Lupin Limited (LUPIN) Q2 2027 Earnings Call Transcript

Hello, and good evening. Welcome to Lupin Limited Q2 FY27 earnings conference call. Thank you for your participation in the call today. Please note that all the participants' line will be in listen-only mode, and there will be an opportunity for you to ask questions after the opening remarks. Please also note that this conference is being recorded. I now hand over the conference to the management. Thank you. And over to you, ma'am.

Hello, friends. Welcome to our Q2 earnings call. Joining me here are Nilesh, our managing director, Ramesh, our CFO, and Ravi, our head of investor relations. We are pleased to share performance for the second quarter, the progress we are making on our strategic priorities, and our outlook for the remainder of the fiscal year. We delivered another quarter of steady performance, supported by sustained momentum across most of our major geographies. Our organic revenue growth remained in double digits, driven by strong performance in India and other developed markets. Importantly, this growth reflects the increasing strength and diversification of our business, with multiple markets contributing meaningfully to our overall performance. We expect this momentum to continue into the second half of the year with organic growth of around 20% ex-US. On profitability, we delivered EBITDA margins of around 25% during the quarter, despite increased investments in R&D and a challenging geopolitical and operating environment. We remain committed to our fiscally at 27 margin guidance of around 24 to 25 percent, while recognizing that margins are likely to moderate in the coming quarters. This reflects intensifying competition in some of our key U.S. products, increased investment in our R&D pipeline, and higher input costs arising from the challenging microeconomic environment in the Middle East. Now I'll turn to individual business segments. Our U.S. business continued to navigate an evolving competitive environment during the quarter. As anticipated, competition in Tolvapton intensified with the entry of two additional genetic players. While our base portfolio benefited from higher volumes and contributions from seasonal products, these gains were offset by pricing pressures in certain products, particularly Tolvapton. We expect competitive intensity in Tolvapton to increase further, with the possibility of additional entrance over the coming quarters. For fiscal year 27, we continue to expect U.S. revenues in the range of $1.1 to $1.2 billion. Growth in our base business, our new injectable launches, and contributions from Petfield-Graston are expected to help offset the impact on increasing competition in key products. More importantly, our mid-to-long-term plan for the U.S. remains on track. Our priority is to double the share of complex products in our U.S. portfolio, with respiratory products, complex injectables, and biosimilars serving as key growth drivers. We are on track to file more than 15 products during the current fiscal. Over the next three years, we expect to launch more than 60 products in the U.S., including approximately 25 injectable and respiratory products, five biosimilars, and two to three 505B2 products. This pipeline represents an important step in reshaping our U.S. business towards higher complexity products, creating a more sustainable growth platform over time. Turning to India, our business delivered 14.7% year-on-year growth this quarter, with a core prescription business growing 13.8%, aided by volume growth of 6%. For the first half, our prescription business grew 14.4%, compared to 14.3% growth in IBM. Our chronic segment grew 19.5% ahead of IPM's 17.2% growth. Chronic therapies now account for around 66% of our portfolio, up from 65% in fiscal year 26. And we aim to increase this share to 70% over the next five years. Most of our key therapy areas outpaced their respective markets. In the first half, our anti-diabetes and cardiac segments grew at 1.5 times and 1.1 times their respective category growth rates. Our diabetes segment was a particular highlight, delivering 25% plus year-over-year growth this quarter, our third consecutive quarter of 20% plus growth. This performance was led by our market leadership in human insulin and the successful launch of semaglutide injection. The IPM market growth reached a six-quarter high of 14.7% in Q2. We are very well positioned to capitalize on this momentum and remain confident that our India Formulations business will grow at 1.2 times to 1.3 times the IPM growth rate, supported by a prescription sales force of nearly 11,400 people and a pipeline of more than 80 new product launches over the coming years. Looking further ahead, our target is for novel proprietary products to contribute one-third of our India revenues within the next 10 years. We will build this portfolio through in-house development and in licensing, drawing on our partnership, track record, and our brand building, development, regulatory, and clinical capabilities. We were very pleased to get approved for the first green propellant MDI in India this past week. Our other developed markets, Europe, Canada, and Australia, delivered 46% year-on-year sales growth this quarter and accounted for 15% of our revenues, compared with 11% in fiscal year 26 and 14% in Q1 fiscal year 27. Within this, our European business sustains strong momentum with 45% year-over-year growth. During the quarter, we entered into an exclusive licensing partnership with TenPoints Therapeutics to commercialize UVEC in Europe. This once-daily dual-agent eyedrop for presbyopia advances our ophthalmology portfolio and builds on our strategy to expand specialty care through innovative therapies that meet unmet patient needs. Europe remains an under-indexed market for us with a clear pathway for growth across complex genetics, biosimilars, and specialty. We are very pleased with the strong foundation we are building in Europe on the ophthalmology front to the recent acquisition of Vizio Pharma and the addition of UEDC in the near future. Turning to R&D, R&D remains central to our growth strategy, with investment at 7.9% of sales this quarter focused on complex and specialty platforms. The tentative approval of our novel Apexaban oral suspension through the 505B2 pathway during the quarter underscores the strength of our R&D capabilities. Our pipeline includes more than 55 injectables and respiratory products under active development. We're also preparing to file four to five biosimilars for the US market over the next few years. We have built a strong 505B2 pipeline with product launches expected to begin this fiscal year and a potential launch of Apexaban oral suspension in fiscal year 28. For India, we continue to strengthen our innovation portfolio through in-house development and in-licensing of late-stage assets. Quality and compliance remain fundamental to our business. At Pthampu Unit 2, we have submitted our responses and remain on track with our remediation efforts. We are very pleased with the outcomes of the inspections we have had this calendar year across our network. We are fully committed to upholding the highest standards of compliance across our sites globally. In closing, we remain on track to achieve our fiscal year 27 revenue growth and profitability goals as we navigate an increasingly competitive operating environment. We are investing on multiple fronts, including building scale to capture the growth opportunities in India. Enhancing our specialty capabilities in Europe, and tapping the growing biosimilar opportunities in the U.S. This, coupled with a strong pipeline, provides a firm foundation for sustainable growth and a more resilient business going forward. With this, I will hand it over to Ramesh for a detailed analysis of our financials.

Thank you, Vinita. Friends, I welcome you all to our Q2 FI27 earnings call. As you may have seen from the results, this has been a steady quarter for the company, with results within the overall guidance we shared in our last interaction in August. Whilst revenue from operations has grown at a healthy 11% year-on-year, the overall margins have been impacted by the additional competition we have witnessed in some of our key products in the U.S. Diving into the numbers, total revenues from operations, including other income for Q2FI27, came in at 7,827 crores as compared to 7,048 crores in Q2FI26 last year, a growth of 11% year-on-year. Amongst the key markets, the U.S. grew by 9.3% year-on-year, India grew 14.7%, other developed markets grew around 46% year-on-year, and API grew about 20% year-on-year. Emerging markets declined by 4% year-on-year. As Vinita mentioned, our organic growth was in double digits, highlighting the resilience of a diversified business model. Speaking about the U.S. business, this quarter, the U.S. business recorded USD $317 million, a decline of 13.4% quarter-on-quarter on constant currency basis. The quarter-on-quarter decline is largely due to the increased competition and loss of exclusivity on some of our key products like Mira Bigron and Tolvapton, harshly offset by seasonal demand and volume growth in some select products. Whilst we continue to benefit from our differentiated strategy on focusing on complex products, as indicated in our earlier interaction, we see the U.S. business significantly impacted in the short term and the increased competitive intensity of some of these key products. This will be offset with the commercial launch of our biosimilars portfolio in the U.S. this year, and from the anticipated launch of Apixaban oral suspension, of which we received tentative approval this quarter. I would like to mention that we have a rich pipeline including complex injectables, respiratory products, exclusive first-to-files, biosimilars, and Firefly B2s, which will augur well for the long-term growth of our U.S. business. Turning to India, the region business grew by 14.7% year-on-year during the quarter. Within this, our core prescription business grew by 13.8% year-on-year and 14.4% year-on-year during the quarter and H1 respectively. Key segments like diabetes, cardiology, and dermatology handsomely outperformed their category growth at 1.5x, 1.1x, and 1.5x respectively during the first six months, whilst volume growth has been a healthy 6.1% during the same period. The chronic segment grew by 19.5% in H1 vis-à-vis IPM growth of 17.2%, and the chronic share in the mix has increased to 66% in H1 FI27 from around 65% in FI26. The share of in-license product is around 6%, similar to FI26 levels. We launched 12 products in H1 FI27 and plan to launch about 20 products in FI27 vis-à-vis 15 products which we had launched in FI26. We remain confident that our India Formulations business will continue to outperform IPM by 1.2 to 1.3x, supported by a strong sales force of more than 11,000 people and a pipeline of more than 80 new product launches over the coming years, including innovation in in-house and in-license products. Other developed markets are concerned. Revenues in other developed markets were Rs. 1,182 crores, representing a growth of 46% year on year. This is led by strong sales in Australia, Canada, and Europe. We are focusing on various strategic initiatives to grow our business in this segment, especially in Europe going ahead. Other emerging markets degrue by 4% year-on-year in this quarter, with lower sales in Brazil, offsetting double-digit growth in markets like South Africa, Philippines, and Mexico. Turning to the P&L, other operating income at Rs. 42 crores as against 216 crores in Q2, FY26, this decrease of 81% is primarily due to the lower export benefits from the PLI screens during the quarter. Turning to the gross margins, gross margins came in at 74.2% as compared to 73.3% last year and 74.6% in Q1. Whilst margins have sequentially benefited from increased volumes, cost initiatives, and higher profitability in India, we have also seen downsides from increased competitive intensity on some key products in the US and elevated geopolitical risks in the Middle East. Employee benefit expenses at Rs 1,424 crores increased around 29% year-on-year from 1,106 crores in Q2 to 526, translating to 18.3% of sales as compared to 16.2% in Q2 last year. This change is largely attributable to higher costs due to regular annual increments and business growth during the year. Q2 FY27 manufacturing and other expenses came in at 2,438 crores, increasing around 23% year-on-year from 1,980 crores in Q2 FY26, translating to 31.3% of sales besides 29% last year. The expenses were mainly higher due to higher volumes in the normal course of the business, higher agenda expenses on account of field expansion, and license fee payments as part of our settlement agreements. R&D at 618 crores is 7.9% of sales as compared to 522 crores in Q2 last year. On a H1 basis, R&D was 1226 crores representing 7.7% of sales. For the full year, as indicated, we expect R&D to be around 8%. EBITDA extruding forex and other income was 1,957 crores vis-à-vis 2,138 crores in the same period last year with a margin of 25.1% vis-à-vis 31.3% last year in the same period. For the full year, as indicated in our earlier interaction, we expect EBITDA margins to be around 24-25%. ETR. Turning to the tax rate, ETR in H1 was 28.5%. For the full year, we expect ETR to be around 27-28%. Going on to the balance sheet, operating working capital stands at 7,542 crores as the 30th September against 7,132 crores as the 31st March. This translates to 87 days of working capital against 90 days in the previous quarter. Net cash stood at 3,349 crores as against 4,636 crores as this 31st March, largely due to the closure of our Vishu Pharma acquisition and dividend payout. Whilst we focus on increased cash generation for our business, we'd like to highlight that we continue to explore strategic allocation of our capital to ensure the long-term mission of the company, including on the specialty front. On the ESG front, our ESG agenda continues to make strong progress in Q2FI27. We achieved zero base to landfill certification across eight manufacturing sites, including seven platinum rating advancement to circular ambitions and enabling more responsible management of waste and resources. We also strengthened responsible accounting through sourcing through ESG assessment of 130 suppliers, whilst advancing diversity and leadership development. With this, I hand it over to the floor for questions.

Thank you very much, sir. We will now begin the Q&A session, requesting all the participants who wish to ask questions to raise their hands on the participant tab on the screen. We will wait for 30 seconds for the queue to assemble. Thank you so much. Thank you for your patience. We'll take the first question from Dara Ganatra.

Hello. What are you doing?

Yes, you are. Thank you.

Thank you. So my question was on the gross margin front, sir. So as Cholwapton and Mirabrigron being the exclusive products, as they have come off in this quarter, and we are clearly seeing that with the decline in the revenues, the same impact has not been reflected on the gross margin side. So what is the other offsetting factor that explains this?

Ramesh, will you take that? I just wanted to clarify that the decline is primarily Tolvapton. Mirabegron has been relatively stable. Please go ahead, Ramesh.

Yes, thank you, Vinita. Yes, as Vinita was saying, it is clearly because of that in the Americas. But there is a mixed change in other parts. And moreover, there has been tailwinds in terms of forex associated with, in fact, the gross margins. And that's the reason why you actually say that the gross margins are more or less slightly on the higher side besides the previous quarter. I mean, besides the previous quarter, there's a decline, but it's not so steep.

Sure, sir. Thank you. That's all from my side.

Thank you so much for the question. The next question is from Shashank Krishna Kumar.

Hi, thanks for taking my question. Vinita, I just wanted to understand on Apexaban, now typically the way reimbursement works for some of these 505 B2 products, there could be a few challenges with respect to getting reimbursement codes assigned and then getting coverage. Do you anticipate any of those challenges post-launch in the first few months? Could there be a lag in terms of the product gaining traction and revenue getting recognized?

Yeah, I mean, the differentiated products, 505B2s are obviously not the same as substitution genetics. So it is incremental effort, additional effort on gaining market access. But our team has been working hard building the right expertise and the right relationships into the channels that we target for the product to be able to gain share on a rapid basis. We still expect it to be a buildup, you know, over the months and quarters. We expect to launch the product first quarter of fiscal year 28. And as we gain traction in the channels that we've targeted, we expect the share to build up.

Got it. Thank you. That's helpful. And the second one, if you could just comment on the progress that were made with respect to some of our respiratory filings, Respimat, Ellipta platform, etc. Where are we in terms of, I think we're guided to close to seven filings this year. So if you would just update on the progress there.

Yes, so we have made really good progress on Raspimat. Exhibit batches are done, and the filing is this fiscal year on Spiriva Raspimat. And on the Ellipta franchise, we've had good progress on the Brio product. So that is expected to be filed later this fiscal year. It probably will slip, you know, a couple of months into first quarter next fiscal year, but the seven to eight products that we targeted with these two plus the MDIs remain on track to be filed within this fiscal year or within a couple of months of the end of the fiscal year.

Got it. Thanks. And just the last one, if I could squeeze in. So R&D spend, obviously, for the current year, would guide it to around 8%. Now, what we've seen in case of some of our peers is probably some optimization of R&D spend, which also has been happening. So probably sometime next year, FY28, is this also a line item which you could probably look to optimize, given where margins might stand at that point? Or given your focus incrementally on complex filings, you expect R&D spend to sort of remain in this range.

We will take a look and have been reviewing the R&D spend to determine what's the best way for us to maximize our opportunities while not compromising on the material products. And as we are investing into commercialization in a few areas, like a specialty in Europe, as well as 505B2, like Apexaban and biosimilars, we are looking to moderate and optimize on the other lines, including R&D.

I got it. That's very helpful. Thank you and all the best.

Thanks, Sushant, for your question. We'll take the next question from Beeno Padiparambil.

Hi, good morning and good evening. Vinita, what are your thoughts on FI-28 US revenues? Would you be able to match the FI-27 number or will there be some decline?

Um, you know, I'd say that revenue should remain at a billion dollars plus, which is kind of a bar for us that we want to be able to maintain, of course, you know, in terms of matching the level of fiscal year 27. I mean, we have some pressures with Tolvapton coming off, you know, with additional competition. And post-September next year, we would expect additional competition on Mirabegron. Of course, Apexaban, Talbovansin, and the biosimilars, in particular, Petrograstim, you know, should help us grow. But we hope to be able to be at least at a billion dollars plus. And as we look out in fiscal year 29 and get the full year impact of some of these more durable pipeline products, we would expect the business to grow.

Got it. Do you have a filing of Atenocept in the U.S., and what's the status?

Yeah, we are in a very good position with Atenocept across the world, and are expecting to file later this fiscal year in the U.S.

Okay. Now, what would be the timeline? Would you be in the first wave, and what would be the timeline for that? Yeah, we expect to be in the first wave. In 29. Okay. And last question, the rope and other markets revenue seem to be pretty weak this quarter. If I adjust for Visu Pharma, it seems to be even down why. Why? Is there any particular reason for that?

Actually, Europe was a pretty strong double digit, even without Visi Pharma. The other markets, you know, in particular, Latin America and Brazil, we had additional competition in DAPA that we had tremendous upsides over the last two years. That was primarily the reason for the decline in the emerging market revenues.

Okay, I'll jump back with you. Thank you.

Thanks, Bino. We'll take the next question from Neha Manpuria.

Yeah, thanks for taking my question. Ramesh, on the gross margin number, you know, if I look at the FX, the FX hasn't, you know, increased materially caught on what I think it's up like a percent and a half odd. So, you know, probably I think, Vinita, if you could just give us some color on what's the exit or wrapped in market share that we have just to make sense of the, you know, gross margin number and how we should think about it going forward. And is it fair that we're expecting one more competitor to come through in Tolvapton in this quarter?

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

Understood. Ramesh, in this context, is FX the only reason why we've been able to offset the Tolvapton impact on gross margins?

You know, so when I actually spoke about Forex, it is in the context of forwards that I'd taken in the first quarter. So when we actually started here, it was at, if you recall, around 89-90. Essentially, some of the forwards were around that range. So I actually had a depressed overall realizations for the first quarter, which is not there in the second quarter. So that's the reason. That's what I meant by tailwinds in the second quarter.

Okay, understood. So as I think as we go forward, this should probably unwind itself a little bit as the, you know, INR stabilizes.

Absolutely.

Okay, understood. And my second question is on Apixaban. You know, Vinita, I know you said that it's too early for us to say as to, you know, what could be the share that we could take, etc. But in your assessment, you know, how easy is it to, you know, launch a 5-5-B to take this share? When you say incremental effort would be required, would this also mean investment on the ground or additional investment that we would need to make in the coming quarters before the launch?

Yes, we are planning to make additional investments in the next couple of quarters to be able to get the right market access and channel expertise and relationships to be able to, you know, build share in the exclusive window that we have prior to the generics coming in. And we would expect to retain some share after the generics come in, in particular in segments that benefit from a liquid dosage form. So we have built in incremental efforts on the commercial front to be able to build share.

Understood. So to that extent, given this is a differentiated dosage, this could be slightly more durable even after generics come in in fiscal 29.

Yes. I mean, that's what we're expecting. You know, as we look at the 505B2s, the thought is that you get a longer window in terms of, you know, from a business and margin perspective relative to your exclusive genetics.

Understood. That's very helpful. Thank you so much.

Thanks, Neha. We'll take the next question from Kunal Damesha.

Hey, hi. Can you hear me?

Yes, we can. Yeah.

Yeah. Thank you for the opportunity. Vanita, on the Apixaban strategy, would it be focused more on B2B customers, you know, getting the formulary access and then leading to substitution? Or would it be more B2C kind of strategy? What are the initial thoughts?

It's more targeted on, you know, channels where we believe that we can impact, you know, through the efforts that we make as opposed to a direct B2C. It would be aspirational to get products. And this would have been a good one if we had multiple years before other genetics got in to do B2C.

Sure. Thank you. And one for Nilesh on India business, we are suggesting that we'll be growing around 1.2 to 1.3 times. But if I look at H1, we are more or less around 1.1 times. So what are the drivers of acceleration here for us in H2?

Yeah, so for H1, we're actually 16% ahead of the market, but definitely not where we need to be. I think the, I mean, we've seen in ResPree in particular, very slow growth. That's definitely pulling down the average. Cardiac has slowed a little bit as well, but we continue to be well ahead of the market. Diabetes is where we're obviously excelling. We expect Respey to pick up. I mean, usually the second half is better for Respey, so we expect Respey to pick up now, and I mean, there's no reason why Cardiac should not bounce back as well. Our goal is, you know, 20 to 30% ahead, so we are short of that, but I mean, we've got some new launches. We've got, obviously, the business is doing well. I mean, the entire chronic share is so solid. Obviously, we would expect to build back growth.

Sure. In recipe, this slowdown, is it more on some of the tablets, etc., or is it more on the inhaler side that we are witnessing?

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

Sure. And lastly, on capital deployment, we have some room to kind of, you know, liver up to add inorganic, you know, growth liver. So what are your thoughts in terms of capital deployment priorities beyond capital expenditure?

You would like me to take this question, Vinita? Yes, please. Yeah, so clearly, you know, we are an acquisitive company, but we would obviously be judicious in our choice of, you know, of investments. So based again on the proposition, our first choice obviously would be speciality in various parts, Europe, America, and equal importance to acquisitions in India, but only at a cost which is, you know, which is appropriate from our perspective.

And, you know, will there be a very active pipeline that we would be looking at right now?

We have entered the OfTel space and clearly we'd like to grow in that space across the globe. India, of course, based again on the proposition. So in our overall capital, we would keep the threshold limits of twice the EBITDA, so to speak. So that would potentially mean about 16,000, 17,000 crores for debt and about 3,000, 4,000 crores that we have on our balance sheet. So we could go up to 20,000 crores, really, but the proposition should be compelling enough.

Thank you for your question. The next question is from Kunal Randhiriya.

Hi, good evening. See, first question on Zyvav. I believe your litigation is still on with the innovator while one of the Indian filers has already settled. So my question is, is this an FY29 opportunity for you? And do you expect a sole exclusivity or a shared exclusivity?

Well, it's not a FI29. It's a further out opportunity, Zyway in particular, and we believe that we were sole exclusive. We were first to file. Of course, our brand can always launch an AG or partner with companies that they settle. I mean, we don't have privy. We're not privy to those arrangements.

Got it. Got it. And Meeta, are Dulera and Diazepam nasal sprays still opportunities for next year? And can they be meaningful?

Yes. I mean, we are expecting Diazepam for certain, but hopefully Dulera also, depending on the queries we get from the FDA, hopefully is an opportunity next year or early the fiscal year 29.

Got it. Got it. And just one more clarification on Apexaban. I believe you may have a 10-month window before the Andar genetics hit the market. So are you confident of maintaining and perhaps even enhancing your FY28 Apexaban revenues in 29 and 30?

We hope so. We'll learn a lot through this launch, you know, because the time we had prior to genetics coming in is going to be likely the most valuable, but we expect to retain share, especially in the channels where the liquid dosage form brings real benefit to patients. So we hope to have a tail in the coming years.

Right, right. Thank you very much. This is very helpful. All the best.

Thank you.

Thanks, Kural. Before we get into the next question, this is a reminder to request all the participants to raise their hands from the participants tab for more questions, please. We'll take the next question from Shyam Srinivasan.

Yeah, good evening. Thank you for taking my question. Just one on as you prepare to launch these five biosimilars in the US, what are some of the learnings that you're seeing the first wave guys have gone through the challenges? And when you arrive in the markets, what are you trying to do differently to kind of achieve the kind of stated shares that you have probably achieved on the small molecule side? Is there something that you need to keep in mind from a philosophy perspective of how we approach biosimilars in the US?

Yeah, I mean, learning so far, and, you know, obviously, we have a lot more learning to do once we get into the market with these products. I mean, our first one, Pegville Grass Tim, has launched through our partner, Valorum, so certainly looking forward to learning from that experience as well. But as we have seen companies, you know, in the market over the last couple of years, I mean, it's pretty clear that the, you know, what tactics and strategies succeed on the biosimilars front are very different from small molecule. I mean, it's the erosion on the pricing standpoint, discounting by manufacturers really doesn't help much on the biosimilist front relative to, you know, our small molecule genetics. And, you know, one really needs to very carefully look at the incentives to the payers on the biosimilars front that really drive substitution of biosimilars. But, I mean, you know, we are very pleased that we are going to ramp up these products over the next few years at a time when there is significant openness, you know, relative to five, eight years ago, biosimilars were still nascent. And today, there is a pretty active and, you know, adoption of biosimilars in the marketplace and a lot of learnings of companies that have exited products as well as come back into the market with different strategies that, you know, really inform how we launch the products that we plan to launch over the next few years.

Got it helpful. Just a second question on your US guidance. So we have done one half at 683 million, right? So even if I take the midpoint of your full year guidance, 1.1 to 1.2 billion, we are talking about like a quarterly run rate of 230 million per quarter, right? Maybe quarters could vary. But is that the kind of like 100 million? Do you think Q2 probably has come in far better than what you thought? So if the reason to just hold on to the guidance, maybe is there upside risk is the question I'm asking.

Q2 was above our plan. Q1 also was above our plan. And therefore, we will maintain our guidance and we'll see if we get any upsides to it.

Got it. Last question on the India business. I think prescription business was called out at 14% with 6% volume growth. Chronic business growing faster. So if you could help us disaggregate how the chronic business volume growth has been happening as well. And if I were to kind of just keep overall anti-diabetes out, I'm just saying since it's a category, especially semi-glutad, it started this year. So I just want to see X of that, if you could give us some qualitative color on the growth, please. Thank you.

I have the value. I don't have the volume. I mean, the volume growth, like you said, H1 is 19.5%, Q2 is 17.4%. The volume overall mat is 8.6%, and H1 was 6.1% volume growth. I would presume that most of it would be from chronic only, and the semaglutide number is not very large, where the third largest generic, but the semaglutide number is not very large in that volume, so I would presume that the volume would be very close to that, but if you want a more specific answer, we can get it to you.

No problem. Thank you, and all the best.

Thanks, Sham. We'll take a pause for 30 seconds for the queue to assemble.

Thank you so much.

Thanks for the patience. We'll take the next question from Rashmi Shetty.

Yeah, thanks for the opportunity. Vinita, what is the addressable market size of Apexab and oral suspension?

I mean, the overall brand is 10 plus billion dollars, right? And we have certain channels that we have targeted that are a good percentage of the market.

Got it. And is it fair to understand that, you know, the EBITDA margin won't be similar to the substitutable Gendrix exclusivity?

You know, the EBITDA margin, I would say, should be fairly attractive. We are expecting, you know, margin-like exclusive product, but with some investment on the commercial front.

Got it. And for the full year, you know, as you've given the guidance of $1.1, $1.2 billion for the U.S. market, for FI28, when you're saying that, you know, you would be able to maintain at least, you know, $1 billion plus, that includes your EPIC7 estimates?

Yes.

Okay. Thank you. That's it from Maisli.

Thanks, Rashmi. We'll take the next question from Tushar Manudani.

Thanks for the opportunity. Ma'am, if you could share your thoughts and further development work in the peptide segment, apart from whatever we have launched for the regulated markets, specifically U.S.

Yeah, so on the peptide front, the products that we have launched so far are glucagon and liraglutide. And, you know, as we look at the next couple of years, I mean, glucagon and, you know, liraglutide will continue to be the material products. You know, we don't expect to get products like semaglutide and others, a newer peptide, the GLP-1s, into the market anytime soon, just given the patent expiry is, you know, beyond the five-year timeframe for those products. But in the near term, I mean, the injectable products that are turning out to be really attractive for us, Rispital Consta is one of them, Sagamadex that we just launched, you know, is a nice opportunity for us. And Dalba Vanson, both the 505P2 as well as generic opportunities are nice opportunities for us. And then, you know, broadly, I mean, we look at biosimilars, also injectables. We see larger opportunity on the biosimilars front, even compared to injectables in the next three to five years.

Got it now. And similarly on the iron colloid side?

Yeah, we expect some niche product launches on the iron colloid side as well.

If you could share without getting into product specific detail, but let's say address will mark it and the timeline to launch.

Maybe we'll get back to you. Ravi's team will get back to you with additional details there.

Sure. Thanks, thanks. That's it for me.

Thanks, Sushar. We'll take the next question from Forum Parikh.

Hi, thank you for the opportunity. My first question is on the company level EBITDA margin. So since we have mentioned about a couple of pipeline products, and Apexaban launch would be there in FY28, whose margins would also be like an exclusive product margin. So my question is, do we see a company level EBITDA margin going back to 29-30% in a span of like five years with so many products in pipeline?

I'll take this question. Yeah, if you were to take 2930, clearly, we would get to those levels. There's, of course, the investments coming up on a host of things. And, you know, given the fact that some of those areas that we're getting into have much very good realizations, the FIFIB2s, you know, the biosimilars portfolio, the specialty products across the globe, including USZ and all of that really scaling up, we could get to those levels. So secular growth is kind of expected over several quarters, whilst the 28 period could potentially be a period of consolidation, so to speak.

Sure. And also, on the US run rate, if you could highlight something like in FY29, I understand in FY28, we have Epic 7. But in FY29, with the help of specialty and complex injectables and respiratory products, would it be fair to assume that we will maintain a $1 billion run rate?

Yes.

Okay, and my last question is on the India market. So, I read in the presentation that on the chronic side, we will max out at 70% and we have already achieved 66% of our chronic contribution. So, assuming that we will achieve 70% target in near term, so we will not go beyond 70% on the chronic side. Is that a fair understanding?

I would love to prove you wrong. I mean, our plans are adding up to that 71%. That doesn't mean that we're going to stop there, right? I mean, we are a chronic story. So that's where the growth will come from. And consistently, the growth on that side has been higher. There are acute or semi-acute parts of our India business as well. So those will grow as well. But the focus remains on chronic. And therefore, theoretically, that chronic share will keep growing.

Sure, that's helpful. Thank you. Those were my questions.

Thank you, Forum. We'll take the next question from Alankar Garudi.

Hi, thank you for the opportunity. First question, Vinita, are you evaluating the possibility of a partner for a Pixabend?

We looked at all opportunities and options and believe we have a really strong commercial strategy here.

And on the manufacturing front, given this product is filed from Somerset, do you think there is enough capacity available to drive the best outcome in FI-28?

Yes, actually, our team has worked very hard on it, you know, global operations and supply chain team, as well as Somerset team, to ensure that we can meet our upside scenario.

Got it. And the second question, Ramesh sir, on the cost side, are there any levers available, maybe some discretionary spends which you might have incurred over the past couple of years which could reverse as TOLVAP10 contribution comes down further?

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

I understood. So basically, these are more about productivity gains rather than any discretionary spends coming down or maybe staying flat on an absolute basis.

Well, discretionary spends, you know, so you say essentially with better ways of, you know, looking at their ways of looking at productivity, you know, so clearly, you know, with advent of technology and the like, a number of things would be made possible.

Got it. That's it from my side. Thank you.

Thank you, Alankar. So since we have time for one last question, may we request participants to raise their hands from the participant tab. We'll take a pause for 15 seconds. Thank you. Thank you very much for the patience. Since we don't see any raised hands, I'll now hand over the conference over to the management for their closing comments. Over to you, ma'am.

Thank you. Well, thank you, friends, for all your questions, and hopefully we were able to give you all the answers, and otherwise our team will be in touch with any additional clarifications that you need. As you can see, and hopefully what you heard, we remain confident in growing our business in a more sustainable manner going forward. The investments that we are looking at in areas like specialty, in particular for Europe, as well as biosimilars and Pfizer 5B2s give us the confidence that we should be able to evolve our developed market business. On more durable, more sustainable portfolio going forward, you know, as opposed to the one-off exclusives. And our consistent performance and increased investment in India continues to be a very strong anchor for our growth going forward. So we remain very excited about our prospects over the next five years and look at the next year as a year of investment and building capabilities to build a more resilient business going forward. Thank you again for your time today, and we look forward to connecting with you soon.

Thank you, ma'am, and thank you to all the participants. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us, and you may now exit the webinar. Thank you.