Ajanta Pharma Limited (NSE: AJANTPHARM) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Yogesh M. Agrawal — Managing Director
Rajesh M. Agrawal — Joint Managing Director
Arvind K. Agrawal — Chief Financial Officer
Rajeev Agarwal — Associate Vice President, Finance and Investor Relations
Analysts:
Tushar Manudhane — Analyst
Amlan Jyoti Das — Analyst
Vishal Manchanda — Analyst
Nitin Gosar — Analyst
Rashmi Sancheti Shetty — Analyst
Foram Parekh — Analyst
Rahul Arora — Analyst
Harsh Bhatia — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Ajanta Pharma Q3 FY ’25 Earnings Conference Call.
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 the call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr. Yogesh Agrawal, Managing Director of Ajanta Pharma Limited. Thank you, and over to you, sir.
Yogesh M. Agrawal — Managing Director
Thank you. Good evening, and welcome to all of you. With me, I have Mr. Rajesh Agrawal, our Joint Managing Director; Mr. Arvind Agrawal, our CFO; Mr. Rajeev Agarwal, our AVP, Finance and Investor Relations. I hope the results are already there with you.
Now we will take you through the business-wise performance for Q3 and nine months for the FY ’25, along with the comparison of the previous year for the same-period. So you’ll be glad to note that our performance for Q3 was satisfactory as the branded generics business saw a healthy growth of 10%. This was on the back of our strategic approach and focused execution along with the consistent efforts, which allowed us to strengthen our position as a leading player in the pharmaceutical industry.
Our concentrated efforts on improvement in working capital cycle has resulted in generating free-cash flows of INR675 crores with 97% of PAT conversion in nine months, which is indeed a remarkable achievement. We are confident of sustaining this momentum and driving continued growth in the coming quarters. Our excellence in terms of strategy and operational execution will enable us to deliver long-term value to our shareholders.
Now moving on to the business details. During the quarter, revenue from operations was INR1146 cr from our current — from our three verticals of branded generic, US generics and institution business in Africa, a growth of 4%. During the quarter, 74% of the total sales came from the branded generics, which is spread across India, Asia and Africa. The branded generics sales stood at INR834 crs, posting 10% growth during the quarter. This business exhibits assurance, sustainability and potential for the long-term growth.
Let me now take-up international business and I will first start with the branded generic business in Asia and Africa, which contributed 44% in the total revenue. In Asia, our presence spans across Middle-East, Southeast Asia and Central Asia, encompassing around 10 countries. In Q3, sale was against INR292 cr, a growth of 8% and in nine months, sale was INR88 against INR776 CR, a healthy growth of 40%. We launched nine new products during the quarter, taking total Itality to 22 new products launched in nine months in the Asia region.
Let’s now move to Africa. Africa business has spread over 20 countries. In Q3, sale was INR173 cr against INR155 cr, a growth of 12% and in nine months, sale was INR617 cr against — again, sorry, against INR472 CR, a healthy growth of 31%. We launched seven new products during the quarter, taking total tally to 10 new products launched in nine months in Africa region. Let us now talk about other two verticals of international business.
I’ll move to US generics. US generics contributed 21% to the total revenue. In Q3, sale was at INR263 against INR252 cr, posting a growth of 4% and in nine months, sale was at INR723 cr against INR703 cr, a growth of 3%. Our superior execution continues to keep us as a preferred partner of choice for the distributors. In nine months, we filed four ANDAs, received five final approvals and launched five ANDAs. We now have 48 products available on the shelf and 21 ANDAs awaiting approval with USFDA.
I now move to Africa Solution. This business contributed 3% in the total revenue, which comprises of products. In Q3, sale was INR33 crore against INR86, posting de-growth of 61% and in nine months, sale was at INR118 cr against INR188 cr, a degrowth of 37% due to lower purchases by the global funds. As informed earlier, this business remains unpredictable due to the reliance on procurement agency’s schedule and funds availability.
Now, I invite Mr. Rajesh Agrawal, our Joint Managing Director, who take you through India business. Thank you, and over to you.
Rajesh M. Agrawal — Joint Managing Director
Thank you. Good evening to you. Good evening to all of you.
I am delighted to inform you that under strategic initiatives, we have forayed in two new therapies in IPM, namely gynecology and nephrology. The total IPM size for both these therapies is approximately INR16,000 crores as per IQVIA MAT December 2024. We have added 200 plus MRs in these two new therapies, which are a part of total additions of MR so-far. We have launched about 12 new products in these two therapies in Q3 FY 2025.
Coming to our performance, it was an excellent quarter on the back of increased volumes and new product launches. India business contributed 32% in total revenue. In Q3, sale was INR345 crores as against INR308 crores, a healthy growth of 12% and in nine months, sale was INR1,083 crores against INR982 crores, a growth of 10%. India business includes revenue from Trade Generic, which contributed INR43 crores against INR38 crores in Q3 and INR130 crores against INR120 crores in nine months in the same-period of FY 2024. During the nine months, we launched 26 new products out of which eight were first time in the country.
Operator
Please stay connected. We seem to have lost the line for the management. Please stay connected while we reconnect the management. Thank you. Participants, please stay connected while we reconnect the line for the management.
Participants, thank you for patiently holding your lines. We have the line for the management reconnected. Over to you, sir.
Rajesh M. Agrawal — Joint Managing Director
Okay. Thank you. So, I will continue the statement again. We continue to outpace IPM by 300 basis-points with Ajanta growing at 11%, surpassing IPM growth of 8% as per IQVIA December 2024. This trend extends to most of the therapeutic segments we are in, where our growth has consistently outpaced the segment growth.
In the covered market, we continue to be fourth largest in IPM and among top-10 in all our therapeutic segments. As per IQVIA MAT in December 2024, our faster growth is contributed mainly by volumes, which was approximately three times more than the IPM volume growth. Cardiology contributed 38%, followed by ophthalmology 30%, dermatology 23% with remaining 9% coming from pain in India branded sales. We have added 250 plus medical representatives in-quarter three, taking the total addition to approximately 450 in the first-nine months of FY 2025 and total tally to 3,450. These additions will help us drive India business in the coming three to five years. This addition is in-line with our strategy of increased focus and expanding product basket.
I now invite Arvind Agrawal, CFO, to take you through the financial performance. Thank you, and over to you, Arvind ji.
Arvind K. Agrawal — Chief Financial Officer
Thank you. Good evening and warm welcome to the third earnings call of year 2025.
On this call, our discussion includes certain forward-looking statements, which are projections or estimates about the future events. These estimates reflect management’s current expectations about future performance of the company. These estimates involve number of risks and uncertainties that could cause our actual results to differ materially from what is expressed or implied. Ajanta does not undertake any obligation to publicly update any forward-looking statements, whether because of new confirmation, future events or otherwise. We will look at the consolidated financials and provide year-on-year comparison.
The key financial highlights of quarter three and nine months of FY 2025 are as follows. Total revenue in Q3 stood at INR1146 crores against INR1105 crores, posting growth of 4%. In nine months, the revenue was INR303,478 crores against INR3,155 crores, posting growth of 10%. The growth was lower than our expectation due to lower institutional procurement of antimalarial products. Our gross margin stood at 77% in nine months, an improvement of 200 basis-points from year. This was the result of higher contribution from branded generic business in overall revenue. We expect it to remain in the similar range with quarterly movement of 50 to 100 basis-points due to change in-product mix.
Personnel cost in Q3 was at INR265 crores, an increase of 15% on the back of increased Yamas in India. For nine months, it was at INR1810 crores, an increase of 21% due to one-time charge of about INR30 crores of — for change in graduity policy in Q1 and increased demands in India. Increase in medical representative in India will see the cost slightly going up in coming quarters. R&D expenses was at 5% of total revenue. In Q3, expenses was at INR53 crores against INR52 crore in nine months. It was at — I’m sorry, against INR52 crores last year. In nine months, it was INR161 crores against INR157 crores last year. We expect the expenses to be at 5% of revenue for the fiscal.
Other expenses in Q3 stood at INR302 crores against INR266 crores and in nine months, it was at INR918 crores against INR792 crores previous year same-period. It may be noted that the other expenses includes forex loss notional towards mark-to-market of hedges of INR14 crores in Nine-Month FY 2025. As informed in previous calls, the increase in expenses were in-line with our guidance due to increased and expenses. The expenses in Q4 are expected to be on the same level of Q3.
We achieved EBITDA margin of 28% in both Q2 and nine months. EBITDA stood at INR321 crores against INR314 crores, a growth of 2% in Q3 and INR962 crores against INR894 crores, a growth of 8% in nine months over previous year. We expect the EBITDA to be around this range plus-minus 1% for whole of FY 2025. Other income was at INR30 crores in Q3 and INR76 crores in nine months of FY 2025. It includes forex gain of INR18 crores and INR26 crores, respectively in Q3 and nine months. Income tax stood at 24% during Q3 and nine months and is expected to be on similar lines for FY 2025. In Q3, PAT was INR233 crores against INR210 crores, a growth of 11% and in nine months, it was at INR695 crores against INR613 crores, a growth of 13%. Pat stood at 20% for both Q3 and nine months of revenue from operations. We incurred capex of INR180 crores in nine months FY 2025. Capex including maintenance capex for FY 2025 is estimated to be at about INR225 crores.
We have improved all the three fronts of working capital in nine months of FY 2025 from FY 2024. Inventory stood at 71 days against 73 days, trade receivable at 86 days against 109 days and payable at 66 days against 85 days. This is the result of our consistent effort in improving working capital cycle. In nine months of FY 2025, we have generated a healthy cash-flow from operations of INR985 crores with cash conversion ratio of 102% and free-cash flow of INR675 crores with 97% PAT conversion. ROCE and RONW continue to improve and be comparable to the best-in the industry. ROCE stands at 35% and RONW at 26% at the end of December 2024.
With these highlights, I open the floor for question-and-answers. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one.
The first question is from Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Sir, thanks for the opportunity. Sir, with respect to start of new therapies in India market, so what can — is this quarter reflects the additional expenses related to these therapies or these are expected to further increase in the coming quarters? That’s my first question.
Arvind K. Agrawal
So as far as people cost is concerned, about 200 people who have been — which have been added in these two therapies is already included and it will continue in the other quarters also — coming quarters also.
Tushar Manudhane
And the marketing expenses?
Arvind K. Agrawal
Marketing expenses are yet to take-off. I think it will slowly go up in the coming quarter.
Tushar Manudhane
Got you. So, effectively, like considering these factors, maybe I’ve missed the EBITDA margin guidance for FY ’25, ’26.
Arvind K. Agrawal
I think…
Yogesh M. Agrawal
Remains at the same level what we have given last year at the beginning of the year. We have maintained 28% plus-minus 1%. So I think we are — we feel I think it should it should go in that direction for the whole year.
Tushar Manudhane
Understood. And just secondly, with respect to ANDA, we filed four till-date in this financial year. So the target of eight for full-year sort of achievable or you might…
Yogesh M. Agrawal
Yeah. it will be achievable. There are a lot of ANDF which are skewed towards quarter-end. So we are expecting to file four more NDAs in the last quarter.
Tushar Manudhane
So will that result in higher, say, at least from accounting point-of-view, R&D costs and so that will have from a Q4 perspective, I have to ask in terms of the impact on the margins?
Yogesh M. Agrawal
No, actually R&D cost already incurred because it’s just waiting for the stability data to come out and things like that. So that is already baked-in into the current quarter and the last quarters. So we don’t see any significant expense increase in the next quarter also. There could be a marginal increase, but not a significant increase in the expenses considering R&D domestic launches, what we have done for the addition of the people, all those things. Maybe we can see a slightly more impact in the next year, but we’ll talk about the next year when we finish the year.
Tushar Manudhane
Got it. And just lastly, if I may like you know, considering like so many therapies available, you know what sort of factors went into drive-to a conclusion of selecting nephrology and gynecology as the next sort of growth lever — additional growth lever for India market?
Rajesh M. Agrawal
Nephrology is a natural extension of what we have been doing already for so many years. We have been covering nephrologis by way of marketing and selling our largest brand,, which is the second-largest brand in that particular subtherapeutic segment. So made a logical sense for us to expand our footprint and product portfolio, have a dedicated team and task force. It is also a small kind of set of customers that we need to cover. So that suits the way that we have really built our business.
Gynecology, I feel the — this market is still large. It is INR11,000 crore-plus market and I feel that we have required product portfolio and the skill-set to make our presence in this segment. It’s a large segment and we would like to — we would like to be prominently present over the coming three to five years.
Tushar Manudhane
Got it. Thank you.
Operator
Thank you. Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Amlan Das from Nomura India. Please go-ahead.
Amlan Jyoti Das
Hi, sir. I just wanted to ask what is your outlook for the Africa business? Is it going to remain low or do you have any outlook regarding this?
Yogesh M. Agrawal
Yeah. As you have seen, the current quarter, we saw a significant dip and for the whole year also there is a degrowth — a sizable degrowth, I think of about 40% odd. So for the whole year, that’s what we are looking at around 40% degrowth from the last year. Going-forward is a bit uncertain because of the announcement made by the Trump administration of not in favor of funding the US aid and some more thing. But then there was a roll-back and some clarification given by after 24 hours or two days that they want to continue with some critical medicines and life-saving medicines. So I think that’s still an evolving landscape that determines purely on how much money the donor agency — donor countries give to this procurement agency.
So — but yeah, I think it’s it is — we have current year we’ve seen a degrowth of 42%. But I think in overall scheme, it’s become a very small component of our business. It is now 3%. Maybe next year, the way our other businesses will grow, the branded generic business in India, emerging markets and US, this will even become a much smaller part.
Amlan Jyoti Das
Okay, sir. Thank you. Sir, one more question regarding the India business. If have you booked any sales for the new therapist that you have added in this quarter or there is the 12% growth, what is the contribution of this new therapists?
Rajeev Agarwal
In the current quarter?
Amlan Jyoti Das
Yeah, current quarter.
Rajeev Agarwal
No, it is insignificant. We have just onboarded the new team. They would take quite a few months-to be productive. This is insignificant compared to the total domestic business.
Amlan Jyoti Das
So what is the PCPM right now?
Rajesh M. Agrawal
PCPM is about 3.9 lakhs at a company blended average basis, including the therapies, including all the MRs that we are present with. But I am not adding the MRs that we have added in the last six months, essentially because that will take — they will take at least another year to be productive. So this 3.9 lakhs is at a base of 3,000 plus MRs.
Amlan Jyoti Das
Okay, sir. Thank you. That’s all.
Yogesh M. Agrawal
Yeah. Thank you.
Operator
Thank you. Ladies and gentlemen to ask questions please press star and one. Next question is from Vishal from Systematix. Please go-ahead.
Vishal Manchanda
Hi, good evening and thanks for the opportunity. With respect to US business…
Operator
Vishal, your voice is very low. I request you to use the handset. We can’t hear you very clearly.
Vishal Manchanda
Yeah. Is this better?
Arvind K. Agrawal
Yeah, much better, Vishal.
Vishal Manchanda
Yeah. So sir, with respect to the US generic business, can you guide for the next year in terms of how many launches we can we can expect? And any color on the type of these launches with respect to the market size that they address and whether they are early to the market in terms of immediately post-patent expiry or limited competition?
Yogesh M. Agrawal
I think — I don’t think I’ll be able to give you that in-depth granular details to you. But we are — as I told you, we have launched five new products during the year and there are more launches, which will happen in next year and in the next quarter and the next year. So in the beginning of the year, we had guided mid-single-digit growth for the US market. We are pretty much trending towards that for the whole year. Nine months also is like that for the whole year. So we are pretty much on what we had given the guidance and what we had made a budget internally.
Next year, we feel we should post the higher-growth, much higher-growth. It will be double-digit growth. But I will give you the growth in the next call on what we are going to look for the US once all our budgets and targets are finalized. But there will be a — I think decent number of product — new product launches, which will happen in the next year also.
Vishal Manchanda
So would you be able to share any limited competition launch that you expect complex product launch?
Yogesh M. Agrawal
Unfortunately, sir, I don’t have those kind of granular details. There would be few products which are limited competition, that much I can tell you. There will be at least two or possibly three products which could be of limited competition.
Vishal Manchanda
Got it.
Yogesh M. Agrawal
Two products we are definitely looking at the horizon, which would be limited competition, yeah.
Vishal Manchanda
Okay. And with respect to these branded markets, the Asia and Africa, can you explain the reason for these markets to be volatile over quarters? Like we can see sharp growth in some quarters while it becomes subdued, like this quarter was a subdued quarter for the Asia and Africa market.
Yogesh M. Agrawal
So, essentially, what happens here is actually our sales, which is a secondary sales, which happens in the market, that is at a steady-state but because it is — we are just shipping from India to our distributors and then there are AS nine factors and there are transit time factors which are all there. So that is the reason we see this kind of peaks and values, the lumpy sales going down.
I think quarter-to-quarter variation is not the right way to look at the export sales. I think the nine months or 12 months horizon is the right way to look at that at the growth. And at the beginning of the year, we had guided for the branded generic business to be in the mid-teens. And as you will see, if you remove the quarter-to-quarter, if you see the nine months or what we are forecasting for the full-year, it remains pretty much in the outlook or guidance which we had given of hitting that mid-teen branded generic growth.
So I would suggest don’t read too much into the quarter-to-quarter. I think look at the horizon. If you see the Asia, the nine months growth is 14%, so which is what normalized because second-quarter we saw 28% growth, quarter three, we saw 8% growth and Q1 was 8%, 9% growth. So on the whole nine months basis, it got normalized to 14% average blended growth.
Vishal Manchanda
Right. And just one more on the new division launch, Nephrology and Guynack, so whether these 12 products that you launched, any color in terms of whether these are kind of new launches in large markets and you would be a new brand in those categories and there are multiple established brands there already or you are doing a different strategy here or you’re getting into very fast-growing categories within the space?
Rajesh M. Agrawal
Yeah, you’re absolutely right. These are high-growth sub-therapeutic segments, which we have identified as our go-to-market strategy. And so the tailwinds are already there in our favor and none of them are first-to-market at this point. But we are confident of being able to differentiate given our ability to engage the customer on the scientific activities and also through unique customer engagement activities that we do and that we have done in other specialties. We are quite confident the team that we have is a highly experienced team in these respective therapies which gives us a head-start. So this is how we will differentiate and make a presence.
Vishal Manchanda
Got it, sir. Thank you. Thank you. That’s all from my side.
Operator
Thank you. The next question is from Nitin Gosar from BOI Mutual Fund. Please go-ahead.
Nitin Gosar
Hi, team. I wanted to understand two aspects. Now keeping in mind that the branded generics forms a very dominant share of our revenue and the outlook in domes in branded generics is somewhere around 10%, 12% 13% kind of growth and US becomes the only key moving part to drive the additional growth. How should we look at this company now from next two to three year perspective agenda where we are having a lot of resources to be deployed, but growth rate is slightly, you can say close to GDP or slightly enemic. How should one look at the organization from next three-year perspective?
Yogesh M. Agrawal
I think we are pretty much outpacing the market. So our growth have been, I think 20% to 30% higher than the market growth. We feel comfortable the way we have positioned ourselves in the branded generic business. I think in a cumulative three years, you know, I think low-teens to mid-teens kind of growth in branded generics is quite doable, whereas the markets are growing at 8%, 9%, 10%. So even if you’re able to do them, let’s say, 12% to 15% growth on a three years horizon, we would be almost beating the market by 50% and on a base which we are, in most of the markets, our growth are in the top-five growth percentage in the market.
So I think, I don’t know, I think you should reevaluate our figures in the past and going-forward. US, as we had already guided in the beginning of the year, this is a year where we don’t have that many launches, lot of launches were skewed towards the second-half. So it is going to be a mid-single-digit growth. But we are looking to post a higher-growth in the next year. But US depends on like that. The years we have higher launches, the growth becomes higher, the next year, we may not have that much yet. But at over three years period, I think we should be able to post mid-teens growth there also I think on a CAGR basis or probably even higher than that.
Nitin Gosar
No, point taken. It was only that the kind of cash flows we are generating, how should one see that getting redeployed or it will be a company which should continue to have a higher dividend payout or there are enough avenues to redeploy the capital?
Yogesh M. Agrawal
So we keep continuously looking at the acquisition assets, but we are not forcing ourselves. We are not pressurizing ourselves to make acquisition just because we have a large cash-flow which is coming through. We rest assured whatever transactions deals are happening in the market, they come our way. We make really very judicious evaluations. They have to fit our therapeutic segments, our presence in the market. So multiple filters are there. We can’t force and time the acquisition. As and when it happens, it happens, but we are actually on the lookout. Till that time, we will give back the money payout. That payout will continue.
Nitin Gosar
That’s a fair point. And in the opening remarks, there was mentioning of high cash-flow generation. But vis-a-vis that if I were to see the nine-month interest outgo is around INR15 crore versus last year, nine months around INR6 crores. Why should that be, sir?
Arvind K. Agrawal
That is only basically because we have done some discounting of our receivables. So that is why that amount is being shown there. And this is again to make our working capital more efficient. So that is something which is the cost which has been incurred for.
Nitin Gosar
Okay.
Arvind K. Agrawal
And one thing is that it is neutral because as I pay that interest cost, definitely I earn the interest also and it is always almost better than what I really pay the discounting charges.
Nitin Gosar
Okay. And should now this become the norm for us, like…
Arvind K. Agrawal
Yes, I think we will keep on doing this as long as it is something which is doing a very positive sense for the working capital efficiency building.
Nitin Gosar
Got it. Got it. Thank you. Thank you for answering the questions.
Arvind K. Agrawal
Thank you.
Operator
Thank you. Next question is from Tushar Manudhane from Motilal Oswal Financial Services. Please go-ahead.
Tushar Manudhane
Thanks for the follow-up. Sir, like the way we have added new therapies in India, any plans to work on that part as far as Asia and Africa markets are concerned?
Yogesh M. Agrawal
Yes, yes. We are going to get into two new therapeutic segments in the international market. In the Q1 of next year, we will be launching a CNS line in our Asia market and we are actively pursuing the gynecology expansion also in the international market. So next year, we will have two therapeutic segments added in the international market as well.
Tushar Manudhane
Got it. And sir, secondly on the gross margins where we continue to strengthen. So is it to do because of relatively lower proportion of US business or some moderation in US business and that is what is driving the gross margin or this is the kind of gross margin which we should sort of assume in FY ’26 as well?
Arvind K. Agrawal
You are right, Tushar. I think it is more to do with the business mix. You know more the branded generic business, naturally the gross margins are going to be higher. As the proportion of US will go up and it may little come down, but that is something which is very clearly the proportion of the business mix which is going to be there in future.
Tushar Manudhane
Got you. And sir, lastly, as far as Asia market goes, we have been consistently growing at 14% to 15% CAGR over past few years. This FY ’25 also nine months, we are almost at 14% growth. Maybe in terms of market-share, if you could just highlight what is the market-share we have and what is the visibility for such sustained healthy growth in this market for next couple of years as well?
Yogesh M. Agrawal
No, definitely. We command a decent market-share in various countries where we have a significant presence. Our market-share is in the range of 2% to 5%, despite we not being in multiple therapeutic segments. So — and number of markets, number of molecules, we are leaders, a number of therapies like cardiology, diabetes,, derma, our rankings are pretty high. So I think we feel very comfortable, as I always say.
I think our existing brands, they have head space to grow. We are adding more brands and more people. So a combination of that, we feel comfortable to keep growing in double-digit. There could be a variation quarter-to-quarter or a year-over-year, but I think in a compound annualized — if you take a three — three years horizon, we feel very comfortable being able to post the low-teens to mid-teens growth in the branded generic space.
Tushar Manudhane
Understood, sir. Thanks. That’s it so much.
Yogesh M. Agrawal
Yeah, we have a very strong product pipeline. Just if I’d like to add here, a lot of products are under registration and we feel that there’ll be a continuous pipeline for us to keep launching and there are a lot of products on the R&D, which is the 5% spend which you see, a lot of products are getting developed, which will be filed in these countries. So you can just continue to see that I think around 2.5% to 3% of our growth even in the emerging market is coming from the new products. So that will continue to happen for the next two, three, four years, whatever we — near-term horizon, which we can see.
Tushar Manudhane
No, that’s quite commendable and really appreciate the kind of growth you have exhibited in this market. Thanks. Thanks for your response.
Yogesh M. Agrawal
Thank you.
Operator
Thank you. The next question is from Rashmi Shetty from Dolat Capital. Please go-ahead.
Rashmi Sancheti Shetty
Yeah, thanks for the opportunity. Just on the US business, again, you know, we have seen both Y-o-Y and quarter-on-quarter growth and I guess that flu season was also weak. So what has really contributed the growth? Is it that the new launches has added or is the price erosion has come off? If you can say that? And whether this new product launches which you had done in second-half would actually lead to a better quarter-on-quarter growth in-quarter four in US business, if you can guide that also?
Yogesh M. Agrawal
Yeah, you’re right. There have been a number of launches which has happened. So we got the market business for those products. We also increased the market-share in our existing products. So that also got added. The flu season got pushed out a little. So we are — we are seeing the flu season taking off now actually in the — let us say, last week. So I think we feel that probably the next quarter is where the flu season effect will come in our next quarter.
So if you see last two quarters, we were around INR230 crores-odd for the quarter and this quarter we did INR260 crores. So we added INR30 crores. I think we should be able to improve on this figure also quarter-over-quarter for the next quarter, based on the launches, market-share which we have got and the flu season kicking-in, if all goes well, I think we should be able to post the number higher than the INR263 crores also for the next quarter.
Rashmi Sancheti Shetty
Understood. That’s really helpful. And the number of launches we have done in nine months is five. So any more expected in-quarter four?
Yogesh M. Agrawal
Quarter-four, I think I think maybe not I think. No.
Rashmi Sancheti Shetty
Okay.
Yogesh M. Agrawal
Yeah. No new launches in the quarter-four. Yeah.
Rashmi Sancheti Shetty
Okay. And in FY ’26, how many launches are we planning? Will it be six to eight launches like we do every year or it will be higher than that?
Yogesh M. Agrawal
No, I think we are looking at six to eight launches for the next year.
Rashmi Sancheti Shetty
Okay. And just on the EBITDA margin, you know, generally quarter-four is a weak quarter where all the major cost comes in and you mentioned that you’d be able to maintain this kind of EBITDA margin. So just want to reconfirm that despite quarter-four being weak, we would be able to maintain it or there is more to it?
Arvind K. Agrawal
No, I think we should be able to maintain it. As I mentioned, plus-minus 1% is always there, but otherwise we should be able to maintain it.
Rashmi Sancheti Shetty
Okay. And this is because our branded markets, US markets everywhere will be doing business, so even the higher-cost will get absorbed?
Arvind K. Agrawal
Absolutely. Absolutely. You are right.
Rashmi Sancheti Shetty
Okay. And my last question is related to tax-rate. You mentioned for FY ’25, it would be 24% but what it would be in FY ’26 and FY ’27, should we model in similar tax-rate or it would be higher?
Arvind K. Agrawal
’26, it will be almost same. ’27 may be higher because some of the exemptions will go away. So ’27 may be a little higher.
Rashmi Sancheti Shetty
So ’27, it would be in what range?
Arvind K. Agrawal
Maybe 25%.
Yogesh M. Agrawal
We’ll have to work-out actually.
Arvind K. Agrawal
We have to work-out, but not beyond that.
Yogesh M. Agrawal
Probably we can share this in the next call. Right now, we don’t have that figure of the — ready with us.
Rashmi Sancheti Shetty
Okay. Okay, sir. Thank you. That’s it from my side.
Yogesh M. Agrawal
Sure, sure.
Operator
Thank you. The next question is from Foram Parekh from Bank of Baroda Capital Markets. Please go-ahead.
Foram Parekh
Yeah. So my first question is, since we are talking about entering new therapies even in Asia and Africa market. So do we want to increase our guidance — growth guidance sir in next two to three years or similarly, even for the Indian market, since now we are entering newer therapies, so should we still look at 12% to 15% growth or can we look at higher-growth because of these newer therapies?
Rajesh M. Agrawal
For India, it would be too early to factor the growth rates or increase the growth rate expectation because of the two new therapies. As you would already know, it would take quite some time for us to really penetrate there are already-strong incumbent players in both the therapies that we have entered. So no, I don’t think that will have any significant impact on the growth rates because the growth rates are factored upon on a large base. These businesses would be very small for the next 12 to, 16, 18 months. So for domestic, we would not like to revise the guidance.
Yogesh M. Agrawal
In same for the international market, our entry is with the — for the P&F segment is very with the handful of people, which will be 30 people. So in the overall cumulative figures, which we already have a base, it’s a small percentage. Gynecology division will get added maybe in the 3rd-quarter. So next year, I think this new therapies will not add-up so much in the growth of the whole year of the numbers. But yes, they will be built over the years. So going-forward, I think they should become the sizable business.
Foram Parekh
No, my second question is now on the similar lines. So because we are talking about these businesses becoming bigger and eventually, so can we expect 30% kind of EBITDA margin and above, you know because of these newer therapies scaling up maybe from ’27 and beyond?
Yogesh M. Agrawal
Normally we don’t give so-far out guidances. We give year-to-year count guidances. So I think probably it will be best that we have this chat this conversation in the next con-call when we have all our figures, budgets, everything frozen. By logic, if you want to go, yes, when the growth will happen, the expense will not go that far, that high. So there’s always a possibility for expansion. But I can’t tell you what it will be and what range. I think let’s have this proposition in the next quarter.
Foram Parekh
Yeah. But are we looking at this 30% kind of the psychological mark of 30% and above kind of guidance since we are at 27%, 28% hovering around this level since quite some time now?
Yogesh M. Agrawal
I don’t think I’ll be able to give you any more insights on them what I shared with you. So my answer remains pretty much the same. Our endeavor will be to expand the margins. It is — is there a possibility? Yes, there is a possibility. What will be the number? I think I’ll tell you probably in the next con-call.
Foram Parekh
Okay. And my last question, if I may. I see SG&A cost ex of R&D contribution is quite low, which has increased the EBITDA margin to 28%. So going-forward, I mean, with these newer therapies and therefore lower the marketing expenses would chip-in. So any outlook or guidance on what the SG&A contribution we are looking at?
Arvind K. Agrawal
I think SGA contribution will remain almost the same as if sales will grow, that contribution also will grow, maybe little higher proportion in the initial period, but afterwards it will stabilize.
Foram Parekh
Okay, got it. Thank you.
Arvind K. Agrawal
Yeah.
Operator
Thank you. The next question is from Rahul Arora, who is an individual investor. Please go-ahead.
Rahul Arora
Yeah, thanks for the opportunity. So my question is related to and peptide. Are you planning to go into the peptide market in future?
Yogesh M. Agrawal
No, I think right now, now there is no such plans actively being pursued for the peptide
Rahul Arora
Thank you.
Operator
Thank you. Participants who wish to ask questions, please press star and one. The next question is from Harsh Bhatia from Bandhan Mutual Fund. Please go-ahead.
Harsh Bhatia
Yeah, hi, sir, good evening. Thank you. Just as a follow-up to the previous. I understand that we are not venturing into that part of the business, which is peptide and-or whatsoever but if you could help us like give some of your thoughts from the market dynamics. Obviously, there is another 12 months that are supposed to go when the international markets and even India goes off-patent for certain molecules. But just your thought process in terms of how the groundwork is shaping up, what is the feedback from the medical community as such, anything can be helpful.
Rajesh M. Agrawal
Semaglutide, undoubtedly is expected to be a blockbuster drug even in India when it comes off-patent. Of course, there are several companies that are working upon it. As we shared in our previous question, it’s too early to comment really. It’s 12 to 16 months out from today. So it’s like a moving target. I would not like to comment anything on that at this point, but yeah, it’s going to be a very lucrative market that is going to unfold in India for sure.
Harsh Bhatia
But you feel that as things stand today, again, whatever from your end could be helpful, but you feel that having a backward integration at the API level, this is the case for certain companies and maybe not for the companies, but you feel that could sort of give an advantage of given the fact that it is going to be a highly competitive market to that extent? The other point over here is also that the API is a difficult math to crack. So this will be.
Rajesh M. Agrawal
Look, it’s a complicated product. It’s not a — it’s not a small-molecule and therefore, it’s going to be a limited play. So if you’re asking from standpoint, we don’t have those capabilities. Capabilities very few companies in the country have those capabilities to be able to manufacture the same.
Harsh Bhatia
Sure. Thank you and all the best well.
Operator
Participants who wish to ask questions may press star and one. Well, That was the last question in queue. As there are no further questions, I would now like to hand the conference back to Mr. Yogesh Agrawal for closing comments.
Yogesh M. Agrawal
Thank you, everyone, for joining this call. In case there are any further questions that remain unanswered today. Please reach-out to our Investor Relations team. Thank you.
Arvind K. Agrawal
Thank you everyone for attending the call.
Operator
Thank you very much. On behalf of Ajanta Pharma, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.