FY26 closed at 29.7% EBITDA vs Q1 24-25% guide.

Just a clarification on guidance for FY27. Madam highlighted high single digit revenue growth with 25% EBITDA margin?

That's correct. We did say that we would be looking at around about 25%, or in the vicinity of that for the full year and of course high-single digit number in terms of overall sales growth.

So, effectively are you sort of factoring the competition for like Tolvaptan kind of a product and which is why you see EBITDA margin lowering down in FY27?

Yes, we have factored that in both competition for Mirabegron as well as Tolvaptan.

And just as far as Q4 is concerned, compared to Q3 FY26 while the revenue have sort of moved up on absolute basis. But EBITDA has moved down. Is it to do with the U.S business profitability going down or ex-US geographies EBITDA moving down?

There are two parts to that. Essentially the EBITDA margins decline because of there's a slightly increased, manpower cost, as you can see. The second is essentially, we have captured what we have, paid out Astellas on account of Mirabegron settlement as part of the manufacturing other expenses line that's also included. And there's of course the component of foreign exchange that's been captured out there.

So, it's largely to do with this US Mirabegron related aspect which has sort of dragged the EBITDA on a QoQ basis?

On the Other expenses line.

How should we think about the US business in the next year given what you mentioned about Tolvaptan and Mirabegron? Do you see any other product launches which could be meaningful? I know it's difficult to sustain this base, but even as we see competition in Tolvaptan and Mirabegron, what sort of product launches should we look forward to over the next two years which probably gives us the confidence on 25% margin?

So, with Tolvaptan and Mirabegron as well, apart from, the additional competition, we still see the generic market growing, just given the generic penetration in Tolvaptan is under 40% and then Mirabegron is just reaching 50% right now. So, there is a potential for additional generic penetration and expansion of the marketplace despite additional competition. So that's one. So, we do expect them to be material contributors especially in FY27. Apart from that, I think in the next fiscal year, our Ravicti® product, the Glycerol Phenylbutyrate ("GPB") is a material product for us in FY27. We have Saxenda® that we hope to launch in the second half of the year, which would be a material product for us. So, we have 20 plus products. We have two first to files as well. We have Sacubitril Valsartan as well as Rivaroxaban both are exclusive dosage form that we have first to file on. And then another big opportunity as we look at it right now for FY27 is Pegfilgrastim for us. We've just entered into partnership with Valorum and expect that from Q2 and Q3 onwards will start ramping up and be a material contributor to the fiscal year. So, I'm giving you a question about the next two years. In FY28, we see potentially the impact of both full year impact of Pegfilgrastim as well as Ranibizumab that we expect to launch later in FY27. That should be a material opportunity for us in FY28. We are in the final stages with Dulera at this point, just responding to the last query from the FDA and would expect that product to be in the market in FY28 plus we have a material 505(b)(2) Apixaban new dosage form that we filed to the agency. We expect that to come to the market in FY28. So yeah, a good number of product launches, some exclusive first to files, good impact of the biosimilars and 505(b)(2).

My second question is, I think, Ramesh sir mentioned about capital allocation. Given the increase in cash balance which will only go up with this, these US launches, how should we think about capital allocation priorities? I know, you've mentioned this in the past. I just wanted to get a sense of, what we are seeing, in terms of opportunities in the market? What's interesting you and what are the challenges in terms of not being able to deploy that money?

We of course would like the right opportunity so we can deploy the capital effectively, but remain very focused in really allocating material portion of our capital to assets either on the specialty side of the business for the Developed Markets like this VISUfarma acquisition, or assets that can complement us in India both in our existing therapy areas as well as bolster the therapy areas that we want to build. So, we continue to be very focused in, looking for assets in the specialty segments that we've identified. Now that we have transacted on VISUfarma, we are seeing a high flow of ophthalmology assets which could be pretty interesting for us and likewise continue to look for pulmonology as well as rare neuro assets.

So, on the specialty side, the dearth of assets is not an issue? There are enough and more that you can look at. So, it's about us selecting the assets that we want?

Yes, it's really finding the right assets that from a risk standpoint meet our internal criteria as well as give us enough in terms of potential to be meaningful to grow our specialty business.

Vinita given the settlement, is it fair to assume that in Q4 you have sold significantly more Mirabegron compared to Q3?

Yes, we have had, some growth in Mirabegron in Q4 versus Q3, but just because of the growth in market share for the generic.

And this third player who has settled with Astellas, have they already entered the market?

No, they haven't entered the market yet. We believe that they are waiting for product supply.

Coming to Tolvaptan, what is the timeline for competition entry that you are now looking at? I believe there is a patent expiring in September this year. Is that a relevant timeline?

Yes, that is the timeline that we have taken into account in our plans.

My first question is on VISUfarma. So earlier you mentioned this will add around Euro 50 million - 60 million sales on top line and 25% margin. So just want to hear your thought on where do you look this business to grow in say, next two to three years and what will be the key focus segments here?

So, there are multiple areas where strategically the VISUfarma acquisition adds to us. Number one, geographically, it expands our presence from UK, Germany, France to Italy and Spain markets where we had no presence in. And just leveraging the presence across the ophthalmology portfolio, taking our respiratory products, our biosimilars, NaMuscla® into this market is a real opportunity for us that we see as a potential of growing our overall footprint in Europe. Second, just given the pipeline that VISUfarma has in the ophthalmology front, we expect the business in the ophthalmology side continue to grow double digit in the countries that we are now present in Europe. And third, the portfolio also has a fit in Other Emerging Markets for certain. And our team is also looking to see whether we can launch in some of the Developed Markets. But in Latin America and Southeast Asia, we have the potential of leveraging the VISUfarma portfolio into these markets. So multiple areas of synergies that our team is working upon and we remain confident that this is going to be a material step in enhancing our business in Europe as well as on the specialty front.

And the top line should comfortably cross say USD 100 million mark in two to three years If all these factors play out well?

Yes.

And you have the sales team and on ground support all available with this business or do you need to invest a few more as well?

No, actually it came with an excellent team on the commercial side as well as marketing. Majority of the team we have on boarded into Lupin to be able to build on the current ophthalmic model, but also expand Lupin's other therapy areas into these regions.

Second question is on your settlement for Mirabegron with Astellas. So you had one prepaid component which I believe is sitting in Q4 numbers. And on an ongoing basis you will be paying per unit cost. And that will be part of the ongoing operating expense?

Yeah, there are two parts to that. There is one element which of course will be captured as part of manufacturing and other expenses. And the second part, it actually gets amortized over a period of time.

My last question is regarding one product which we earlier discussed. Dalbavancin. Can you update on the status of that particular product?

We expect to launch the Dalbavancin 505(b)(2) in FY27.

Couple of questions on biosimilars. One is on Ranibizumab, so how comfortable you are with the economics of this product? If you look at the current market dynamics, the prescriptions have shifted to Aflibercept that is a longer duration and if you look at the existing or the current incumbents' biosimilars, they have dropped this product right from the market. So, what gives you confidence that this product is going to be a material product for you?

We actually are seeing a good amount of traction with the FDA in getting a product to market. The other companies have had challenges in product supply and we think that has been part of the reason why the product is out of the market. Also, I think you're going to see companies relaunching Ranibizumab. So, we do believe that while part of the market has shifted into Aflibercept, there's still an opportunity in Ranibizumab. Also, for us we have both the pre-filled syringe as well as the vial while majority of the competitors have vial only. So, we also see an opportunity for our product to be differentiated in the marketplace.

Is it possible for you to update on Pegfilgrastim On Body product? So, what is the current status and what's the launch timeline for this product?

We are pretty far along and should be able to file this fiscal year. I know we have planned to launch it in FY29 but hopefully we should be able to launch in FY28 itself.

You talk about let's say around four products in the biosimilar. Which are the other two products if it is possible for you to highlight?

Pegfilgrastim and Ranibizumab, the OBI which of course is Pegfilgrastim, but a different dosage form and Aflibercept and the fifth one is Etanercept in FY29.

Ramesh, you mentioned revenue guidance high single digit, is it in Rupee terms and what's the currency assumptions that you've made?

If there is further depreciation in rupee obviously there is a benefit that would be that we would be taking in. So, at a time that we actually constitute the budget, which is about three months ago. Nilesh Gupta clarified: It is Rupee terms. Ramesh Swaminathan confirmed: Yeah, it's Rupee terms.

The other one is there has been some inflationary pressure because of freight and raw material given the Middle East crisis. So, what's the annualized impact of the same that you're seeing on the P&L if the situation were to remain at the current level?

Clearly that is impacting everybody these are dark clouds on the horizon. When it comes to freight for example, ocean freighting is about 15% higher, air freight is about 60% higher. There are of course issues in terms of raw material costs availability of chemicals sometimes, low solvent prices and all of that. We've estimated that. So clearly, we are monitoring it on a very granular basis and take appropriate action in terms of possible price increases as and when we think it is absolutely something that needs to be done.

One question on your product filing in the US, I think you mentioned about on body product, but what about the respiratory products, Respimat, Ellipta and Enbrel® biosimilar? What's the timeline with respect to filing for these product and when should we expect launch?

So Respimat is actually in the works right now and will be a current fiscal year filing and the Etanercept also will be in the current fiscal year. We pretty much have the entire dossier for Etanercept. There's very little work to be done to be able to file it. There are other material products that we are planning to launch. For the US we have, eight to nine product filings in FY27 on the respiratory front.

The first question is on Semaglutide opportunity across Emerging Markets. Are there any particular markets that you would like to call out that can make a meaningful contribution in the next couple of years?

I think the big market for us is India. Obviously, you know, we've already launched in India. I think South Africa would be the other important market, Brazil as well. Through partnerships in markets like Canada and the like as well. But these three markets will probably start it off for us.

Would you like to maybe give more colour on India, obviously you have launched, but what about Brazil, Canada, some timelines?

South Africa also this year. Brazil also this year. Vinita Gupta added: Brazil and Canada should really be filing this year, so launch hopefully next year.

But the fact is that you may not be among the first wave. So, will it still be meaningful?

We think in the Emerging Markets where we have really built a market presence on the diabetes - metabolic front, like I mentioned Brazil, with the Dapagliflozin launch and now Empagliflozin launch, we're really creating a good position in the metabolic space. We see a good opportunity even as a late comer and I think in the pure generic markets it will be tougher, but in the Emerging Markets it should continue to be an attractive opportunity for us.

The second question on biosimilars, so I understand, you'll have Pegfilgrastim and maybe Etanercept a few years down the line in the US but the entry barrier now for biosimilars is going down, the cost is going down. So, I'm sure a lot more players would come in. Do you maybe envisage a situation where the price erosion might be a lot steeper than what you are currently factoring in, let's say by FY29 - FY30?

I think unless there's a real material shift in the market model, we really see the new entrants bringing an advantage to the overall economics in the biosimilar segment. And from our perspective, the first few products that we have obviously we've been working on these for five plus years. But as we look at the future pipeline, informed by the reducing hurdles from a regulatory perspective and easier go - to - market access in the US. Also equally we are finding in Europe as well there is a more efficient model, especially where country like Germany is starting to tender biosimilar products as well. We see an opportunity for products where we are in the first wave and that have limited number of competitors. So, our focus from pipeline perspective is really on products where we can be in the first wave or limited number of competitors that can give us a unique positioning. We have a good positioning on the ophthalmology front beyond biosimilars with VISUfarma and other products that we are planning to bring into the market. So, we think it really enables us, as an ophthalmic player to bring in both the affordable biosimilars as well as innovative products. But beyond that, the other pipeline that we are investing in for the future is a very selective pipeline that we're going after.

Just how big is the biosimilar franchise as of now from a revenue perspective?

It's about USD 50 million right now but slated to be multiple times this financial year itself.

Just to clarify, largely it's from Etanercept in Europe and these would not be the end user sales? It would be maybe a royalty or a profit share that you might be getting?

Yeah, I mean it's through partners primarily.

And just the last one on Ellipta. So just wanted to check on the challenges that we're facing. Is it with respect to the device? I think one of our also recently entered a partnership for the device. So where exactly is the challenge? If you could sort of, explain what is the hurdle in terms of the filing?

It is really to achieve the product PK. We, believe that we've got the right device in place. It's really the product PK, getting that right. And we're finding that the brand itself is fairly variable.

Just the first one on Semaglutide in India. So how has the launch gone? I think you Semaglutide mentioned the top two or three. So just what were expectations? Maybe some of the dynamics. Given a lot of investor interest. If you could just tell us how things have panned out now it probably, it doesn't yet have April data for example. So just if you could tell us what's been the experience, prescription behaviour, the vials versus the even the pen debate. If you could double click there, please?

I think it's been a pretty solid launch. Pretty much as good as expected or even better. We always expected to be a strong player given our cardio - metabolic play. The product from Zydus is a unique pen and I think that's differentiation in the market as well. Our patient support program is pretty solid as well. So, a so good start. I think we're the number two company as a generic one, the number three as a product itself. So good start. But very early days, right? I mean you're talking about nine days of data and that's, next week we'll have data for April as well. We've obviously had substantial increase in primary in the second month. But time will show. But, I think our goal is very clear to be at Top 3 player in this as generic Semaglutide and I think we're well on track. As far as device is concerned, I think the acceptance for the pen is pretty solid and I'm glad that we're playing that.

My last question just again back on the margin guidance. Right so we're going from 29% this year to 25% let's assume. But Q4 had some headwinds already given that we had a settlement and maybe some of it played through in Q4 as well. So is there extra sprinkling of conservativeness in our margins or you think during the year there could be upside surprises as well?

No, this is actually as a result of we reckoned that there could be some competition coming in for Tolvaptan and possibly for Mirabegron next year. So that would actually in some ways impact our overall margins. And of course as you would see our R&D expenditure is stated to increase a bit. So that is also being captured in the overall guidance.

On the Albuterol inhaler market, wanted to check whether you expect any adverse impact on account of the GSK launch. So, they are supposed to launch a green inhaler around third quarter of this financial year. Do you think the other Albuterol inhalers on the market will see an adverse impact?

We don't think so. We think that their product is really going to be a branded version of Ventolin®. That's what we've been able to tell because based on what we learnt and we hope that it actually expands the market for Albuterol. And we're also ourself working on the green propellant MDIs. So, we're looking forward to see how the launch goes and we'll track it very closely.

Another one on the inhalers side. Are we planning to file Symbicort® and Advair or we don't intend to do those products.

We do have Symbicort® in our pipeline, and we have Advair HFA also in our pipeline.

Just another one on Risperdal Consta®. If you could share how the product is doing and whether you intend to file other long-acting injectable products based on your know-how on Risperdal Consta®?

The product has done well so far. Actually, we've not been able to keep up with the demand. We manufactured the product as a CMO and have struggled to really ramp up. The brand has had supply issues as well. So, there has been an increased demand in the marketplace that they're trying to work hard to see how we can leverage our position. Also, Teva had supply issues with their supplier of the product as well. So, there's a real gap in the marketplace which is a nice problem to have and we're trying to see how we can best meet the incremental demand. As far as the platform goes, while we worked first on a generic, as we looked at the potential of the platform, there are multiple innovative products where the platform can be very valuable. So, at this point in time, we have multiple products on for other brands in the platform and have a few conversations ongoing on potentially doing innovative product transactions with the platform.

You mean doing your own innovative products or doing that as a CDMO partner?

We have both. We have couple of our own innovative products in the platform as well as interest from partners to work with us on co developing, long-acting versions of their products.

Just one clarification on the products Tolvaptan and Mirabegron. So, you talked about that Mirabegron competition possibly next year?

That's right.

So, you are not expecting, let's say any additional competition in FY27 in this product?

No, FY27 is next year for us.

Just one question on the overall U.S business, right. We have done close to USD 1.3 billion of revenues this year and then there are a lot of moving parts. Couple of products will come down in FY27 and then we will see some kind of additional competition, additional erosion in FY28 as well. So, it would be helpful if you just give some ball park number of US revenues for FY27 and FY28 to work with?

In the past we've said that we should be able to sustain the billion dollar plus at this point. We think that based on the competition that we foresee in products like Mirabegron and Tolvaptan, we should be able to get to a level compared to the current year where maybe it's a high single digit or low double-digit erosion in terms of revenues. And that's of course a combination of the current products as well as new product launches. With our injectable launches as well as with Pegfilgrastim, we expect to offset some of the erosion and we expect our base business also to grow in the US.

If I heard correctly, right in FY28 if you are expecting that U.S business to be a billion dollar plus. Close to billion dollars plus?

In FY27 to be a billion dollar plus.