Marksans Pharma Limited (MARKSANS) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to Markson's Pharma QNFI 27 Earnings Conference Call, hosted by Time Capital Advisors Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference has been recorded. I now hand the conference over to Mr. Nithin Agarwal. Thank you, and over to you, sir.

Welcome to Marks & Farmer's Q1F27 Post-Results Earnings Call, hosted by Dam Capital Advisors Limited. On the call today, we have representing Marks & Farmer, Mr. Mark Saldana, founder and chairman and managing director, and Mr. Jatindra Sharma, chief financial officer. I'll hand over the call to Mark to make the opening comments, and then we'll open the floor for questions from there on. Please go ahead, sir.

Thank you, Nathan. Good afternoon, everyone, and thank you for joining us for our Q1FI27 earning conference call. We sincerely appreciate your interest and continued support for the company. Q1FI27 has been a very strong start to the year for Marksons. We deliver 841 crores of revenue, up 35.6% year-on-year. With our highest-ever quarterly EBITDA of 213 crores and highest-ever quarterly PAT of 159 crores, alongside our cash balance crossing 1,000 crores for the first time. We've been investing in our products, manufacturing capabilities, customer relationship, and international presence for several years now. And we are increasingly seeing these investments translate into growth, profitability, and cash generation. Europe has been a strategic highlight of the quarter. UK and Europe delivered the highest ever quarterly revenue of 356 crores, growing 74.7% year-on-year. Over the last several months in Europe, we have moved from our primary existing channels to building our own front-end presence across key regulated markets. During the quarter, we completed the acquisition of Clinic BV in Netherlands, which contributed approximately 44 crores of revenue in Q1. Even excluding this contribution, the region grew strongly by 53.1% here on earth. We then completed the acquisition of ABC Now GmbH Germany, with consolidation commencing from Q2. Alongside these acquisitions, we have established Marksense Pharma Europe in Ireland and Marksense Pharma GmbH in Germany. Europe is becoming an important new growth market for Marksense, and we remain focused on progressively scaling our presence across the region. Talking about our other key reasons, in North America, we delivered 377 crores of revenue, growing 15.1% year-on-year. This quarter saw a softer demand through the summer months in line with a normal seasonal pattern. Price erosion in our ex-portfolio remained in single digits, and in the coming quarters, we expect momentum to strengthen. We have also established our presence in Canada with product filings underway. In Australia and New Zealand, we delivered 88 crores of revenue, up to 33.7% year-on-year. This was in line with a normal seasonal pattern, following a particularly strong fourth quarter during the southern hemisphere of winter. The underlying business remains healthy, and we expect momentum to build as we move through the year. The improvement in the company's profitability is equally encouraging. The benefits of operating platform we have been building over the last several years are increasingly visible in our profitability. Our focus for the rest of FY27 is clear. Carry this momentum forward, scale across geographies, accelerate new product launches, build out on the European market, and continue improving the profitability and cash generating ability of the business. We remain disciplined in how we allocate capital and selective about our inorganic opportunities. We remain confident about creating a business that is scalable, resilient, and positioned to deliver sustainable long-term value for all our stakeholders. With this, I hand it over to Jitinder, who will take you through the financial performance in detail.

Good afternoon, everyone. Let me take you through the financial performance for Q1 FY27. Operating revenue for Q1 FY27 stood at Rs. 840.8 crores, up 35.6% year-on-year from Rs. 620 crores in Q1 of FY26. North America remained our largest market, contributing Rs. 377 crores. Up 15.1% year-on-year, and accounting for approximately 45% of consolidated revenue. UK and Europe delivered Rs.356 crore, representing 74.7% year-on-year growth, and approximately 42% of consolidated revenue. This was the highest ever quarterly revenue for the region. Europe also began contributing meaningfully during the quarter. Following the acquisition and consolidation of Cleric, while the underlying UK business continued to show strong momentum. Australia and New Zealand delivered Rs. 88 crore, up 53.7% year-on-year. The sequential moderation was in line with the normal seasonal pattern. Following a particularly strong fourth quarter, the underlying business remains healthy, and we expect momentum to build as we move through the year. Threats of work contributed Rs. 20 crore during the quarter. Gross profit stood at Rs. 497.3 crore, up 38.9% year-on-year, from Rs. 358.2 crore, while gross margin improved to 59.1% from 57.8%, an expansion of 138 basis points. Sequentially, gross profit increased from Rs.465 crores. The gross margin expanding by 478 basis points. The improvement was supported by favourable product mix, lower cost materials held in the inventory, and favourable foreign exchange. EBITDA stood at Rs. 213 crore, compared with Rs. 100.1 crore in Q1 FY26, representing 112.8% year-on-year growth. EBITDA margin expanded to 25.3%. From 16.1%, an improvement of 919 basis points. Sequentially, EBITDA increased from 195.4 crore, while EBITDA margin expanded by 251 basis points. The improvement reflects the benefit of higher gross margin together with operating leverage. Profit after tax to debt, Rs. 159.4 crores, compared with Rs. 58.2 crores in Q1 and FY26, representing a 173.9% year-on-year increase. FAT margin improved to 18.4% from 9.3%. Sequentially, FAT increased from 149 crores in Q4 of FY26, with FAT margin improving from 17.4% to 18.4%. Moving to cash generation, we generated Rs. 185 crore of cash from operations during the quarter. After net capex of 33 crore, free cash flow stood at Rs. 152 crores. Our working capital cycle improved to approximately 132 days, compared with approximately 159 days in Q1 of FY26 and 138 days for Q4 of FY26. R&D spent for the quarter was Rs.23.2 crore or 2.8% of consolidated revenue, compared with Rs.12.1 crore and 2% in Q1 of FY26. We ended the quarter with a cash abundance of 1058 crores, compared with Rs.711 crore at the end of Q1 of FY26. While the net cash stood at this 1031 crore, This was achieved despite the payment towards the 20Q acquisition during the quarter. With that, we would like to...

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ahmed Mada from Unify Capital. Please go ahead.

Yeah, thanks for the opportunity, and congratulations on that great performance. The first question was on the line of the clinic acquisition. The disclosures registered to the transaction was done on 1st June and was completed on 17th June. So, the revenue recognition, can you give some sense how it has been accounted? And for the full year, how do you see both the acquisitions as well as your organic efforts and your business panning out for FIT 2017?

Ahmed, the effective date for the transaction was 1st of April 2026. So we have consolidated the first quarter numbers in our June quarter consolidated financials. We expect Clinique will do around 150 to 175 crore in terms of revenue overall for the year.

And Europe job group as a whole, with two acquisitions and your organic efforts, how much the delta will be over and over the clinic number you guided for?

Yeah, so obviously we expect to grow from what clinics have historically done, and, you know, they have done slightly below 10 million euros, we expect to. This year by around between 14 to 15 million euros, that's nearly about 40% above. So we do expect Europe to be somewhere around 180 crores, you can put it at 180 crores.

But on the gross margin front, obviously, this was probably the highest gross margin we've reported, maybe outside of COVID period would be the highest. So how should one think about it in terms of the product mix? Obviously, you have low-cost inventory, which you have flagged out in your presentation. Some of the high-cost inventory may be procured as of current moment with higher solvent costs. So, how should one think of the gross margins and the pricing, if you are able to improve, and so on?

So, obviously, it's a very slow situation, and you're right, we were sitting on good inventory, which, you know, we are depleting over time. We still have some inventory, but there are obviously other parameters within the war, due to the war, which is... which is having an impact like freight or some higher cost of raw material coming in. We do believe that as of when this war does end, it will go back to its normal levels relatively very fast. And so far, we are leveraging that inventory that we have. And, yeah, in terms of sustainability of that 25-odd percent, I think we should be around 55-56 percent gross margin.

Sure. And I think working capital has come down meaningfully, so there will be some sort of inventory unwinding that will have happened, I'm assuming. So, is that the case, or is there any other angle to it?

No, that's the case.

Lastly, on the U.S. business, can you give some sense, how does the order book look the rest of the season? How do you see the growth acceleration to be?

Well, see, we do see the order book is still strong, so that's not a problem, but we do see contribution in this financial year coming from around the geographies. It's not, even in the first quarter, if you look at it, it's not only US that's performing. It is Europe, it is Australia, every subsidiary is performing. So this year, you will see growth happening from all geographies, which will contribute. We do anticipate us, I mean, we are still very much on our target of hitting 4000 crores within the next two years, so I think we still... Stand by it, and obviously, we do expect contribution coming from all our subsidies, unlike last year where, obviously, UK was underperforming and US was accelerating up.

Last question on the cap allocation. Obviously, we are now 1,000 crore plus cash, and the scenario is very different from, say, a few years ago. The package has changed completely. Whatever acquisition we have made, the ticket size is relatively small. So, how should one think about further cap allocation? For the current year or so, should we be making any meaningful large acquisition? I'm just thinking of the absolute size, the cashware.

We are exploring those possibilities. Obviously, for us, Europe has just begun. We've just done relatively smaller target deals, but we do plan to expand within Europe as a geography. So, we do, we are... We are actively looking at other acquisitions. Nothing concrete, no pen to paper, but we do believe the resources and the money sitting on a balance sheet will fuel our growth in terms of both organic and inorganic strategies that we plan to pursue.

Thank you so much, Inalda.

Thank you. The next question is from the line of Mead Bua from Integrative Ventures and Partnerships. Please go ahead.

Am I open? Hi, sir. Congratulations on a great sake of numbers, first of all. And I have a couple of questions. So, we have clocked around 25% on the bottom line in quarter one. And also, we have guidance for F527 revenue growth of 15% to 20% and 20% to 21% EBITDA margin. So, is there any plan to revise this on the upward side or how should we look at it?

No, I think we'll stick with that plan because of the volatility that you see, the geopolitical scenarios that you see prevailing surrounding us and pretty much all countries. So we do foresee that due to the continuance of this geopolitical uncertainties. I think what we projected historically or before, we stand by that.

Okay. And the next question is, on this quarter, our UK and Europe segment grow like around 74% YOY and 15% quarter-on-quarter. So how sustainable growth we can assume in these two markets?

I think we'll be able to sustain it.

Okay, you are able to sustain it around 75% and you are able to sustain it around 75% and you are able to sustain it around 50%? Okay. And there was one more question. So, I just wanted to know the timeline for Ireland and Germany entities to start generating meaningful revenue. Is there any specific?

Yeah. So, Germany, we expect some revenue to be generated soon, maybe early third quarter. And we do expect better revenue to be generated from Germany. And Ireland may take some time because product registrations is solely formation of a company. We need a wholesale license, we need a distribution license, and we need product licenses. So that all registration is happening, but we are hopeful for next year to see some revenue in the next financial year, not this year. But Germany will see revenue this year, in the next quarter. And Netherlands are already performing. So, I think UK and Europe by itself will show a decent growth.

Okay. And what about the rest of the world segment? Like in the Middle East also we have one subsidiary. So, how are we looking to grow the rest of the world segment regions?

So we have two, we have Middle East, we have rest of the world, means other markets besides the Western markets. Obviously, the other markets besides the Western markets are struggling a bit because of the war scenarios, because of vessels unable to pass, and, you know, the transportation becoming one of the biggest hurdles in those regions. So, definitely, but we are still, I mean, they don't, to our good fortune, they don't contribute a lot, but these are challenging times for those markets.

Okay, okay. Thank you. Thank you so much for your answer. Wish you all the best. Thank you.

Thank you. The next question is from the line of Mihir Damanya from Fident AMC. Please go ahead.

Yeah, hi. So my first question alludes to a slide in your presentation which states that you want to become a top global consumer health care company by 2030. What will it take for you to reach there? What is where you are now?

Sorry, I didn't, Amir, I didn't. I didn't get you very clearly. Could you repeat that?

So, yeah. So, on slide 38 of your presentation, which is the roadmap, strategic vision, advice, 2030, you alluded that you want to become a top global consumer healthcare company by 2030. So, where, what are the things which you need to do, which are not there currently to get there? What do I take for you to reach?

Yeah, I mean, we are working in the direction. This is all about creating brands. So, consumer, when you talk of consumer health, we are looking at, you know, OTC, we look at brands. So, we are looking at expanding our portfolio where that is concerned. So, a lot of work will go into that. But, yeah, I mean, we will be pursuing that. We would have to invest some resources also according to that. But nevertheless, I think we are confident of moving in that direction.

Got it. And second one is more on the regulatory side. So, you have three U.S. FDA plans, usually. When do you expect the next FDA inspection to kind of take place? Because that comes from the U.S. and your… You only have three locations. When do you expect an XSF inspection to come out?

There is no definite timelines as such because they can come any moment, although one of our plants was recently audited less than 12 months back. But again, they can come any time based on our filings, based on, you know. Based on so many filings that we are doing, they can visit any time, so it's difficult to put a timeline on that.

Okay, thank you.

Thank you. The next question is from the line of Dipesh Sancheti from Mania Finance. Please go ahead.

Am I out of it? Yeah, congratulations, first of all, on a great set of numbers. I mean, completely unexpected and excellent numbers. Just wanted to understand, in your last year con call, you mentioned that Q1 is generally a weak quarter. So, does that mean that, you know, we have more stronger quarters coming in for the Q2, Q3?

Yes. From a revenue standpoint of view, the answer is yes. And I think from an EBITDA point of view, we will hit our expected margins that we have presented to that level, yes. But revenue, definitely, the Q2 will be better than the Q1, and Q3 will be probably the strongest.

Right. And I just wanted to understand also with your European acquisitions. Sorry, are you saying something?

No, no, no, I'm waiting to you.

Okay, I'm saying about the European acquisitions. Now, we've done two in Germany, one in Netherlands, one in Ireland. Do you think for covering the entire Europe, will we need more acquisitions, or these will be enough for, you know, the start?

So, we have done, in acquisitions, we have done only two. One is in Netherlands, and one is in Germany. So, I think these give us a good launching pad into these countries, and if you look at our history, we have always grown on what we've acquired, and we've grown very well on what we acquired. But yes, to answer your question, we would need more acquisitions, and that's where we have a decent corpus with us to close. Any inorganic strategies that come away. Obviously, making sure that it is worth the valuation. But we do plan to expand countries within Europe. That said and done, M&A is unpredictable and timelines are not fixed.

Right. And so what is your U.S. strategy, especially after Mr. Trump has mentioned that, you know, you will no longer be, I mean, you'll have 200% duty after two years. So what is your long-term U.S. strategy? Are we going to ramp up our production in U.S.? How are we going about this?

That's always a possibility. There are different possibilities, but I think we have to cross a bridge when we arrive at it. So, you know, we basically, I would not put much weightage on what he says because it may change pretty much within two days or three days or whatever. So, I think we'll wait and watch, and two years is a long period of time. For anyone to preempt a change happening right now, especially the way the U.S. is shipping up. So I think a lot of things may change. And again, it depends on elections, depends on political scenarios prevailing in that country. So we have to just see how things unfold. Was that a possibility? Of ramping up is always there with us, and we always keep that as an option.

So, what is your US strategy? I just wanted to understand, since we're having so many acquisitions in Europe, is this a long-term strategy to, you know, maybe... If there is any problem in the US, then we have a European market also. Is that what is there on our mind, or is this just a general acquisition-led role?

No, we had always focused, we had always mentioned in the previous calls that we would like to expand our geographies. We historically focus on the market, we consolidate, we grow the market. Once the growth is happening and it's on autopilot mode, we then look at expanding our footprints and other geographies. And this year, we had earmarked for Europe by itself. I mean, coincidentally, the geopolitical scenarios are different or are happening apparently. But we had earmarked this year for expanding, like I said, our footprints into different geographies, and Europe was identified as a market with potential, and that's where we went into Europe. But the U.S. is still our important market. It's still giving us decent revenues, and it's still a potential market for growth.

Right. All the very best, Mark, and congratulations again on an excellent setup. Thank you.

Thank you. The next question is from the line of Vishal Manchanna from Systematics Group. Please go ahead.

Yeah, hi. Good evening, everyone, and thanks for the opportunity. With respect to the gross margins, I think you have posted the highest level gross margins this quarter. So, is there scope to kind of push this higher?

No. I mean, everyone would love that, and we always try to be innovative and approach situations differently. But, no, I don't think that's being unrealistic. So I think, like I mentioned, 55 to 56 range is more comfortable looking at a geopolitical scenarios that are there with the war, with the crew, with everything, with the transportation and everything that goes on.

Okay. And would you be able to share what volume of your sales was manufactured in India? And is it very different from the other quarters or previous years?

I think we do about 65% to 70%, 70% being on the higher side, but 65% to 70% coming from India.

Okay. And you kind of, the backward integration plans are on shelves, right? You are not pursuing actively there, right?

No, we are not pursuing it actively, but we have developed some IPs related to DMFs, but, you know, exploring the CRAMS business model, but we are not pursuing it actively because, again, of what's happening around. Got it.

And just if you could give an outlook with respect to which geography that you think is likely to kind of do better in the near term for you?

I think unlike last year, I think this time all our markets and all the geographies that we are in will do fairly well. So each of our subsidies will continue to helping us achieve our objectives and goals that we've set out.

Any new geographies that you're looking to have?

Europe is a continent by itself. It's a big continent and has a cluster of different countries. We have just started it, so that does not mean that we have conquered anything out there or created anything substantial. We've got a long way to go in Europe, and we plan to expand Thank you. You know, in the coming months and whatever time it takes us to establish, become a prominent player in Europe, like how we've done in Europe, in US and other markets.

So, are you planning anything in terms of the, like, the recently wildest wellness acquired? It's more of an e-commerce platform for OTC drugs. So anything on those lines, would you be interested in?

No, no, no. Thank you.

Thank you. The next question is from the line of Abhij Jain from AJ Capital. Please go ahead.

Hi, good evening. Hope I'm audible. Yes, sure. My first question is on capital allocation. So I'm on slide 28, and I think the ROE and ROCs have obviously fallen in the last few years. And close to all, we have 1,050 crores, 1,050 crores of cash. And most of it I'm seeing in the annual report is sitting in FDs and in current accounts, which probably is earning us 4% to 5% post-tax against an ROC, operating ROC of 20%. So I just want to understand whether, you know, the management is looking at better, efficiently utilizing that cash reserve that they have. Obviously, you need cash for acquisitions and organic growth. But in the management plan about better usage of cash reserve, which is not an imminent need, for example, you know, Index investing is something that can be explored, which gives us a yield of 9% to 10%, relatively risk-free, and helps improve this drag on ROC, which has been happening for quite a while now. Just wanted to understand your thoughts around that.

We don't take that factoring or risk. We are not into that, so we make sure it's safe. Yes, our main aim is to use those. We have funds to drive inorganic strategies, which basically will grow the company and its revenue generation. In those acquisition terms, obviously, we try to be conservative to make sure we get return on investments relatively fast and lucrative, like you see in our Netherlands deal. You'll probably see maybe in the next six months our Germany deal, how it has outplayed versus what we've invested. So we look at returns coming from there at a faster pace than trying to go into instruments which may or may not have any risk, may have some risk factors. So we try to, we are averse with taking risk where that is concerned because those are beyond our control.

Second question is on the broadband and the sustainable and the demand, so obviously it's a quarter of a couple of days in terms of effort. And please just water.

Sorry, you're not audible. Could you repeat that again? Bye for the fourth month.

The basic percentage range. So, and, you know, your other expenses are roughly about 33 to 34% of sales. So, I think that would give us an EBITDA of about 21 to 22% for this year. So, is that understanding correct? Or do you think the 25% EBITDA percentage is rationalizing? So, for this year, I think 21 to 22% is?

Yeah, end of the year, 21% to 22% is achievable, yes.

All right. Okay. Sure. Thank you so much. And yeah, I hope eventually, you know, you can start utilizing some part of that cash reserve towards a better yield product, which is much safer, like index investing or something. I mean, for the future, you can look at it. At least start with some portion. Just to improve yield. Companies across the world are doing it, Mr. Warren Buffett is doing it. I'm pretty sure that there is car manageable at a smaller scale. So, that's it. Thank you.

All right. Thank you.

Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is from the line of Anand Mohr from OM Advisors. Please go ahead.

Hi, thank you for the opportunity. How much of the growth is organic in UK and Europe? And what exactly is the 44 crore from clinic that we've received?

That's a revenue. 44 crore in clinic is a revenue. We have not received anything. It's a revenue. So what does the work from UK is all organic only. We have not done any inorganic in UK per se.

So excluding the clinic number, in our UK business, we have achieved growth of over 50% on a year-on-year basis during the quarter. And that is all over me.

Noted. And what does the company, Clinique, like what do they do? And similarly, if you can brief on what ABC now does?

They are into the generic space pretty much like all our subsidies. You know, Clinique is more tilted towards RX. While ABC Now has got both RX as well as OTC portfolio. But yeah, they are into the generic space.

Just a couple of questions more. How do you see Europe region shaping up in the next 3-5 years and are you looking at more acquisitions?

Yes, so obviously Europe is a big, there are many, it's a cluster of many countries, and we are right now, we are present in only two countries, that's in Germany and Netherlands, but we do plan to expand the geographies in Europe, and most of them will come through acquisitions or inorganic strategies. In the next two to five years, let's say more or less within five years, we are hoping that geography can do about 1,000-odd costs.

Got it. Sir, lastly, if I may, how is Goa Unit 2 progressing, and what is our capacity there?

Goa Unit is progressing. Yeah, the Teva facility is progressing. We are projected about, you know, moving towards the 80 crore, you know, revenue generation from the plant. We are right now at 50 plus crores. So I think we are pretty much at 60% to 65% out there.

Okay, thank you so much.

Thank you. The next question is from the line of Aegislakhani from Unify AMC. Please go ahead.

Yeah, hi, team. I just want to understand that on the manufacturing side also, you know, we called out that we may run out of manufacturing capacity. So any incremental color there in terms of assets that you're looking at, either green or brown?

We are looking at a couple of targets. It's too early to mention whether it will go as per plan, but I think we have a year to two years to work towards achieving those objectives, but if we have to achieve our three to five-year plan, yes, we are aware that we may need manufacturing capabilities. We are working in that direction, but nothing concrete as of now, because, you know, it's easier said than done, we need to make sure that we get it at the price we wanted. So, and that makes it a bit more interesting and challenging. Mark, there's been a certain benefit of having two units relatively close by in Goma. So is there anything on your mind with regards to a specific delocation, or are you open to, you know, going to a different state?

Just want to understand a little more on your flexibility of the geography.

There is no location. We don't have any, I mean, we don't mind expanding and going to another state. Goa was strategically, it unfolded, you know, we were lucky that, unfortunately, it unfolded the way it happened, but that said and done, if there is something in a different state, we will obviously look at it at its merits and take a call at that time. So, as long as objectives get achieved, we are okay in exploring different states. Cool.

Thanks. All the best.

Thank you. The next question is from the line of Nitin Agarwal from Dam Capge. Please go ahead.

Mark, on your R&D efforts, if you can just throw some light on how the R&D efforts have been progressing over the last few quarters, and what are the major objectives from the R&D program that you're pursuing going forward?

So, Nitin, it's a good question. We are focusing, actually, we're putting a lot of stress on R&D, on product development, on different delivery dosage forms, which are a little more expensive in terms of getting it right. So a lot of work in the background is happening on differentiating our product basket, and we've always been doing that, but as we grow bigger, we have better resources to plow into that area, and that's where you have seen a bit of an increase. That said and done, as in when new geographies come into play, then, you know, new product portfolio comes into play, and a product basket is increasing in every geography, so... So there's a lot of work being done in certain countries. And we have taken this objective in the next two to three years to literally double our portfolio in every country that we are in. So we are working hard towards achieving that. And that's what's driving our cost on R&D right now.

In the US, I think for now, I think about 70%, 75% of our business is OTP, is correct me from around that. But Europe is obviously, UK is a smaller amount, and presumably the way we're looking to expand in Europe, is it fair to assume that a lot of the European growth will be again on prescription products, or will be again going to be pretty high? What kind of percentage of OTP do you see playing out in Europe and UK going forward?

So, UK is equally distributed. We have about 50%, maybe 50-50%, or maybe 45-55%, 55 into RX, and 45 into OTC. So, it's quite equally distributed. But in Europe, it's going to be tilting more towards RX, maybe 80% or 85% RX and 15% OTC. So, that's the mix. Because Europe is... Prima facie, more of a prescription market than other geographies that we are into.

Okay. And in the U.S., you know, on the OTC side, any changes that you've seen in the market dynamics in terms of the competitive intensity, number of players coming in, New York players coming in, or players dropping out? Has there anything, any equal changes that you've seen in the market over the last few quarters?

No, we don't see anything. Obviously, we see, you know, we definitely see struggles happening because of the war and the geopolitical scenarios that are revolving, especially around that country. We see the fuel prices going up, you know, people struggle, consumers struggle to affordability on filling their gas tanks. But in terms of... Market Dynamics, we don't see much change where that is concerned, especially on competition, whether they are coming in or going out. We do see some of the big players struggling a bit, but that is always good news for us.

And lastly, on the U.S., how do you see our U.S. sort of geography shaping vote from a qualitative and a quantitative perspective over the next three, five years?

So, obviously, our immediate outlook, you know, we don't talk about 200 million anymore, but we are now working towards 300 million, and then we'll probably look at 400 million, if you have to look at our horizon, or maybe five years. But I think our immediate objective is to first reach our next benchmark of 300 million in the U.S.

And the composition of the business is still going to be driven by OTC in the U.S.?

It is OTC driven, but RX is seeing a bit of better traction also. So maybe historically we were 90%, probably 95% OTC and 5% RX. That may change to 85, 15. I don't know. But yeah, we are, you know, OTC will still be our strength out there.

And lastly, on this one, now with the scale that we've got, probably, you know, we're there with most of the relevant OTC customers in the U.S., I mean, how is that scale that we already have and our older relationships with some of these customers really helping us in building a business plan?

Yeah, it is. I mean, so as and when opportunities do come, we are the preferred choice of partners that we look at. And our product portfolio in each of those customers are increasing. So as and when, you know, if you're supplying 10 items, you know, and tomorrow there is a potential of increasing it by another 10 more items to those customers. So that's where the growth is generated from there. But like I said, we are basically ensuring that U.S. growth is also driven and equal importance is given on strategic product portfolios where we believe there's a gap and where we can increase our market share relatively fast. But, yes, it has to go through all the A&E approval process and everything on that side.

Thank you so much.

Thank you. Before we take the next question, we would like to remind participants that you may press char and run to ask a question. The next question is from the line of Chugal Shah, an individual investor. Please go ahead.

Hi, Mark. Thanks for taking my question. I just want to go back to the question that one of the first parts mentioned around the usage of cash component. So, I see we are having 1,000 crores cash, and the top line is 3,000 crores. So, that number sounds very conservative. I wanted to know, is there anything bigger acquisitions or inorganic growth in the next one-year horizon? Because smaller acquisitions are still happening at the same time. We will be generating more cash flows as we go forward.

Yeah, I mean, anything is possible, right? If we are sitting on a corpus, yes, it can be a decent-sized ticket deal. It can be – in certain markets, we explore different strategies, but if tomorrow we acquire something in India, we will have to pay a bit of valuation. I'm just giving – not that we have anything on mind, but if we have something, you know, we will have to pay – And all of a sudden, you know, 200, 300, 400 crores will go into the acquisition, and, you know, suddenly you say, what happened to all the money? Where did it go? So, but yeah, that money will basically fuel our growth strategy, and we are quite optimistic. Like I mentioned in my previous calls that this is the year that we will be pursuing our inorganic strategy. Over the last couple of years, we've been focusing and pushing and integrating and ensuring that organic takes shape, organic strategy takes shape, and this year, we are working towards the next leap or the next strategy, next growth strategy we have in place for the company, which will basically evolve the company to a different level altogether.

That's good to know, Mark. But just again, to add to that, I think we have reached to a level. Our platform is there. I'm sure we are very confident on the management team. But 15 to 20% growth seems to be very conservative where we are right now. We kind of try to achieve more, better. 20-25% growth should be the new normal, given where we are at this moment. Just being a little greedy, but just trying to be, basically, we have a great management team. You, yourself, have been doing really great for the company as well. So I'm just hoping that we kind of be more aspirational.

Oh, I'm sure. I mean, in my last call, we spoke about doubling our revenue. So that itself is, I mean, how many companies do you know that talk about doubling their revenue, right? So when we get 3,000 crores, we are now giving visibility of doubling our revenue within, you know, the next five years. So, I mean, that itself is, I mean, it is. We still have to work towards that, and we are quite optimistic we will be out there, you know.

Thank you, Mark.

Thank you.

Thank you. As there are no further questions from the participants, I would now like to hand the conference over to the management for closing comments.

Thank you, everyone, for spending a valuable time on this call, and have a great evening, and be safe. Thank you. Thank you.