Alembic Pharmaceuticals Limited (APLLTD) Q3 FY21 Earnings Concall Transcript

Alembic Pharmaceuticals Limited  (NSE:APLLTD) Q3 FY21 earnings concall dated Jan. 19, 2021.

Corporate Participants:

R. K. Baheti — Director – Finance & Chief Financial Officer

Pranav Amin — Managing Director

Shaunak Amin — Managing Director

Mitanshu Shah — Head – Finance

Analysts:

Damayanti Kerai — HSBC — Analyst

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Charulata Gaidhani — Dalal & Broacha Stock Broking Pvt Ltd — Analyst

Vishal Biraia — Aviva Life Insurance — Analyst

Rashmi Sancheti — InCred Research — Analyst

Anmol Ganjoo — JM Financial — Analyst

Ranvir Singh — Sunidhi Securities — Analyst

Abhishek Sharma — Jefferies — Analyst

Gagan Thareja — Kotak Investments — Analyst

Anubhav Aggarwal — Credit Suisse — Analyst

Nitin Agarwal — DAM Capital — Analyst

Ayush Mittal — Mittal Analytics — Analyst

Nimish Mehta — Research Delta Advisors — Analyst

Prakash Agarwal — Axis Capital — Analyst

Yash Gupta — Angel Broking Ltd — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Alembic Pharmaceuticals Limited Q3 FY ’21 Earnings Conference Call. We have with us today from the management, Mr. Pranav Amin, Managing Director; Mr. Shaunak Amin, Managing Director; Mr. R. K. Baheti, Director – Finance and CFO; Mr. Mitanshu Shah, Head – Finance; Mr. Jesal Shah, Head – Strategy; and Mr. Ajay Kumar Desai, Senior Vice President – Finance. [Operator Instructions]

I now hand the conference over to Mr. R. K. Baheti, Director – Finance and CFO. Thank you, and over to you, sir.

R. K. Baheti — Director – Finance & Chief Financial Officer

Thank you very much. Good evening, everyone. Thank you all for joining the third quarter results conference call. I’m sure you would have received the results by now. However, let me briefly take you through the numbers for the quarter ended, nine months ended 31st March 2020 — I’m sorry, 31st December 2020.

Let me begin with financials first. During the quarter, our revenue grew by 9% to INR1,314 crores; EBITDA grew by 31% to INR401 crores, which is 30% — 31% of sales; profit before tax went up by 24% to INR352 crores; and profit after tax went up by 25% to INR293 crores.

I’m happy to inform you that for the first time, Rhizen, our associate company, after recouping all the work-in-progress, CI — CWIP, posted a profit for the first time, and our share of profit of INR26 crores is included in the above numbers. EPS for the quarter is INR14.88 per share, this is for the quarter, versus INR12.42 in the corresponding quarter in the previous year. This year quarter, of course, the capital is enhanced. So this is on enhanced capital, INR14.88.

During the nine months, YTD December, our total revenue grew by 21% to INR4,113 crores; EBITDA grew by 40% to INR1,272 crores, which is 31% of the sales again; and profit after [Phonetic] tax went up by 52% to INR1,126 crores; profit after tax went up by 53% to INR927 crores. EPS for the nine months, again on the expanded capital, is INR48 plus per share on a weighted average basis versus INR32 per share on the old capital in the corresponding nine months in the previous year.

Coming to the capex, capex for the quarter is INR197 crores, cumulatively for nine months is INR509 crores. And cumulative capex for the ongoing projects, the new products — projects which are still under CWIP yet to go for production, is about INR1,700 crores. Aleor — our investments in Aleor is about INR60 crores for the quarter and nine months is INR125 crores. Cumulative funding to Aleor is INR800 crores. As we have reported last quarter, net borrowing is pretty low now at around INR300 crores, gross borrowing is INR600 crores, net debt equity is marginal at 0.08.

I will now hand over the discussion to Pranav for his presentation on International business.

Pranav Amin — Managing Director

Thank you, Mr. Baheti. We had another decent quarter in the International business, largely driven by the API and ROW markets. The R&D expense was INR148 crores, approximately 11 percentage of — 11% of sales. We filed one ANDA during the quarter. We also received eight approvals in the quarter, including two tentative. We cumulatively have 137 ANDA approvals, which includes 18 tentative approvals. During the quarter, we launched seven products, including Asenapine and Timolol, which were interesting opportunities. We plan to launch around five to six products in the fourth quarter as well.

The international formulations business grew by 3% to INR683 crores for the quarter and 27% to INR2,233 crores for nine months. US generics de-grew by 1% to INR512 crores for the quarter and grew 21% to INR1,689 crores for the nine months. Ex-USA generics continue to grow by 14% to INR171 crores for the quarter and by almost 50% to INR544 crores for the nine months. API business also grew by 21% to INR214 crores for the quarter and by 34% to INR741 crores for the nine months.

I now invite Shaunak to share some insights on the India branded business.

Shaunak Amin — Managing Director

Yeah. Good afternoon, everyone. So the India branded business, on the back of some recovery in the market along with a better operational performance, we did manage to show a 14% growth for the quarter and a 5% growth cumulation [Phonetic] for nine months of the financial year. Largely, the growth in this quarter was driven by our focused specialty segments, which is 15% growth in cardiology, 19% growth in gynecology, 19% growth in gastro, and 30% growth in diabetology, which is a continuation of the performance that we saw in Q2 also. In antibiotics, on a flat market, we did manage to clock in at positive 3% growth on the antibiotic side. And on the cough and cold side, the market still continues to underperform, and we continue to underperform along with the market in Q3.

In terms of new launches, we had two important launches in Q3, which was Dapagliflozin, as well as Rivaroxaban in the cardiology space, cardio-diabeto space, which we feel going forward will give us a strong traction in sales in the coming years. Within the portfolio, like I explained — emphasized last quarter, the key focus brands with — were the ones which largely drew — were able to — were the ones that we were able to drive this growth, and going forward, we expect this momentum to continue.

On the acute side of things, especially cough and cold, we’re eagerly awaiting some normalization of the market, which we expect that the vaccine roll-out to happen in Q4. On the back of that, we’re extremely confident that the kind of performance we’ve been able to pick up in the specialty side of things, we’d be able to demonstrate those in cough and cold, as well as our antibiotics portfolio once market reaches to more normalization level — normal levels in terms of overall growth numbers month-on-month.

So, that’s all. I’d like to open the floor for Q&A, please.

Questions and Answers:

Operator

Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Damayanti Kerai from HSBC. Please go ahead.

Damayanti Kerai — HSBC — Analyst

Hi. Thank you for the opportunity. So my question is on India business part. Just wanted to understand that better. So in most of the focus therapies, you have achieved good growth. So can you bit more discuss there like what’s helping us? New launches, of course, one big driver, but what other factors are leading to this kind of very strong growth for India market? That’s my first question.

Shaunak Amin — Managing Director

Yeah. So, on the India market, growth is more largely at the moment driven majority by the old products in our portfolio. The new launches are two new one, as you know, in India, it takes couple of years in the cardio-diabeto and the specialty space for the brands to really pick up large momentum. So yes, the new brands have contributed in a small way, but largely it’s the old brands. What has helped in driving this growth is I think in the last two years of reorganizing a lot of our trade practices along with a lot of refocus and reorganizing our portfolio. I think — like I’ve been saying since Q4 last financial year that our business has come alive. [Phonetic] Unfortunately, I think, it was the pandemic which kind of didn’t allow us to show it. Now as things are returning to normal, we’re starting to see the benefits, all the restructuring exercises we’ve done in the India portfolio, especially in the specialty side.

Damayanti Kerai — HSBC — Analyst

Okay. So, still the growth is largely driven by a pickup in the older brands, as you mentioned, and the contribution from new launches will take some time to reflect in the numbers, right?

Shaunak Amin — Managing Director

To contribute large number — to contribute in a large way to the growth, yes, it will take few quarters still.

Damayanti Kerai — HSBC — Analyst

Okay. And last quarter, we had some benefits for Azithromycin demand pickup. So assume that is still continuing for this quarter, right?

Shaunak Amin — Managing Director

No. So this quarter, the Azithromycin benefit has tapered down. And if I could give you our overall number versus a de-growth of overall antibiotic market, we could show a plus 3% growth on our antibiotic portfolio. Obviously, a large part of that was contributed to Azithromycin growth, but we definitely see a more easing up of growth on the Azithromycin side at the back — fag end of Q3, which we are seeing continuing into Q4.

Damayanti Kerai — HSBC — Analyst

Okay. And my second question is on the cost part. So on India business, how much of cost is back to pre-pandemic level? Because other operating cost, I think, despite pickup in operations, we saw sequential decline, correct?

R. K. Baheti — Director – Finance & Chief Financial Officer

So, as far as cost is concerned, both the field activities now are almost at pre-COVID level, same the customer meeting and meeting in the field is full stream, promo cost is back to normal. So we are back to normal almost.

Damayanti Kerai — HSBC — Analyst

So this — second — difference between third quarter and second quarter, we should understand that large difference is coming due to lumpiness in the R&D expense?

R. K. Baheti — Director – Finance & Chief Financial Officer

So that’s a consolidated number which is — which factors a lot, like, in Q2, we had a larger R&D expense, which is little lower this time. But R&D is dependent on lot of moving factors. But India business expenses are more or less in — normally.

Damayanti Kerai — HSBC — Analyst

Sure. Thank you. I have more question. I’ll get back in the queue.

Pranav Amin — Managing Director

Thanks.

Operator

Thank you. The next question is from the line of Tushar from Motilal Oswal. Please go ahead.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Am I audible?

Operator

Yes, sir. Now you are.

Pranav Amin — Managing Director

Yes.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Just on the US business side…

Operator

Excuse me, this is the operator. I’m sorry to interrupt. Mr. Tushar, your voice is feeble. We can’t hear you.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Is it clear now?

Operator

May we request to use your handset, please.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Is it better now?

Operator

Yes, we can hear you now.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Yeah. Just on the US side, I would like to understand given that there would be some delay in the inspection of the new facilities, so considering your earlier guidance of INR450 crores expenses coming in FY ’22, will that get pushed? That is my first question.

Pranav Amin — Managing Director

Yeah. So as far as the expenses are concerned, the one that we — the facility that we’ve done maximum filings from F-3 that I think we’ve done about five to seven filings already. There are some products, which are in shortage. We’ve been discussing with the FDA. I’m hopeful that they will be here within the next quarter or two. But, listen, let’s see how it goes. No one knows what’s happening in this world. But I’m hopeful that within the next six months, they should be here for an inspection. So the expenses will start hitting once we commercialize sales from that plant.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Got you. And on the filing side, given that these new facilities are filing based, supposed to pick up, so when do we see that happening?

Pranav Amin — Managing Director

So, we’ve already started — see, okay, F-4 is an extension of — not extension, but it’s an oral solid. So we’re not doing any new filings per se from F-4. That will be the existing facility. We will move some site transfer products over there for additional capacity. In terms of F-2, which is oncology block, we’ve already done some filings. The injectables, we will do — excuse me, the injectables, we will do by the end of this year. And the injectable block, the general injectable, we’ve already done five to seven filings and that’s been — the FDA has given us date as well, which is, of course, got pushed back because of COVID.

Tushar Manudhane — Motilal Oswal Asset Management — Analyst

Got it. Thanks. That’s it from my side.

Pranav Amin — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Charulata Gaidhani from Dalal & Broacha. Please go ahead. Charulata Gaidhani from Dalal & Broacha, your line is unmuted. Please go ahead with the question.

Charulata Gaidhani — Dalal & Broacha Stock Broking Pvt Ltd — Analyst

Yeah. Congrats on the good set of numbers. My queries, if you could throw us some more insights into the India business, because India business growth has come across [Technical Issues] doing well across the industry. There is a 9% growth in acute and also in the animal health category. So can we consider this as a new quarterly base and how do you see this going forward?

R. K. Baheti — Director – Finance & Chief Financial Officer

Could you just repeat your question? The voice was breaking. Have you — Shaunak, you heard this?

Shaunak Amin — Managing Director

Yeah. So, no, you are right, Charulata. India business has done well. And I think for last few quarters, we have been explaining our strategy to revamp the India business, make it more sustainable, make it more profitable, and some of these efforts seem to be paying off. Going forward, yeah, we are — we remain quite confident of doing better than the market in most segments of our focus.

Charulata Gaidhani — Dalal & Broacha Stock Broking Pvt Ltd — Analyst

The reason of this growth, is it that you have widened the reach or have you taken an increase in prices?

Shaunak Amin — Managing Director

No, it’s both. Actually, it’s a recovery in the market and our operational efficiencies, both have combined to take us to this growth number. Price increases and all those are part of life for any pharma company. You know there are lot of restrictions on price increases. We do wherever there is a — it is allowed by the law and the competition. But that’s not an important factor. Important factor is the operational efficiencies and some recovery, of course, in the overall market.

Charulata Gaidhani — Dalal & Broacha Stock Broking Pvt Ltd — Analyst

Right. And my second question pertains to the US. US has come down to around $70 million in the quarter. So do you see this going down further, or you think this is the bottom?

Pranav Amin — Managing Director

So, the US business, as you know, our last quarter — last eight quarters or so have been quite exceptional in the US business. This was largely as the market knows, due to various reasons, such as sartans and shortages. So…

Operator

Excuse me, this is the operator. Participants, the line for the management has dropped. We request you all to please stay connected while we reconnect the management. Ladies and gentlemen, thank you for patiently waiting. The line is reconnected. Sir, you may go ahead.

Pranav Amin — Managing Director

Yeah. Thank you. So, yes, the US business, as I was saying, the last eight quarters for the US business have been quite exceptional. As everyone knows, there was a lot of shortages in the market and a lot of disruptions, which caused this fantastic growth for us. So quarter-on-quarter, it’s tough to say. There has been some correction. As I mentioned in the last couple of calls that the markets are stabilizing with the sartans. Moving forward, I don’t want to say quarter-on-quarter, but we still stick to our guidance. For two, three years, we expect to be — by FY ’24, closer to the $400 million odd in terms of US sales.

Charulata Gaidhani — Dalal & Broacha Stock Broking Pvt Ltd — Analyst

Okay. Yeah. Thanks. All the best.

Operator

Thank you. The next question is from the line of Vishal Biraia from Aviva Insurance. Please go ahead.

Vishal Biraia — Aviva Life Insurance — Analyst

Hi. Pranav, what would have caused a lower growth for the quarter in the US? Would it be pricing pressure on sartans or loss of market share or something that you can share?

Pranav Amin — Managing Director

Yeah. So, sartans is a big part of it. So, yes, there was — there is incremental competition in sartans. That is one of the reasons. And we lost some accounts. We didn’t want to bid at — prices that were there. So we let go of some accounts in the sartans. That is predominantly the reason. As you know, the last — as I mentioned, the last eight quarters, there have been a lot of disruptions in the market and there were a lot of opportunities, very high priced opportunities, which are no longer — which are very less now. But, listen, it’s US market. You keep finding opportunities. So let’s see how it goes.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay. So incrementally, as we see ahead in 4Q, so should it be similar to what we see — with what we saw in 4Q or should we see incremental deterioration, any perspectives for the coming two, three quarters?

Pranav Amin — Managing Director

It’s very tough to give a guidance. But as I’ve said, there is a lot of disruptions. If some disruptions happen, then it could be better. We just recently launched some new products in December. So it’s really a matter of what we get. I think I expect it to be around similar, what I’ve said around about $70 million-odd that I’ve been guiding for.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay. You were planning to launch some limited competition products in the US…

Pranav Amin — Managing Director

We’ve launched — yes, we launched two in December — actually, three in December. One was Asenapine, which was a day one launch. There were three other people in the market. The other one was a Timolol, where the sole exclusivity that we’ve got on that. So both are interesting opportunities. Apart from that, we also launched Tavaborole, which is a derm product, which is an interesting product, as well as LATISSE or bimatoprost.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay, okay. So overall, if you see the pricing pressure in US like for the last — first half of this financial year, we saw that the pricing pressure had reduced to low-single-digit. So does that scenario continue for — overall for the US business?

Pranav Amin — Managing Director

So, as I mentioned in the last call, we’re seeing a lot more people enter the market again. So, there’s two aspects of it. One is the disruptions that you see due to shortages, that has become less. So this does not give you a scope for higher price, one-time buys what we saw over the last eight quarters. Whereas on the sartans, it’s relatively stable. So I’m not as worried about. Going forward, it’s relatively more stable. So it will be easier to predict in the next couple of quarters how it’s going to move.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay. If I got you right, the overall scenario seems to be still stable, would be at lower…

Pranav Amin — Managing Director

Yeah. Overall scenario, our long term, what we expect for the next two years or so, I’m pretty confident, I’m still very bullish on the US market. Our facilities are ready, awaiting an inspection, especially F3 the injectable one where we already filed about five, seven products. I’m still quite bullish on the US market.

Vishal Biraia — Aviva Life Insurance — Analyst

Right. And just coming to the non-US market, the growth this quarter would have been driven still by Europe, because of the serialization issues getting resolved or would have been largely the new entries like sort of ramping up [Indecipherable]?

Pranav Amin — Managing Director

So, it’s across the territories. The three main territories that we are part of is Europe, Canada, Australia. And I think in all three territories, we saw good focus on the supplies and there was growth across the territories.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay. So — and just one last question on the API side. The profitability on the API business continues to be as good as it was in 1H?

Pranav Amin — Managing Director

Yeah. So, in the first half, we saw a lot more opportunities in API. The profitability still remains to stay good for us. As I’ve mentioned many times that we have always been more of a premium kind of a player in APIs and we like on the — we only focus on the regulated markets per se. So pricing has been fine. Having said that, after the first half of the year where there were a lot of disruptions from China that has become less, and I think Chinese suppliers are back in the market.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay. And the pricing also for IP — API, the pricing would have also reduced a bit, because now the Chinese suppliers are back?

Pranav Amin — Managing Director

Not for us. We are not seeing that.

Vishal Biraia — Aviva Life Insurance — Analyst

Okay. So profitability for you would continue to still be incredibly better?

Pranav Amin — Managing Director

Yeah. So far, yes.

Vishal Biraia — Aviva Life Insurance — Analyst

All right. Sir, I’ll come back in the queue for my questions. Thank you.

Pranav Amin — Managing Director

Thank you.

Operator

Thank you. The next question is from the line of Rashmi Sancheti from InCred Research. [Phonetic] Please go ahead.

Rashmi Sancheti — InCred Research — Analyst

Yeah. Thanks for the opportunity. Most of the questions have been answered. Just two things. On debt, current gross borrowing stands at INR600 crores. So what is the outlook on that? Will there be a major repayment in FY ’22 also, or will it remain at the same level?

R. K. Baheti — Director – Finance & Chief Financial Officer

So, debt consists of largely the NCD, which will fall due in next year ’22, ’23, and will be paid in ’22, ’23.

Rashmi Sancheti — InCred Research — Analyst

Sir, how much would it come down?

R. K. Baheti — Director – Finance & Chief Financial Officer

So in next year, it doesn’t come down — I mean, it will come down by INR100 crores.

Rashmi Sancheti — InCred Research — Analyst

Okay. In FY ’22. And sir, in FY ’23?

R. K. Baheti — Director – Finance & Chief Financial Officer

Yeah. It gets repaid. Yeah, fully.

Rashmi Sancheti — InCred Research — Analyst

Completely. Okay. And sir, on R&D part, in the earlier part of the year, you said that R&D would be roughly around INR700 crores. And I think in the nine months, we have done around INR475 crores. So, is it something that we’ll stick to our guidance or we believe that it would be lower than INR700 crores?

Pranav Amin — Managing Director

So, you’re right. I think at the start of the year, we have said INR700 crores. But as you know, first quarter was a little bit of a wash out or a little lower R&D activity due to the lockdowns and stuff like that. So I think we will end up at about INR630 crores to INR650 crores or so for the year.

Rashmi Sancheti — InCred Research — Analyst

Okay, sir. And sir, lastly on India business, if you could help us understand that whether there were any new launches, I mean, how many launches have we done in nine months in both specialty and the acute segment?

Shaunak Amin — Managing Director

In the last five months, we have launched one product in the acute side, and we’ve launched one — two new products in the specialty side. We launched [Indecipherable] product in the acute side of the business and we’ve launched Dapagliflozin in the cardio-diabeto space along with Rivaroxaban also in the cardio-diabeto space.

Rashmi Sancheti — InCred Research — Analyst

Okay, sir. All right. Thank you.

Operator

Thank you. The next question is from the line of Anmol Ganjoo from JM Financial. Please go ahead.

Anmol Ganjoo — JM Financial — Analyst

Yeah. Hi. Thank you. Thanks for taking my question. A couple of questions. One is that for the new launches that we had this quarter in the US a couple of interesting opportunities that you refer to. For what period during the quarter, did we get the full benefit of those launches? Were they…

R. K. Baheti — Director – Finance & Chief Financial Officer

Are we speaking about the Indian launches we had?

Pranav Amin — Managing Director

Anmol, they were launched in December itself, and I think in the latter half of December. So I think we only saw about two, three weeks of sales at the most.

Anmol Ganjoo — JM Financial — Analyst

Okay. In that case, given that we’ve had fairly strong growth even in India, which is a higher gross margin contributor, the sequential decline in margins, although still healthy, points to a fairly grim pricing action sequentially. So is it fair to say that this quarter, therefore, now represents the normalized level of sartan contribution and incremental deterioration for this piece, which we’ve been worried about for the last couple of quarters, is hard to conceal?

R. K. Baheti — Director – Finance & Chief Financial Officer

I mean, I really do not understand because our margins have been pretty good and have been consistent. I mean a few basis points here or there doesn’t really matter, but the GC continues to be at around 75%, the EBITDA continues to be at around 30%, which is what we had.

Anmol Ganjoo — JM Financial — Analyst

I understand that, Mr. Baheti, and full complements to you for achieving that. What I’m trying to understand is that this quarter, therefore, given the deterioration we have seen in the sartan contribution, is it the new base going forward therefore? Because I think only sequentially, the pricing action on the sartan side in US seems to be not in line with the last eight, nine quarters, something which we have been worried about given the sustainability. So, that’s what my question is.

R. K. Baheti — Director – Finance & Chief Financial Officer

Yeah. So hopefully, in the foreseeable future, we should be able to retain our margins.

Anmol Ganjoo — JM Financial — Analyst

Okay. And the sartan contribution, therefore, this quarter is most likely the bottom, right?

Pranav Amin — Managing Director

Most likely is what? Sorry, I didn’t hear that last bit.

Anmol Ganjoo — JM Financial — Analyst

The bottom. The trough.

Pranav Amin — Managing Director

Yeah, I mean, I don’t know of the trough or how much lower it can go, but I think, yeah, it is what it is. So moving forward, the contribution from sartans is lower than what it was in the first half of the year.

Anmol Ganjoo — JM Financial — Analyst

So basically, Pranav, what I’m trying to understand is the vulnerability of the US sales to retreat, any adverse competitive environment of the like that you referred to in your comments to the sartan picture. So I think…

Pranav Amin — Managing Director

Yeah.

Anmol Ganjoo — JM Financial — Analyst

You have a reasonable confidence that it’s not the case, right?

Pranav Amin — Managing Director

Yeah. So, as I mentioned earlier, somebody else asked, if you ask me about my moving forward going to FY ’23, FY ’24, I think our internal estimates stay intact. We’re still confident about the US market. As regards to sartans, I also mentioned, in the last eight quarters, there have been a lot of disruptions in the market. So it stabilized quite a bit, so it’s still easier to predict now because of a lot of disruption in the past sort of one-time buy opportunities across the board. So that’s what caused in the past. But I think moving forward, I think it’s settled for now in my opinion.

Anmol Ganjoo — JM Financial — Analyst

Thank you so much, Pranav, and congratulations for yet again good quarter.

Pranav Amin — Managing Director

Thanks. Thanks.

Operator

Thank you. The next question is from the line of Ranvir Singh from Sunidhi Securities. Please go ahead.

Ranvir Singh — Sunidhi Securities — Analyst

Yeah. Thanks for taking my question. Sir, one question related to your Aleor JV. So if you could just give a detail what the status currently we have there? So of the current approvals in this quarter like six final approvals, how much was from Aleor? And are we making a breakeven at the bottom line at this level?

Mitanshu Shah — Head – Finance

So, I mean for Aleor, we started the commercial sales last year itself, we are aware about it. I mean the sales in the overall context is very miniscule. We had couple of approvals in the current basket of approvals for the quarter from Aleor basket as well actually. Going ahead, when we have the critical basket, we have 30, 40 products approved and when we start selling that in the market, we will kind of see how the derma portfolio performs in the overall scheme of things. Right now, it is a limited number at this point in time.

Ranvir Singh — Sunidhi Securities — Analyst

So are we making a losses there? And what would be the quantum of loss currently you’re making on a quarterly basis?

R. K. Baheti — Director – Finance & Chief Financial Officer

So, yeah. So there is a loss at this moment, but because you’re in a line-by-line consolidation, it gets consolidated. You can get a feel of the losses based on the minority interest, which is getting disclosed in the annual report — I mean the financial results.

Ranvir Singh — Sunidhi Securities — Analyst

Okay. Fine. Okay. And then secondly, you see in presentation, we have one injectable approved. So, is this a tentative approval or final approval?

Shaunak Amin — Managing Director

I don’t know we have injectable approved as yet. If it is, then it’s a tentative, it won’t be a commercialized.

Ranvir Singh — Sunidhi Securities — Analyst

Okay. And so this is from F3 facility, right?

Shaunak Amin — Managing Director

It is from a CMO. [Speech Overlap] This one is CMO, we haven’t launched that, yes, right.

Ranvir Singh — Sunidhi Securities — Analyst

Okay. Fine. Yeah. That’s all from my side. Thank you.

R. K. Baheti — Director – Finance & Chief Financial Officer

Thanks.

Operator

Thank you. The next question is from the line of Abhishek Sharma from Jefferies. Please go ahead.

Abhishek Sharma — Jefferies — Analyst

Thank you for taking my question. Sir, I had a question on the license. Given that we are heading into PDUFA date for monotherapy for two indications with good data this year, what kind of milestone and royalty can we expect for Rhizen and thereby for Alembic in FY ’22?

R. K. Baheti — Director – Finance & Chief Financial Officer

So I wish I had answer. I mean this is a difficult question. The products will be — is already out licensed to TGTX, so they will be doing the marketing. I’m entitled to receive a high-single-digit royalty on sales. So depending on the approval time and how they launch and what kind of market share they capture, the royalty will be dependent on that. Difficult for me to predict, but we are pretty hopeful of a good number.

Abhishek Sharma — Jefferies — Analyst

And sir, milestones?

R. K. Baheti — Director – Finance & Chief Financial Officer

So milestone also I think once the product is launched, we would be eligible for some more milestones.

Abhishek Sharma — Jefferies — Analyst

And nothing on approval?

R. K. Baheti — Director – Finance & Chief Financial Officer

Now approval and launch will be almost simultaneously. Yes, on launch now, nothing on approval.

Abhishek Sharma — Jefferies — Analyst

Understood, sir. Thank you, sir.

Operator

Thank you. The next question is from the line of Gagan Thareja from Kotak. Please go ahead.

Gagan Thareja — Kotak Investments — Analyst

Yeah. Hello, am I audible?

R. K. Baheti — Director – Finance & Chief Financial Officer

Yeah.

Gagan Thareja — Kotak Investments — Analyst

Yeah. Good evening. Thanks for letting me ask the questions. My first question is around your India piece. If you could give — to start with, give a ballpark idea of the contribution of sales from anti-infective, gastro, and cough and cold for Alembic?

R. K. Baheti — Director – Finance & Chief Financial Officer

So, our numbers are given in the table in the Investor Presentation, which is part of our update.

Shaunak Amin — Managing Director

Yeah. But roughly if you look at it acute to specialty, 40-60.

Gagan Thareja — Kotak Investments — Analyst

Okay. And as you’ve launched Dapagliflozin and Rivaroxaban, these are products quite a few others would have launched as well, these having gone off-patent, and you are trying to push through into the chronic therapies and building up there. But that’s a strategy that I think a lot of your peers would also be following. Given that situation, how do you differentiate and manage to maintain the growth that we’ve seen in this quarter for the India piece?

Shaunak Amin — Managing Director

Yeah. So first and foremost, I don’t think this is a one-off growth quarter. Because if you see even in Q2, we have a 16% growth in the cardio business, gastro grew by 16% in Q2, and again in Q3, it continued and we see this trend based on numbers in the market. In regards to differentiation, I think the question is far more complicated. I think we can have a separate call if required to discuss it in detail, but I think when it starts — there are too many things we can talk about differentiation in terms of competitive peers.

In terms of the new launches, we are extremely confident that we will be able to take good profit share in all the new cardio-diabeto launches, partly this is based on the fact that we’ve seen strong traction around our customers. We believe in our strategy and we feel we’ve done good justice to the launch to private [Phonetic]. So, so far what we’re seeing is I think we are set up well to take good advantage of this — of all the new launches, despite the competition that’s there.

Gagan Thareja — Kotak Investments — Analyst

The second question is around in the QIP. You’ve been indicating that you’ve gone through a period of very heavy capacity building, which will now trail out and therefore, I would presume you would be positioned for a very good, healthy free cash flow generation, which could have been used for the debt repayment. And therefore, I was wondering what was the thought process for the QIP given that you would get into a strong FCF generation mode already?

R. K. Baheti — Director – Finance & Chief Financial Officer

Sure. So I think a lot of discussions had happened in October, because the QIP was in August. And in October results call, there were quite a — this issue was discussed in quite a detail. Just to briefly reiterate, we believe we still have a lot of growth opportunities, particularly in the international markets. And we’ll continue to invest. So we have just taken a small approach. [Phonetic] We wanted these facilities to be inspected, approved, new products sold out. And we already have on our drawing board further expansion plans. So we believe that QIP will de-risk the entire balance sheet, and that will — so there is an element of businesses that we didn’t want to complete with the financial risk and that’s always a prudent strategy. Alembic had always been a conservative organization. We’ve been very, very major on equity dilution and we’re very conscious about it. That actually demonstrates our confidence in the international business.

Gagan Thareja — Kotak Investments — Analyst

Okay. Third question is around the US sales. If I have — if I got it correct, you’ve been pointing out that on an average 20 to 25 approvals is a possible base case scenario for you in US in the coming years, which would mean that your entire pending pipeline could get monetized in three to four years and the size of that pipeline at 118 pending, I’d presume, would be higher than the number of products you have in the market. Also there would be better filings in terms of the quality, which would mean that you should be in a position to be 80% to a double of your current base by the time you monetize all of this. You’ve also indicated last quarter that in — by FY ’24, you could be $400 million to $500 million, but now I think you’re talking of around $400 million. Any reason for…

Pranav Amin — Managing Director

No, I’ve always said, it is very tough to say on the generic side. So when I say guidance side — it’s not a guidance per se. I said that companies at the similar phase that we were in, with the kind of filings and what they’ve done, what would be our internal target. Yeah, our internal target would still be $400 million to $500 million, anywhere between that. That doesn’t change.

Gagan Thareja — Kotak Investments — Analyst

Okay. Lastly sir, between [Indecipherable] and the new costs that you’ll incur with the new plants coming in next year, what could be the sustainable sort of EBITDA margin profile for you?

R. K. Baheti — Director – Finance & Chief Financial Officer

So they will go hand-in-hand. Look once we have — and there can a bit of time left, but otherwise, they will go hand-in-hand. So once we have the new plants inspected, approved, the commercial production rolled out of that, yes, the overheads will start hitting the P&L, but so will be the revenue generated out of those plants. So I always said that the 30% on a larger sales for your ambitious EBITDA margin may come down a bit, but I think in absolute terms, the business will be significantly bigger at that time.

Gagan Thareja — Kotak Investments — Analyst

Okay. Thanks. Thanks for answering my questions. That’s all from my side.

Operator

Thank you. The next question is from the line of Anubhav Aggarwal from Credit Suisse. Please go ahead.

Anubhav Aggarwal — Credit Suisse — Analyst

Yeah. Thank you. Mr. Baheti, one question on the India market. You mentioned that three-fourth activity is fully back at pre-COVID levels. Just one question on the promotion spend as well. My understanding was that till the last quarter, I’m not very updated what’s happened in this quarter. On the conferences side at least for the doctors, everything was digital so far. So, what’s the update here? Is that still digital and that part is not yet back?

R. K. Baheti — Director – Finance & Chief Financial Officer

So we had — Shaunak had been saying consistently, we have moved away from those CRM and those conference-sponsoring activity a long time back. Most of our pro-activities are now science-centric or in-clinical or support-centric. So — and we had already taken a beating sometime back due to that, but we thought that being compliant and later on, spread is always going to be sustainable. So that has not really impacted our P&L if you ask me.

Anubhav Aggarwal — Credit Suisse — Analyst

So would you say that your India level margins are now very similar to what you were doing at pre-COVID, they are not at elevated levels as were for the peer set in the first six months of this year?

R. K. Baheti — Director – Finance & Chief Financial Officer

So, now they are at pre-COVID levels.

Anubhav Aggarwal — Credit Suisse — Analyst

Okay, sir. Thank you very much.

R. K. Baheti — Director – Finance & Chief Financial Officer

Thanks.

Anubhav Aggarwal — Credit Suisse — Analyst

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

Nitin Agarwal — DAM Capital — Analyst

Sir, on — Mr. Baheti, is there anymore — when we’re looking at the capex plan for the next couple of years, how should we look at — should think about our capex now?

R. K. Baheti — Director – Finance & Chief Financial Officer

So I think during our QIP or post-QIP interactions, I had already said that there are plans to add couple of more injectable lines on F3 once we have this inspection and approvals in place. So we had created an infrastructure, which is a little larger than what we have populated currently. We have populated three lines and it can take two to three more lines. We have already initiated, what do I say, the concept paper for installing two more lines going ahead.

Nitin Agarwal — DAM Capital — Analyst

Sure. So then what kind of…

R. K. Baheti — Director – Finance & Chief Financial Officer

Sorry. In addition to that, we are — we said we are already making more investments in API. Now that the government has come out with a little liberal guidelines for granting environment and their approvals and API had been underinvested, if I can say so, in last couple of years, we are stepping up our investments on API. So these two areas will take some investments going forward.

Nitin Agarwal — DAM Capital — Analyst

Sir, is there any amounts which are sort of earmarked towards these two — towards API and injectable capex going forward?

R. K. Baheti — Director – Finance & Chief Financial Officer

So going forward, excluding the normal maintenance capex, we should be spending about INR400 crores to INR500 crores in next year and a half, two years.

Nitin Agarwal — DAM Capital — Analyst

That’s INR400 crores, INR500 crores each, right?

R. K. Baheti — Director – Finance & Chief Financial Officer

No, both together.

Nitin Agarwal — DAM Capital — Analyst

Across the injectable and the API business?

R. K. Baheti — Director – Finance & Chief Financial Officer

These two, I mean, new initiatives. And then there are about INR250 crores, INR300 crores of annual maintenance capex, that would continue. That includes R&D also.

Nitin Agarwal — DAM Capital — Analyst

So, sir, broadly speaking about INR1,000 crores of capex over the next two years, right, including maintenance and growth?

R. K. Baheti — Director – Finance & Chief Financial Officer

Yeah. You are right.

Nitin Agarwal — DAM Capital — Analyst

And sir, on the other emerging market businesses, that’s sort of scaled up very nicely in these nine months. Mr. Shaunak, in this — what is this business — so how should we look at this business now intimately going forward? Because this is now a reasonably sized business for us at about almost like INR800 crores per annum, almost $100 million [Phonetic] business, which is amongst the larger emerging market businesses amongst the peer group also.

R. K. Baheti — Director – Finance & Chief Financial Officer

We are not — Nitin, we are not in emerging markets. These — what we call ROW markets are all regulated markets, the largest part of it is Europe and followed by Canada, Australia and so on.

Nitin Agarwal — DAM Capital — Analyst

Okay, sir. And this is largely [Speech Overlap].

R. K. Baheti — Director – Finance & Chief Financial Officer

How — we look at it is India market, US and ex-US, ROW, but all of them are regulated markets.

Nitin Agarwal — DAM Capital — Analyst

Okay. So it’s like of Canada and EU largely, those kind of markets?

R. K. Baheti — Director – Finance & Chief Financial Officer

Yeah.

Nitin Agarwal — DAM Capital — Analyst

Okay, sir. Okay. Thank you, sir.

Operator

Thank you. The next question is from the line of Ayush Mittal from Mittal Analytics. Please go ahead.

Ayush Mittal — Mittal Analytics — Analyst

Good afternoon, sir. Sir, in reference to your earlier update about the US — pending US FDA inspection for the new plants, I wanted to understand more about it. Like, FDA inspection is to happen in the quarter, [Phonetic] when do you expect to get on to commercialization and perhaps obtain optimum utilization?

Pranav Amin — Managing Director

So what has happened is because there are some products, which are in shortage and which are awaiting, there is no patent expiry on that, so those will start get launched right away. So right after the inspection, I expect that as we get the go ahead, they will give the ANDA approval as well. In terms of capacity utilization full on, that will take a while because there’s three lines and then we’re going to add more lines as well. So that will take a while, but the plant will start contributing once we start commercializing these products.

Ayush Mittal — Mittal Analytics — Analyst

Yeah. By optimum utilization what I mean is that broadly good enough to cover the additional cost of depreciation, manpower, and so many other things that have been pending to be expensed.

Pranav Amin — Managing Director

Very tough to predict I’d say right now and I can’t really give a guidance on that. So I’m sorry.

Ayush Mittal — Mittal Analytics — Analyst

And also given COVID, is there — you see that this is reasonable to expect this inspection to happen in a quarter or two or there can be more delays? Are you seeing US FDA inspection on — in these times?

Pranav Amin — Managing Director

So the — so far, they’re not inspecting, but we’ve been talking to them, and that’s why I’m kind of hopeful that within the next two quarters, they may come and inspect, because there are some products which are in shortage. But so far, US FDA hasn’t been coming in and inspecting.

Ayush Mittal — Mittal Analytics — Analyst

Okay. And you plan to keep doing more filings still then?

Pranav Amin — Managing Director

Absolutely. Absolutely, yes.

Ayush Mittal — Mittal Analytics — Analyst

Okay. Sir, there is always one accounting issue that comes in respect to this expansion that given that this approval has been so delayed while our people are operating there. So shouldn’t the company take a more prudent approach and charge off the operational expenses going forward even before we get the full go ahead from US FDA?

R. K. Baheti — Director – Finance & Chief Financial Officer

There are two aspects. One is — and both are related to accounting standard. So an accounting standard says that unless — you need to capitalize the expenses till the commercial use has started. But you are aware that there is another standard, which also requires company to test for impairment. And we and auditors keep testing for impairment, and we still believe that the expenses, which are loaded to the capitalization, would still meet its financial goal. So we don’t need any impairment. So I think — so far, we are good.

Ayush Mittal — Mittal Analytics — Analyst

No, because in the analyst committee, we’re sort of concerned because of this part that as the plant has been put up, people are there, so there’s definitely a lot of expenses and depreciation to things, machinery and everything happening, just because it is out there, and you’re doing filings and all those things. So isn’t it prudent to have some charge should be P&L?

Mitanshu Shah — Head – Finance

Ayush, what we are doing is we are not capitalizing every expense, okay. So all the trials that we do machine trials, we do strictly which can be capitalized are the ones which are getting capitalized. The batches that we take, scale up batches, the exhibit batches, all of those things we do are all getting expenses, R&D expenditure, okay. Now come to the administration portion of the entire plant actually, that is also getting expensed out. So the one which does gets capitalized is the core thing which is useful for building the capacity, building the manufacturing facility, that is only getting capitalized, okay.

Ayush Mittal — Mittal Analytics — Analyst

That’s really good to know, Mitanshu, because if you go to several forums, there is lot of debate on these issues and if there is more clarity, if you can quantify on some numbers or something that we are expensing so much of expense which is towards new initiatives, that will help understand the company better. Just a feedback from my side.

Mitanshu Shah — Head – Finance

Ayush, you can — not getting into the numbers, conceptually, we could talk about it and we can take this offline. I’ll give you greater flavor on this.

Ayush Mittal — Mittal Analytics — Analyst

Okay. The second question I have is perhaps you had mentioned, which other analysts had also asked earlier that our ambition from the US business is to scale up to $400 million, $500 million, and now as we are already at $70 million stable revenue, which is almost $280 million, $300 million number, given that we are doing such a large capex towards the US, shouldn’t our revenue three, four years down the line much higher — the aim should be much higher? If not, why?

R. K. Baheti — Director – Finance & Chief Financial Officer

No, it’s a continuous process. So when…

Pranav Amin — Managing Director

Because you’re building these facilities for a long period of time, right. So I’ll explain. So the injectable facility that we built that’s got opthalmic, it’s got prefilled syringes and vials. And we will keep building that as we go along, we will keep adding more products to it. So the revenue will continue growing, I’m saying in by FY ’24, we’ll get to $400 million, $500 million. It won’t stop there. It will continue growing after that as well. And also there is a timeline, right, because we’re filing, let’s say, about 10 to 12 ANDAs that we expect to file from this new facility F3. From the oncology, these are a little more back-ended in terms of approvals, because they’re all under patents, but most of them all P4s on the oncology facility. So that’s what the combination, and it’s just a start and then we will, of course, keep ramping up from then onwards as well.

Ayush Mittal — Mittal Analytics — Analyst

Yeah. So that’s what I was trying to get back as we are moving up the value chain that we are trying to do more complex things around the injectables, onco, derma. So logically, the pathway should be much higher. The aim should be much higher as we go forward. And we can do more of brownfield capex also if we

Get success.

Pranav Amin — Managing Director

Yeah, I mean, the business has to keep growing. At some point, you have to keep adding new products and more complex funds.

Ayush Mittal — Mittal Analytics — Analyst

Okay. Sir, one more question, with the R&D spend that we do today is quite high when we compare to any of our peers. Going forward, do you think this will continue to grow as a percentage or will this taper down as our revenue scale up from new expansion that we are going to do?

Pranav Amin — Managing Director

We’ve got asked this question in the past as well. I think what will happen is as an absolute amount, it will continue growing. But as a percentage, once these new facilities are commercialized, you’ll start seeing it come down.

Ayush Mittal — Mittal Analytics — Analyst

Okay. And will that come down to 7%, 8%, is that a reasonable assumption?

Pranav Amin — Managing Director

I would say about 9% to 10% at least.

Ayush Mittal — Mittal Analytics — Analyst

Okay. Thank you. All the best.

Operator

Thank you. The next question is from the line of Nimish Mehta from Research Delta Advisors. Please go ahead.

Nimish Mehta — Research Delta Advisors — Analyst

Yeah. Thanks for the question and the opportunity. I just wanted to know you mentioned that we’ve launched Asenapine, can you let us know whether the likely competition, because I guess this is a product which is settled, so is there a difference in launches between other players?

Pranav Amin — Managing Director

So I think in the market from last — I remember, there is about three other people apart from us that’s authorized generic as well as two additional competitors in the market. It’s a decent product, which has got pushed back because of patent, but we’ve launched, we’ve picked up some market share. We’ll get more clarity in the next couple of months how the market settles down.

Nimish Mehta — Research Delta Advisors — Analyst

Okay. And we’ve launched — what I understand is we’ve launched two dosage firms versus three. [Phonetic] So is that — does that still capture majority of the market or how is it?

Pranav Amin — Managing Director

So there is two strengths of the formulation, yes, that’s majority of the market.

Nimish Mehta — Research Delta Advisors — Analyst

Majority of the market. Okay. And any color on the other opportunity that you mentioned, Timolol [Speech Overlap].

Pranav Amin — Managing Director

Timolol is also an interesting opportunity. There is — the Innovata in market, as well as us, and I think Sandoz has a different form, but we have the sole exclusivity on it. And also I believe there are supply shortages in the market. So it’s looking interesting right now, and let’s see in next couple of months how it develops.

Nimish Mehta — Research Delta Advisors — Analyst

So are we the only player right now because of shortages?

Pranav Amin — Managing Director

So I think I’m not sure. I think the Innovata and Sandoz are supplying some quantities as well, maybe not full quantities, but that they are in the market.

Nimish Mehta — Research Delta Advisors — Analyst

Oh! I see. Practically, you are the only channel. Okay. Thank you very much.

Operator

Thank you. The next question is from the line of Prakash from Axis. Please go ahead.

Prakash Agarwal — Axis Capital — Analyst

Yeah. Good evening. Thanks for the opportunity. Sir, my question is on R&D — I’m sorry, I joined a little late, but what is the R&D spend we are planning to do for fiscal ’22 and ’23, any rough ballpark percentage of sales would help?

Pranav Amin — Managing Director

So in terms of absolute amount — somebody asked earlier, but I’ll just repeat it since you weren’t there. We will end up the year below INR650 crores for R&D, because the first quarter was a little slower due to COVID. As regards to next year, I expect R&D to be anywhere between INR700 crores to INR750 crores.

Prakash Agarwal — Axis Capital — Analyst

Okay. And the momentum can continue, given you have 200-plus products in the grade and you want to file 20-25. Do you anticipate after it would taper a bit or it would be at this level?

Pranav Amin — Managing Director

I think it will be at this level itself. Absolute amount will gradually keep increasing because we will also start doing a little more specialty and more complex products. But as a percentage, once the new facilities are commercialized, we’ve seen revenue from them, that will come down.

Prakash Agarwal — Axis Capital — Analyst

Okay. Great. Thanks. And second one is on the EBITDA margin, so, as Mr. Baheti said that the expense side of promotions and all are back to normal pre-COVID levels and you also mentioned that sartan had seen some competition. Despite that, we were able to do 27% kind of — 27%, 28% kind of core margins ex-other income. So just wanted to understand how sustainable are these given the — both these tailwinds in spite of that factoring in, you are able to do 27%, 28%, are these sustainable for next year as well?

R. K. Baheti — Director – Finance & Chief Financial Officer

So, we have not given the next year margin guidance. We have given our overall guidance. I think we should be good for that. I mean you can do a bit of back calculation. The margins are, okay. It looks within reach.

Prakash Agarwal — Axis Capital — Analyst

Yeah. Because if I do that calculation, then we are — I mean, either…

R. K. Baheti — Director – Finance & Chief Financial Officer

So, even if you factor the additional cost, it should come with the new plants [Technical Issues].

Prakash Agarwal — Axis Capital — Analyst

That is a function of post-inspection once your commercialize in the second half?

R. K. Baheti — Director – Finance & Chief Financial Officer

Absolutely. Otherwise, it stays in this range.

Prakash Agarwal — Axis Capital — Analyst

Perfect. Great. Thank you so much, and all the best.

Operator

Thank you. The next question is from the line of Yash Gupta from Angel Broking. Please go ahead.

Yash Gupta — Angel Broking Ltd — Analyst

Good evening, sir. Thank you for the opportunity. My first question is on API. As the Chinese players — Chinese competition are back in the business, so how this pricing will be volatile in next couple of months?

Pranav Amin — Managing Director

So as I’ve said, historically in the past that we don’t really compete as much with the Chinese because we supply only to the regulated markets. And increasingly even pre-COVID was a lot of — we saw a lot of action of people having alternate sources from China in terms of the intermediates and the regulatory approvals and inspections. So having said that, yes, Chinese are back in the market. I think demand will slow little bit compared to what it was, but I don’t expect pricing to be hit as such.

Yash Gupta — Angel Broking Ltd — Analyst

Okay. Second question is on sartan business. Can you give some sales number for the sartan in Q2 FY ’21 — Q3…

Pranav Amin — Managing Director

Sorry. We don’t give product-wise breakup of our sales.

Yash Gupta — Angel Broking Ltd — Analyst

Okay. So just want to understand whether the dip of — or de-growth of 1% in the US business is just because of the sartan or is there any other things are also involved in this?

Pranav Amin — Managing Director

Just sartans.

Yash Gupta — Angel Broking Ltd — Analyst

Okay. Thank you.

Operator

Thank you. The next question is from the line of Abhishek Sharma from Jefferies. Please go ahead.

Abhishek Sharma — Jefferies — Analyst

Thanks for the follow-up. Sir, just on sartans, wanted some color. Since you sell a basket of sartan products in the US, so is there any specific sartan which is getting impacted like olmesartan or valsartan, or is it all across? And secondly, is the pressure more on the price side or the volume side? Thank you.

Pranav Amin — Managing Director

Yeah. So, I’ll explain. Actually, it is very interesting, because last year, over the last eight quarters, what we’ve seen is we saw opportunities across the board in various sartans, which were short term, some were short term, some were long term, some were one-time buys. So all that together caused — is what led to a lot of growth. What we’re seeing right now is there was one sartan particular where we let go of the business on pricing front. We didn’t want to be in that, and that has caused some of the sales. The rest, I think by and large, most of sartans are stable in the single-digit price decline kind of thing, more or less in single-digit price decline.

Abhishek Sharma — Jefferies — Analyst

And the volumes are impacted on all other sartans, just that the pricing is…

Pranav Amin — Managing Director

Yeah, absolutely.

Abhishek Sharma — Jefferies — Analyst

And if you would like to point of which sartan is it that where you decline business and…

Pranav Amin — Managing Director

I don’t want to say, but if you see market shares, you will see which one it is.

Abhishek Sharma — Jefferies — Analyst

Sure. Okay. Thanks.

Operator

Thank you. Ladies and gentlemen, we take the last question from the line of Ranvir Singh from Sunidhi Securities. Please go ahead. Mr. Singh, your line is unmuted. Please go ahead with the question.

Ranvir Singh — Sunidhi Securities — Analyst

Hello?

Operator

Yes, sir. We can hear you.

Ranvir Singh — Sunidhi Securities — Analyst

Yeah. My question is related to Rhizen Pharma. Sir, in Rhizen Pharma, this quarter, we have income which is reflected there in results. So is this a part of milestone payment we are receiving or this is a recurring type of profits we are getting?

R. K. Baheti — Director – Finance & Chief Financial Officer

This is the milestone.

Ranvir Singh — Sunidhi Securities — Analyst

And sir, any like — we had a total deal size of $150 million. So that is any visibility on it, or what kind of milestones we can get in either in ’21 or ’22?

R. K. Baheti — Director – Finance & Chief Financial Officer

So I responded a bit earlier. Deal size always consist of few things. One is the milestone on various reaching, various — obviously, miles — milestones. The second is royalty, which you get on the sales. And the third is the manufacturing rights. So Rhizen deal consists of these three things. Going forward, milestone will be only on the product launch and then subsequently, the royalty and the manufacturing rights will kick in.

Ranvir Singh — Sunidhi Securities — Analyst

Okay. Got it. Okay, sir. Thank you, and all the best.

R. K. Baheti — Director – Finance & Chief Financial Officer

Thank you.

Operator

Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. R. K. Baheti for closing comments.

R. K. Baheti — Director – Finance & Chief Financial Officer

Thanks. Thanks, everyone, for attending the call. As always, it’s very interesting and pleasure talking to all of you. [Technical Issues] and we’ll keep interacting. If any of you have any question, please drop the mail to Ajay or Mitanshu. We’ll be happy to respond to you. And look forward to seeing you again next quarter hopefully in better situation. Thank you all. Good evening. Have a safe day, safe rest of the year.

Operator

[Operator Closing Remarks]