In Brazil, you mentioned 62 products awaiting approval. Have you seen improvement in the approval cycle? When do you expect these 62 approvals to come?
So, it depends upon the type of submission, right. So, some of these are clone submissions from other company's approved products. Hence, the clone submissions in Brazil generally take 6-9 months. Some of these will take between 30-36 months. So, essentially, what we are looking forward in Brazil is we have three divisions, and we are looking at 2-3 product launches per division per year.
On Germany, the supply disruption - could you give some color on when this would normalize, or do we expect this to continue to impact us for a couple of quarters?
Neha, unfortunately, I won't make a prediction, at least a couple of quarters.
This year, we shouldn't assume any improvement in Germany?
Well, it would be good news if we can show some improvement in subsequent quarters, but I don't know. I will just keep my fingers crossed.
With these launches, it's fair to assume that US is now profitable for us?
Yes, Neha, it's still not profitable. It'll take some while before we get into the profitable zone post R&D. But the progress is looking positive. So, I think quarter on quarter, you'll see the losses coming down for the US. And therefore, a positive contribution to the overall performance.
Can we break the growth into consumer healthcare and prescription piece for India business?
We don't really look at it that way. We see every brand separately, every division separately rather than kind of looking at consumer versus prescription. But I would say that the investments being made in the brands like Tedibar, for example, are certainly giving very, very positive results, way more than the prescription growth. And we believe that should continue for the next couple of quarters at least. It's at a base which is growing rapidly. And till we reach a certain level of market share saturation, I don't think that should slow down. And partly that's aided by the consumer spend that we have been making for the last say one, two years.
On the JB Pharma acquisition, it's a month since we made the announcement. Any update?
No. So, Shyam, there were some filings which were required in terms of public offer and merger schemes, including the CCI application. All those have been done now. Now, what we believe, I mean, we have to wait for the CCI revert to come back and see if there are incremental things to be done.
On the Semaglutide launch in Brazil - what is your expectation at this point in terms of timing for approval? How do you see how many companies you expect to be ahead of you?
Sure. So, what I will do is I will actually not talk too much specifically about Torrent, I will just give you a brief on the market. Because, I mean, for competitive reasons, I do not want to tell you which month we would file, which month we would get approved, etc. But let me just give you a macro picture of where we are in Brazil. So, Semaglutide is two products, right? Ozempic and Wegovy, right? Ozempic has been in the market for a while in Brazil. But since Wegovy launched in middle of 2024, Ozempic has been in a decline. So, it has been going at -15%, -17%. And current size of Ozempic is pretty come down a lot. So, it is about $350 million. So, Ozempic, by the time it goes off-patent would be smaller. And we have seen that due to changes in regulation, it is losing the obesity patients to Wegovy. And Wegovy is currently running at $150 million a quarter. So, in the space of one year, it has reached a run rate of $150 million. And let us see how the growth continues. But it is already a $600 million product on an annualized basis. And so, Wegovy, generics would come to the market a little later because people have not started filing as yet. So moving, Brazil would be, let us say, a couple of years behind the Ozempic launch. So, the dynamics would be different. And so, we are working on both the products without giving you more specificities. And we are trying to be in the wave one of launches.
Given the size of Ozempic declining, would Ozempic generic be a meaningful contributor for Torrent in the near term?
I do not know what you mean by meaningful. It depends where the market is. The market is going down -14, -15 and if 10 people show up, then I do not think it will be a meaningful contributor. On the other hand, I would be much more gung-ho about Wegovy because of where the market is going and the fact that it is a little bit down the line. So, I would probably have better chances of being on day one. So, yes, that would be my general sentiment.
How are you seeing competitive intensity on Sacuval? Could it be a sizable opportunity for us?
I would say it's a little bit early to give you a prediction. We saw 10 people launch on day one. So, that's quite a lot of people. And what I don't know is how much is the product available on the market, if it's an excess supply, who's targeting what market shares. So, I think it's better to wait. It's just been a few days, right? So, actually our invoicing started on Thursday, Friday of last week.
You mentioned your thoughts around the Semaglutide market in Brazil. Do you also mind sharing your thoughts around the market in India as it opens up and your plans?
Yes, again, so there's a lot of moving parts here. So, would refrain from giving any specifics at this stage. But certainly, a large opportunity is ahead of us and the market overall. We believe that the injectable will be the large part of the market and the oral will also have a kind of fair share over time. Both have a kind of separate use and kind of patient pool. So, we believe that both will be important opportunities for us. We are conducting the phase III clinical trials as of now for the oral product and then partnered for the injectable and as of now, it looks like we could be in the first wave. And again, I would kind of not want to make any speculation on how large the market could be, but it's certainly going to be a reasonable addition to our chronic portfolio in the next 1-2 years.
Can you explain the Forex loss which you have booked in other income? And how much is the number?
So, Rs. 48 crores is the Forex loss which we have booked in other income and a major part is on the EURO-USD pair, I would say, where the euro has appreciated almost by 10% this quarter. So, it's more of translation losses, which I believe going forward, you should start seeing some of them reversing.
In Brazil, I understand the currency situation is not as severe as what we had seen in the previous quarter. So, compared to the constant currency growth and reported growth, I understand that difference has come down?
So, Damayanti, if you see last full year, the currency depreciation was around 15%. And since then, I think it's appreciated by almost 10%. So, still there's a depreciation of 5%. So, you see that 5% difference between constant currency growth and INR growth.
Can you break down the India growth into the components, volume, price, and new launches? And also talk about MR expansion plans.
Yes. So, our growth reflected in the AIOCD Pharma Trac data is 12.2%. The breakup of that is 3.5% volume, 6% price, and 2.5% new products. And this is against, I think, 8% growth of the market for the quarter. And in terms of expansion, I think nothing really new from the last quarter that we shared. Essentially, it's the same expansion that's been executed in the chronic segment. We have added 200 MRs this quarter. I think a similar number may be added by the end of Q3 this year. So, give or take, the plans remain the same. That may be 6,900 to 7,000 MRs should be onboarded by the end of the financial year.
The adjusted margin of 32.9%, based on the performance of the first quarter, would it be fair to assume that this is the run rate or slightly better as we go through the year?
Yes, that's what we expect, Neha. Minimum what we have reported in quarter one should continue for the rest of the quarters.
What is the Germany supply disruption related to exactly?
So, in Germany, 75% of our business comes from third-party products, right? So, we have a lot of partnerships. And so, one of our partners has had some supply issues linked to regulatory requirements. Hence, it has a major impact on growth. And so, well, we are kind of a little bit hostage to the situation in the sense it's not within our direct control. And some products we are sourcing through other places, or we're bringing them in-house, but it will take some time before it normalizes.
On US, the facilities are improved, we started seeing contract wins and new product launches gaining share. How should we look at the traction? Could you give us some color on the number of launches and sort of growth that Torrent can see in the US market?
So, I would say that in the course of this fiscal year, we should see about 10 launches. Some of them are matured products, and a couple of them are day one launches. So, in the first quarter, we launched about 4 or 5 products. And the biggest launch for us so far was the Esomeprazole granules, which we launched at the start of the fiscal year. And we have had other few smaller launches of products which are already genericized. And then last week, we launched Sacuval also. So, going forward, we expect another 5-6 launches for the rest of the fiscal year.
MR count has increased by almost 1000 over the last one year. But somehow the MR productivity is still lower or the growth is still not catching up with the addition of MRs.
I would not look at it in that way. Generally, the MR additions take at least 12 months to 18 months to onboard and kind of get familiarized. So, if you see last year's full growth, we were at 13%, which was significantly higher than the market growth. And that was a result of the expansion done in the previous kind of two years, right? So, that is the time and impact that it takes. So, anything that gets done today won't have an impact on positive growth in the next quarter or two quarters, it may be seen in the next one year and two years. So, I think the numbers that we are seeing in the places that we have expanded and divisions we have expanded, certainly there is a positive, meaningful, positive uplift, otherwise, we won't continue doing it. So, I would say that it's best to look at it from a two year horizon rather than anything shorter than that. And just to kind of add one more point is, that last year's Q1 growth in India was actually 15% and this year is 11%. So, in a 2-year CAGR, it's about 13. So, which is still significantly higher than our previous CAGR before the expansion started.
What is the composition of India business into prescription and consumer?
Yes, I mean, we have generally shared that the consumer brands are between 10% to 15% of the total portfolio.
Germany has had unfortunately some or the other reasons keeping growth under check for last couple of years. Any re-thought on the geography?
No, so there's no re-thought on the business in terms of geography. We are trying to improve and every time we improve, something else goes wrong. But that doesn't mean that we are giving up on Germany. We are the fifth largest generic company with about 6% of the German generic market. We have an aggressive growth strategy in terms of new launches and cost improvements of existing portfolios. So, all that work continues.
How many launches we would have done over the last 12 months out of that? How many line extensions and how much cost to market?
Meaningful launches would have been maybe 4 or 5. Line extensions would have been more, maybe say 9 or 10. And the contribution of the new products is about 2.5%, which may increase slightly in the coming quarters, because the brands would start increasing in size.
We are getting another field force of over 2,100 once the deal closes with JB Pharma. Should we go slow and consolidate on field force?
No, I do not think so, because where we are expanding is in non-overlap areas. So, regardless of the acquisition, we would like to go ahead. We did review this, but it is definitely a kind of the more appropriate call to continue the expansion rather than wait for the merger.
On the ETR tax rate - came in 24%-25% for the quarter, how should we look at for the full year?
So, we are already in the new tax regime, Shyam. So, at least standalone India, you should see 25% playing out and considering subsidiaries 1% here or there. So, maybe 25%-26% max.
On Brazil, there is a fair bit of volatility in constant currency growth. How should we think about growth in the coming quarters?
Saion, Brazil is a funny market because it is highly concentrated in terms of distributors, right? And they pretty much decide how much inventory they want, destocking, stocking. So, volatility of primary sales is there quarter-on-quarter. But I have always kind of guided that it is the best to follow the IQVIA data because that kind of normalizes that and it is more related to the demand. So, I would say that IQVIA is currently running at about 14% for us and that is actually a better reflection than the primary sales.
Margins are expected to remain stable at current level throughout FY'26. Shouldn't you expect margins to move up in the coming quarters given branded markets doing well and US improving?
So, I think, Vivek, what I said, minimum, this margin should sustain for FY '26. That's point number one. Point number two, I think in the last quarter's earnings call, I did indicate that there will be a pickup as far as R&D spend is concerned, plus certain re-investments which are happening in each of the businesses. So, for now, I feel confident that basically 32.9% minimum is something we should achieve. But quarter-on-quarter, let's see whether there's a further improvement which is possible or not.
You said that Wegovy is taking market from Ozempic and Ozempic is consistently coming down. Don't you think that once the generics come, there can be some off-label use and even Ozempic can get some kind of share?
So, in theory, yes. But in reality, what is happening in Brazil is, ANVISA has put in place very strict rules. So, each prescription for Semaglutide has to be issued in two copies. And with the indication on the prescription and the pharmacy is required to maintain extensive records, including a copy of each prescription. So, I've never seen that draconian measures put in place by ANVISA to prevent misuse of the drugs. Hence, my submission would be that the off-level use would be minimalistic.
Just a clarification, did we indicate that we have launched Sacubitril and Valsartan in the US?
Yes, it got launched last week.
The split of the 12% growth across volume, price and new launches for India - if you can repeat?
Sure. It's 12% as per the PharmaTrac data. And the breakup is 3.5% volume, 6% price and 2.5% new products. And the market overall was 8% out of which volume is 0.3% for the quarter.