also taking at the marketplace.

That policy will continue that way. As far as domestic market are concerned, we don't launch too many products in a year.

Each division has around two or three power brands, and then there are support brands in each division. At the most, in each division, we may launch one product or some line extension here and there.

If we have 20 divisions, in the year, we should be launching in domestic market around 18 to 20 products. That's that has been our business philosophy because more number of products you launch, the attention of the people get diluted.

That results in the overall defocus from the main power brands. We don't normally don't launch too many products in the marketplace.

As far as generics are concerned, let's say, currently, we are marketing around eight products in US. I think this year also maybe around six to eight products will be commercialized in the current financial year.

As far as European and other markets are concerned, each market situations are different, but normally we launch three to four products in each market in every year in generics. That is our overall position.

Okay. Specifically for Unichem, six to eight products, right?

Unichem has also good pipeline, and I think they should also be launching at least five to six products in current year. In

the whole of FY27?

That's apart from Ipca.

Sir. Thank you.

Thanks for the opportunity, sir, and congrats for the good set of numbers. Sir, first question is on the US business.

Is it possible, since it is a full-year financials, what was the US revenue that we would have generated out of Ipca, and what outlook that we are providing for next year? Yes.

Okay. One minute.

Overall, if you look at the consolidated numbers for the overall business, Ipca USA and Unichem USA put together, I think, in the quarter, US has done business of around 428 crores as against 388 crore in Q4 last year. There is a growth of around 10%.

Overall, for the full of the financial year, US business is around 1,567 crore as against 1,379 crore last year. US has given a growth of around 14% on consolidated basis.

Okay. Similarly, sir, if you can just give some sense about the kind of a growth that you have seen for the full of the for FY26, basically, for the key markets, let's say, Europe, Africa, CIS, Australia, like that.

Let's say India should be growing around 12% in the 12% to 13% in the current financial year. CIS market will have around 10% to 11%.

Overall promotional market, we expect almost around 12% to 13% kind of growth. Then overall generic market will also have around 12% to 13% kind of growth, which will include the US also.

Overall company as a whole, we should be able to, including Unichem put together, around 12% to 13% kind of growth on consolidated basis. On EBITDA side, from 20.7% currently on consolidated basis, I think it should be almost around 22% or 22.3% something, more or less on that line.

Okay. Yeah.

Next point was about the gross margin, sir. See, in fact, we have seen strong improvement, and for the full of the year also, there is a kind of improved performance that we have seen.

See, what can be attributed for this improved performance, whether it is the currency advantage or it is the synergy or it is the product mix improvement, US picking it up? What would have contributed to this margin improvement and how sustainable the gross margin be?

Let's say Ipca standalone, if you look at, as against growth of around 10%, our overall material cost to material cost has declined by around 2%. Overall for the whole of the year, except from February onwards, earlier the overall price was prices of materials has remained steady.

There was not much of fluctuations as far as the material cost was concerned around for the first 11 months, say, for the whole of the financial year, because we maintain certain stocks. As far as consumptions are concerned, not much except in the March certain solvent prices and February and March the solvent prices and some other materials, which was supply chain disturbance like ammonia and so many other things, acid, alkali, there are many of those materials has moved up.

Little material cost has moved up in the month of February and March in Q4 of the current financial year on standalone basis if you look at the numbers. The improvement in overall margins is by and large because of product mix changes.

That

domestic business is doing good, ROW market business is doing good, cardiac business proportions has moved up, and overall the generic business which is happening in most markets has also given us the better overall margins. Even on the API side, we have improved overall margins.

That has resulted in overall margin improvement on standalone basis, yeah. As far as Unichem is concerned, their overall EBITDA margins has declined from 12% to around 8%.

Their turnover has not moved up. That has resulted in overall otherwise EBITDA margins improvement for consolidated would have been further higher.

Okay. Just last one point, sir.

Whether this supply chain disruption or any impact on the raw material availability or the price rise, so that situation is already behind us or even the current quarter, subsequent period could see some impact in the FY27? See,

there is a significant improvement increase in the prices now. Let's say if you look at packaging material, aluminum has moved up.

PVC, PVDC has significantly moved up. On solvent-wise, if you look at, prices are still 40% to 50% higher than what we were paying in the month of January or earlier in the whole of the financial year.

Let's say prices of a lot of other API has moved up because of, again, some or other things is in the supply chain is disturbed. Overall, I see, for if current trend of petroleum prices remains, overall material cost should rise by almost around 10% to 12%.

That's that that looks like that that's the kind of price rise is there in the currently in the marketplace. say, simple product like paracetamol has moved up significantly, metformin has moved up significantly.

That movement is much higher than what number I am talking. I am talking of overall.

That overall is around 10% to 12% kind of overall increase is there in the marketplace now.

Practically the product prices have gone up higher than the input prices? The

I would say that these inputs has gone up, as against that, what is happening on the on our output, say, as far as API is concerned, what we are selling today, entire cost increase we are passing on to the consumers, or to the buyers, there are no issue. As far as the domestic market is concerned, product which are in price control, the prices remain at the same level.

You can't increase even a paisa on that. Overall, the other decontrolled product, as against 5% kind of price rise which we were taking, looking at the overall input cost increase, we this year price rise may be little higher, maybe around 6% to 7%, to offset the kind of price increase which has happened at the marketplace.

That will completely offset the entire overall cost rise which are there in the marketplace. As far as generic market are also concerned, the there the arrangements are little longer-term.

We are taking up with the buyers and increasing the prices wherever they are possible. I don't foresee much of that impact coming.

There could be maybe 0.5% point increase in the or maybe 0.75% increase in the material cost, but I don't think so that will disturb my EBITDA margin significantly in the current year because, again, the product mix change and that's playing, overall your margin, and therefore, I have given the projections also of guidelines for the EBITDA margin for whole of the year that it should it will move by around 1% to 1.25% in the current financial year. As against earlier, we were always talking of around 1.5% or a little more EBITDA margin improvement.

That's little lower guidelines is only on account of material cost. If the petroleum prices again start moving up lower, then probably margin could still be better.

Sure. Yeah.

Thank you, sir. Wish you all the best.

Thanks.

Good afternoon. Thanks for the opportunity.

Sir, I just want to know what is the outlook for the Unichem business? When do you think the margins will improve?

Unichem last financial year had their US business has not grown up mainly because on certain high-volume businesses, they have lost certain market share. They have again started gaining the market share, and I think, in current financial year, their US business should grow by around 10%.

Hopefully, with that, the margins will also move up. They have done well in European market in last financial year, and we also see from further from that point of view that business will improve and margins will improve there.

Plus, they have also incurred certain additional cost in last financial year because of their Ireland facility, there were manufacturing was happening, so that is closed. Some those people were also given the your package on severance and all those kind of things, so that cost also got debited.

All those productions are shifted back to India. That is also will result in a better margins overall on production of those products here.

Also, the overhead cost which they were incurring at Ireland facility, maybe around €4 million to €5 million, so that expenditure will also stop in the current financial year. Overall, there'll be better improvement in the Unichem also in the current year.

We foresee that I think Unichem margin may become around 12% to 13% in the current financial year from that level. From that level, again, in future years, as our filings in other markets start coming up and then we start launching product in other markets, margins will keep on improving.

Okay. This 12% to 13% that you mentioned, that is a overall margin for FY26-27?

For Unichem, yeah.

Overall the full-year margin, right?

Yeah.

Okay. Sir, the second question is, this inventory at Unichem seems to be on the higher side.

Last quarter also, I raised this question. You said there are some actions being taken, but the inventory remains more or less at the same level as 25.

Overall, I think inventory-wise, a lot of actions has been taken. If you look at the nature of business itself in case of Unichem, because it's a US business and supply chain disturbances all were happening, certain kind of inventory, the movement was taking longer time by ship and all that.

They have started shipping everything from ships instead of air shipment. Significant amount of air shipment was there in Unichem maybe a year back, almost around 40% kind of shipment was moving by air.

Now it's hardly around 4%, 5% kind of shipment are moving air. Therefore, the whole transit time has improved and the increase in all that.

That has little inventory has gone up on that account, but overall we don't see any kind of concern on that account. US cycle itself is little longer and their business is mainly US.

As far as Ipca is concerned, if you look at overall last 2 years, if you look at '25 and '26, by and large put together, our inventory is at the inventory and receivables entire there's hardly any money has been put in overall in working capital. Entire your cash generation is overall there is a accruals are there and there is hardly any kind of money has gone in working capital in last two financial year.

We have perfect control as far as your overall inventory cycles are concerned.

Sir. Sir, lastly, the question is on the Lyka Labs subsidiary.

The performance has been deteriorating, because last year you took a impairment for Krebs Bio. Will it also lead the same way, because the performance is really deteriorating quarter-on-quarter?

Let's say I should not be speaking for Lyka Lab. I think you should be talking to Lyka Lab on that part.

Otherwise, I see broadly if we look at, they have started marketing their injectables and animal healthcare products in the market. They have recruited a lot of field force.

It takes time. Last 2 years, significant amount of expenditures has gone in creating the more sustainable business.

Because of that, because of addition of field people, there is a on P&L account, there are pressures. I think journey is going very well as far as those the animal healthcare and the team which has launched and also the critical care team they have launched.

They are progressing well and we don't foresee much of concern on that account. Maybe that profitability is currently lower, but as the time goes, these team start maturing and business start building up, margins will start moving up there also.

Sir. Thank you so much.

Hi. Thanks for taking my question.

My first one was on the other expenses bit for Unichem, which saw a sharp increase this quarter. Was it primarily driven by an increase in R&D?

If you could also share what the R&D spend was for both Unichem and Ipca standalone as a percentage of sales FY26?

I think Unichem that other expenditure move has moved up is largely because of R&D, because they're looking at some kind of institutional business in US. Around four to five products has been technology transfers are given to third-party manufacturers, so that we can manufacture those products for US itself to supply to the for the government purposes.

Therefore, this quarter had around 10 to 12 crore of additional expenditure on account of those technology transfer triggered to the US of our supporting manufacturers. Other than that, there is hardly any kind of your exceptional cost.

The other expenditure by and large moved only on that account.

Got it. Sir, what was the R&D for Unichem and Ipca this year FY26 as a percentage of sales?

It's around the 3.71%.

Got it. Secondly, if you could just share the market-wise growth trends for the year gone by for both branded formulations and generics, particularly because this quarter we saw an increase in generic revenue, which market primarily drove that?

If you could just share some color around how the individual markets have performed. See,

domestic has grown by 12% for Ipca, branded formulation has grown by 14%, institution has declined by 33%, generic market in this quarter has grown by around 39%. That's overall Ipca is concerned.

As far as for whole of the financial is concerned, domestic has grown by around 10%, branded by 14%, institutional there is a decline of around 24%, and generics has gone up by around 17%, yeah. That is already given in press release.

If you go through our press release, all those numbers are very well displayed there.

I was looking for more market-specific trends, which you usually share, any particular market which drove growth this quarter or during this financial year.

Let's say branded is, by and large, driven by, let's say, our CIS market and French-speaking African market. India is, by and large, driven by our pain and cardiac and derma and uro and CNS portfolio what we have.

Institutional has, by and large, declined because of funding constraints currently being faced by institution. Generics are both Europe has done well, Australia, New Zealand has done well.

It's broadly all markets. Also the US launches which has happened in current year.

Overall, the business has been good as far as generics are concerned.

Got it, sir. Just a last one, if I could squeeze in, if you could just comment on the performance of subsidiaries ex of Unichem this quarter and for the full year.

As far as Unichem are concerned, I think current year was a tough for them, and I have already shared the guidelines as far as Unichem is concerned that how they will be performing in current financial year. They should be growing around 10% in current financial year and they will improve their EBITDA margins also.

Other than that, we have domestic subsidiary, which is called Trophic Wellness. They have done well.

I think they have significantly contributed. They are marketing nutraceuticals.

The business is around maybe around 125 crore, and I think they're generating profit of almost around 40 crore plus overall profit. That's that.

Lyka, I have already talked. It's not our subsidiary.

It's associate company. As far as the Krebs are concerned, their performance is improving now.

One of their plants, which is at Nellore, has started EBITDA positive. Other plant, there are certain concerns going on right now as far as pollution departments are concerned.

Once that is resolved, I think, hopefully, we should be able to put that plant also on EBITDA positive kind of number. As far as European subsidiaries are concerned, we have two subsidiaries in US.

One is Ipca Formulation Marketing Company and another is Onyx Scientific, which is doing the your business of rendering the research services to the other formulation company. Onyx is facing some kind of issues there because of overall inquiry levels for those kind of projects has gone down because of current overall environment.

This subsidiary has been last 8, 10 years has been doing very well, but last 1, 1.5 years, there are certain issues. We are now seeing signs of improvement there.

Ipca subsidiary, which is marketing the formulation in particularly in UK, that has given a loss of almost around two to three million kind of pounds, and largely because of last financial year the pricing scenario in that market was very, very bad. We are seeing now again there a lot of shortages and overall improvement in the prices, we hope to do better there also.

As far as US subsidiary is concerned, Ipca, it's only one which is major one, which is Pisgah Labs. There also the there is a formulation facilities under construction there.

I think probably, in the fourth quarter of the current financial year, they should be able to ready to commission the plant. Any meaningful turnover coming from there will be, I think, in next financial year only, not in current financial year.

Their API facility is also seeing now good order position now. Hopefully, there will be further improvement in that operations also, yeah.

Got it, sir. This is very helpful.

Thank you and all the best.

Thanks for the opportunity. Sir, on the exports front, you have guided for broadly 12% to 13% revenue growth.

Is this considering the currency depreciation as well, or is this in INR terms?

No, the guidance given is in INR terms, Tushar.

Got it, sir. As far as domestic formulation is concerned, given the raw material-linked price hike, but if you could at least share what could be the price, volume, new launches growth that we can expect for FY27?

No, the guidance given for domestic branded business is around 12%. Maybe out of that, 1% to 2% could be new product, and balance price increase and volume.

Understood,

sir. Tushar, if you look at our overall material cost to sales ratio of Ipca, is only 25%.

Even if there is a 10% increase, it does, yeah, that will get offset by overall your increase in the top line and also overall the profitability of your products in domestic, ROW, and all those kind of things. We don't foresee that this ratio will significantly alter, maybe only 0.5% here and there, yeah.

How has been the freight cost trending, or will that maybe at a gross margin level, I understood the it's possible to pass it on the increase in the raw material, but how to think about the freight or the logistics cost?

Normally, let's say our branded formulation business and certain API business, that all happens through, let's say, C&F basis. There are a lot of other generic businesses that happens on we are where the freight are borne by the parties.

Overall, I think our freight cost has moved up by almost, I think, in the fourth quarter by almost around 25%. That trend is continuing currently also.

That will have some impact on the overall on the profitability. Till the time this issue of your issue remains of Iran-US kind of conflict which is currently happening, Strait of Hormuz and all that kind of thing, oil prices are elevated.

Wherever air shipments are concerned, the freight has multiplied now. Even getting the, sometimes, the cargo availability of space also, it takes a lot of time.

Sometimes, material remain for 10, 15 days so availability itself is becoming an issue now to the various destination. That issue is remaining, yeah.

Then

effectively, will this have impact on Q1, but overall, we think that subsequently, in the coming quarters, we'll sort of come back

There'll be some impact of that, but to There will be some impact, but if business improvement is also there, but, say, last year, we have grown by 10%, this year, we are guiding for 12% to 13% growth. That growth will offset everything.

Understood, sir. Got it, sir.

Thanks a lot. Because

material cost to sales ratio is around 25%, if you take your overall gross margin addition itself will be high. All these costs should get offset.

Got it, sir. This is helpful, sir.

Thank you.

Since all questions are answered, we can close this conference call. Thank you, everyone, for participation.

Yeah.