Cipla Ltd. (CIPLA) Q4 FY22 Earnings Concall Transcript

Cipla Ltd. (NSE: CIPLA) Q4 FY22 Earnings Concall dated May. 10, 2022

Corporate Participants:

Naveen Bansal — Head Investor Relations

Umang Vohra — Managing Director And Global Chief Executive Officer

Dinesh Jain — Head – Corporate Finance

Analysts:

Prakash Agarwal — Axis Capital — Analyst

Anubhav Aggarwal — Credit Suisse — Analyst

Neha Manpuria — Bank of America — Analyst

Saion Mukherjee — Nomura Securities — Analyst

Bino Pathiparampil — Incred Capital — Analyst

Sameer Baisiwala — Morgan Stanley — Analyst

Nithya Balasubramanian — Bernstein — Analyst

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Nikhil Upadhyay — SIMPL — Analyst

Sonal Gupta — L&T Mutual Fund — Analyst

Surya Patra — PhillipCapital — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Cipla Limited Quarter four FY ’22 Earnings Conference Call. [Operator Instructions]

I now hand the conference over to Mr. Naveen Bansal from Cipla Limited. Thank you, and over to you, sir.

Naveen Bansal — Head Investor Relations

Thank you, Faizal. Good evening, and a very warm welcome to Cipla’s Quarter four FY ’22 Earning Call. I’m Naveen from the Investor Relations team at Cipla. Let me draw your attention to the fact that on this call our discussion will include certain forward-looking statements, which are predictions, projections, or other estimates about future events. These estimates reflect management’s current expectations of the future performance of the company. Please note that these estimates involves several risks and uncertainties, including the impact of COVID-19, which would cause our actual results to differ materially from what is expressed or implied. Cipla does not undertake any obligation to publicly update any forward-looking statement, whether as a result of new confirmation, future events or otherwise.

With that, I would like to request Umang to take over, please.

Umang Vohra — Managing Director And Global Chief Executive Officer

Thank you, Naveen. Good evening to all of you, and thank you for joining us on the call today. I hope that all of you and your families are safe and well. We appreciate you joining us today for our fourth quarter earnings call for the financial year 2022. I hope you received the investor presentation that we have posted on our website. As you are aware, after a successful six-year stint, Kedar Upadhye has moved on from his role as a Global CFO. I sincerely thank him for his partnership in spearheading some of the most successful reimagination initiatives in finance and strategy during his tenure. I wish him very well for his future and his career ahead.

I would also like to welcome Dinesh Jain, who is on our call, and has been appointed as the Interim Global CFO by the Board. Dinesh has had an illustrious career with Cipla of close to three decades across several domains of finance.

Dinesh Jain — Head – Corporate Finance

Thanks, Umang, for the introduction.

Umang Vohra — Managing Director And Global Chief Executive Officer

Over the last 24 months we have made significant progress across all our strategic priorities while navigating the uncertain trajectory of the pandemic. Our company recorded the highest revenue and achieved several major milestones in our One-India and U.S. business, pivoting the business on an accelerated growth and margin trajectory. In FY ’22, we continued the strong momentum across India, U.S. and other key markets, while continuing investments in portfolio and several other growth-linked initiatives. Coming to the key highlights for the last quarter and full year FY ’22. Overall revenue for the quarter was INR5,260 crores, recording a year-on-your growth of 14%. As you are aware, reverse seasonality kicks in quarter four, which impacts the overall business mix for the quarter.

Despite that, we’ve been able to drive strong double digit revenue growth through focused execution and maintaining a high serviceability across our markets. The revenue growth for the full year was also at 14%. Excluding the COVID portfolio, the core revenue growth was a robust 12% for the quarter and for the full year. For the quarter, our One-India business across branded prescription, trade generics and consumer health recorded a robust 21% growth over the last year, and 15% adjusted for the COVID portfolio. We crossed the $1 billion milestone in our domestic-branded prescription business, driven by the sustained growth across our acute and chronic portfolios. In line with our One-India strategy, we have seen strong execution across portfolio and distribution synergies, helping us drive strong growth across the key businesses, which are now tracking close to the INR10,000 crore mark.

The strong equity of our brands amongst the patients and physicians is reflected in the high growth rates for a flagship brand, which are now a household name. Our focused growth-linked investments, coupled with top line leverage in our India consumer health business has led to EBITDA breakeven FY ’22 for that business. And we wish to grow sustainably from here in FY ’23. Our efforts are now focused on identifying more brands with high consumer potential across India and South Africa to build a strong global wellness franchise. I’m also pleased to see the transformation of the U.S. business, led by sustained ramp up in our respiratory franchise and the peptide injectables, which is improving the run rate and offsetting price erosion being witnessed in parts of our portfolio. Our U.S. core formulation sales toward a multi-quarter higher $160 million, driven by strong traction in respiratory assets, as well as a contribution from the peptide portfolio.

We are gearing up for the upcoming complex launches expected in half year two FY ’23, which would drive both the top line growth as well as the operating profitability of our business. While the uncertainties and challenges related to the pandemic seem more manageable now, geopolitical conflicts and associated supply chain challenges have kept procurement and freight costs at elevated levels. We are managing some of these external headwinds by passing on cost escalations where possible, continued cost optimization and mix management to insulate the core margins to the extent possible. Our operating margin for this quarter [Indecipherable] the impact of certain onetime charges to the extent of INR200 crores, which I shall explain a little later; business mix due to reverse seasonality; elevated procurement and freight costs; as well as higher R&D investments driven by the initiation of the clinical trials of one respiratory asset which is almost INR45 crores higher than the last year.

Adjusted for these onetime charges, the core operating margins remain healthy at 18%, delivering a growth of 20% over last year quarter four with continued expansion in base business profitability. With INR200 crores onetime charges pertain to three basic — three — pertain to two items. The first item is an item related to an inventory charge on account of largely the COVID portfolio lined with us. And that is approximately INR160 crores in the gross margin line and about INR20 crores in the onetime operating expense line. Post this, we continue to carry marginal inventory, which we believe can be liquidated in the coming quarters. And hence, this quarter’s charge covers us for any material unforeseen risks of inventory in the future. We also have a chart with this quarter of about INR20 crores, largely on account of the restructuring we have carried out in our South African business.

Adjusting for these onetime charges, our core operating profitability was INR960 cores and represented at over 18%, which is an expansion of 100 basis points versus last year’s quarter four. Our reported gross margin after material cost stood at 59.2%. As alluded earlier, there is an approximate 300 basis point in impact due to change in material cost line, largely pertaining to demand uncertainties linked to the COVID, which I have explained in terms of the INR160 crore charge we have taken. Total expenses which include employee costs and other expenses stood at INR2,364 crores, an increase by 12% on a sequential basis. Employee cost for the quarter stood at INR892 crores, an increased by 2.3% versus the last quarter. The other expenses which include R&D, regulatory quality manufacturing and sales promotion are at INR1,471 crores, an increase by 19.4% sequential given largely by the higher R&D expense as well as the onetime charges that we explained.

Total R&D for the quarter is at 6.1% or INR322 crores. The absolute trajectory remains intact with assets progressing in clinical trials and other portfolio developmental efforts ongoing. Reported EBITDA for the quarter of INR763 crores, or 14.5% of sales. If we adjust for the INR200 crores charges that we have spoken about, which are onetime, the EBITDA for the quarter then comes in at INR960 crores with margins of 18% plus. Tax charge for the quarter stood at INR71 crores. And the ETR was 15.9%. The lower ETR is attributed to the creation of a debt tax asset for tax losses in our subsidiary, Cipla Pharma and Life Sciences, driven by the transfer and restructuring of certain businesses, which has been approved by the Board in January of the last, of the previous Board meeting. The full year ETR is at 26.7%. Profit after tax is at INR362 crores or 6.9% of sales.

Apart from the onetime charges above EBITDA, our tax for the quarter includes the impact of the following two items: nearly INR70 crores of impairment in certain assets, largely on account of our investment in Avenue. The depreciation on account of the Sri Lankan currency versus the U.S. dollar, where we have booked a ForEx loss of INR42 crores on account of the outstanding receivables from our subsidiary. We are closely monitoring the situation and exploring options to secure the future business. The adjusted PAT, excluding all of the one-off items in the P&L is nearly INR610 crores or 11% of sales. Our reported pretax return on invested capital continues to track at a healthy rate of over 21.5%. As of 31st March ’22, our long-term debt stands at ZAR720 million in South Africa and $7 million in Uganda. We had working capital loans of $49 million and EUR two million. These act as natural hedges towards our receivables.

Driven by the relentless focus on cash generation and the rigor on cost discipline, we continue to be a net cash positive company as of March 22. And we continue to be appropriately hedged for two global currencies as per the policies. Our elevated inventory levels reflect our commitment to ensure availability of medicines and derisk any business interruptions due to the global supply chain disruption. I’ll now come to detailed business updates by market. We will start with India. In India, One-India business grew by 27% for the year and 21% in the quarter. Core portfolio growth, excluding the COVID portfolio was 25% for the year and 15% for the quarter. The branded prescription business delivered sustained momentum across therapies in all our core portfolios. As per IQVIA March ’22, we continue to deliver market-leading growth on the overall portfolio and maintain healthy ranks and market share in key therapies.

We have sustainably invested in our core electronic and acute portfolios to build high-quality formidable branded franchise with power brands which have shown a healthy CAGR of 13% over the FY ’18 to ’22 period on the chronic side of our portfolio. Over the last four years, driven by focused product selection, our share of cold chronic to core branded prescription has expanded by nearly 750 basis points. 23% of our overall branded prescription portfolio is under NLEM, and here too we continue to demonstrate a healthy 6% growth over the last four years. The trade generics business continues to witness strong demand traction for the flagship brands with strong order flow across regions. Our consumer health business has crossed INR500 crores in FY ’22, and some of our flagship brands, which were transitioned have grown bigger and bolder. As alluded earlier, our India consumer health business has turned EBITDA breakeven in FY ’22, and we wish to grow that sustainably from here in FY ’23.

Coming to the U.S. generics. The U.S. core formulation sales were at $160 million for the quarter and full year revenue stood at $594 million. In FY ’22, we have taken significant strides in transforming our portfolio footprint, adding more complex products and sensing our direct-to-market operations. Our respiratory franchise, including albuterol and arfomoterol is ramping up sustainably with 21% growth for the quarter and 28% for the full year. On the pipeline front, our gAdvair file is under active review, and we are hoping for a half year FY ’23 launch. As mentioned earlier, we have initiated clinical trials on the respiratory assets during the current quarter. And filings in the complex generics, including peptide injectables will continue in FY ’23. Coming to our SAGA business, which includes South Africa, Sub-Saharan Africa and CGA, the overall SAGA region grew by 8% on a year-on-year basis in dollar terms. The private business reported a robust 17% growth over the last year for the quarter in currency terms.

The growth continues to be diversified across base business and new launches. We continue to maintain our third position with a market share of 7.5% in the overall market. In markets outside South Africa, the CGA business has witnessed strong order flow in one of our key products, while the Sub-Saharan business maintained scale over the last year based driven by continued order flow. Our international markets includes emerging markets in Europe, and the business navigated very strong geopolitical headwinds to maintain scale at $385 million for the full year and a 4% growth for the quarter. Our DTM franchisees have delivered strong double-digit growth, which helps us offset the emerging market for its volatility and the muted B2B demand in Europe for the quarter. The business continues to track high margins and robust covenants and receivables during the year. Our operations in some of the emerging market geographies are facing currency headwinds, the impact of which is also baked in our Q4 numbers.

We are closely monitoring the situation and exploring options to mitigate any risks that may arise. Turning now to our outlook. We have established a strong threshold for revenue and operating profitability in FY ’22 with core margins trending in the 21% to 22% range. Geopolitical crisis, which is contributing to the current inflationary environment has driven up procurement and trade expenses over the last year’s cost base. We are monitoring these strengths closely and working on plans to mitigate these in the coming quarters. As we mitigate these challenges over the next three to four months, we expect the business trajectory to improve given the upcoming complex launches expected in the second half of this fiscal. Our near-term priorities include: focus on monitoring and monetization of our respiratory filings and launches across geographies to accelerate our global lung leadership journey.

Active advancement of innovative consumer-centric products to accelerate the augmentation of our global consumer wellness franchise across India and South Africa. And continued execution on our branded market portfolio, including peptides, brand building and improvement and ramp up productivity. Sustainable scale-up of our U.S. core formulation sales on the back of high serviceability of respiratory and peptide franchise. Continued focus on cost management, especially amid the inflationary environment we are, which is impacting our procurement costs and others. Accelerate the digital adoption across businesses and functions through focused agenda under the new digital health company Cipla Digital Health. And focus on regulatory compliance across our manufacturing facilities and implement globally benchmarked ESG practices.

I would like to thank you for your attention and will request the moderator to open the session for Q&A.

Questions and Answers:

Umang Vohra — Managing Director And Global Chief Executive Officer

[Operator Instructions] The first question is from the line of Prakash Agarwal from Axis Capital. Please go ahead.

Prakash Agarwal — Axis Capital — Analyst

Yeah, hi, thanks for the opportunity and good evening to all. So my first question is on outlook on the India business. While we are seeing robust growth with COVID without COVID, just some outlook would help given that we are on a good base.

Umang Vohra — Managing Director And Global Chief Executive Officer

I’m sorry, I had a problem following the question. Could you repeat it again, please? Maybe the line was bad.

Prakash Agarwal — Axis Capital — Analyst

Okay. No, so just wanted some outlook on the India business. How is it looking? I mean given the strong growth we have seen with and without COVID, I understand there would be COVID-related therapeutics which had also helped growth. How do we see growth outlook for India business in particular?

Umang Vohra — Managing Director And Global Chief Executive Officer

So we are quite clear, I think we want to see — we are like — we would like to see very high growth, better than market for the non-COVID portfolio. And I think our business momentum is very strong across all the three businesses. And I think it will be for us, big brands becoming bigger. So we remain bullish on India. Of course, we have COVID in our mix in the previous year. But if it is non-COVID, I think we will be showing growth much higher than market.

Prakash Agarwal — Axis Capital — Analyst

Okay. Fair enough. Also I wanted to understand the current goodwill is about INR3,000 crores. I understand tramadol is largely written off. Now currently it largely pertains to Invagen acquisition or there is more subparts to it?

Dinesh Jain — Head – Corporate Finance

Dinesh Jain here. I think it has again a South Africa part also. We’ve done an acquisition of Medpro in 2013. So goodwill is also pertaining to the South Africa business in addition to Invagen.

Prakash Agarwal — Axis Capital — Analyst

Okay. And tramadol is largely done?

Dinesh Jain — Head – Corporate Finance

Yes, tramadol is already done, yes.

Prakash Agarwal — Axis Capital — Analyst

Okay. Perfect. And lastly, on the U.S., just wanted some color on albuterol. I mean, is it seeing flattish performance or you continue to gain market share and dollar value is increasing for us?

Umang Vohra — Managing Director And Global Chief Executive Officer

So the market share, we don’t answer specifically on each individual product, but what I can tell you is that market share has expanded versus the last quarter. I think based on recent data that I saw, we are almost a 22 share.

Prakash Agarwal — Axis Capital — Analyst

Okay, perfect. I have more questions, I’ll join. Thank you.

Operator

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

Anubhav Aggarwal — Credit Suisse — Analyst

Thank you, Umang, one question on the other expenses actually. So you talked about the adjustment. But even after doing that, roughly about INR40 crore adjustment that you talked about, other expenses seems to be higher by INR100 crore in this quarter versus the run rate that you are doing. Any particular reason that you call out — you want to call out for? Because you’re not calling that as an extra, so is that the new base now?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, I don’t think it’s the new base, Anubhav. I think what we are looking at, we’ve only taken the INR200 crore for the calculation of the 18% margin, which is the inventory write-offs. We haven’t even taken the R&D or anything else into that computation. It’s just the inventory charges and the exit charges that we added back. I think the expenses are higher because in quarter 4, particularly our India business had more expenses than usual. And I think this was on account of quarter four for us is a respiratory quarter. And the fact that we were not able to spend it in quarter three on account of COVID-related. So it’s not the new base, it’s not the new base. Having said that, yes, expenses are higher by INR30 crores, INR40 crores even from a normalized basis for us on sales promotion.

Anubhav Aggarwal — Credit Suisse — Analyst

So just to ask the other way, and maybe I missed out in your comments earlier, what’s the expectation for the margin for next year? I mean what kind of range? I heard you talking about 21%, 22%? Or you think even without Advair you can do 22% plus margin for next year?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, so let me put it this way. I think at margin range for the current — what we are guiding towards is upwards of 21%. And from the last call, we were somewhere closer to the 21.5% to 22%. But considering the procurement costs, etc., this time, the high inflation in commodities, we are in the 21% to 22% range.

Anubhav Aggarwal — Credit Suisse — Analyst

And this is with or without Advair. So let’s say if Advair doesn’t happen for whatever reason this year, you can still do 21% plus or lower?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. Yes. I think we can still do that. And also Advair for us is canceled in only in half 2.

Anubhav Aggarwal — Credit Suisse — Analyst

And just last question on Advair. What are the kind of queries you’re getting on this from the FDA? I mean not particular query, but is it more on the device side, more on your trial data side, etc.? Because so far you have given us very high confidence that a very high chance of getting this asset in second half, but just trying to get some more confidence that what are queries you’re getting from the FDA on this?

Umang Vohra — Managing Director And Global Chief Executive Officer

So I think, Anubhav, here the queries that we have received from the FDA are more around the CMCs. I don’t think we’ve received anything on trial. I don’t think we have received anything on — obviously, they have to come and visit the facility because it’s our first DPI product. So I think maybe the file is pending on account of that as well.

Anubhav Aggarwal — Credit Suisse — Analyst

And when was the last time you received any query on Advair?

Umang Vohra — Managing Director And Global Chief Executive Officer

About four months back, six months back.

Anubhav Aggarwal — Credit Suisse — Analyst

Okay. Okay, thanks, I’ll join by the queue.

Operator

Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.

Umang Vohra — Managing Director And Global Chief Executive Officer

Sorry to interrupt you, Mr Manpuria your audio is breaking up.

Neha Manpuria — Bank of America — Analyst

Please check is it clear

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes.

Neha Manpuria — Bank of America — Analyst

Okay, sorry about that. Umang, you mentioned in your opening remarks that U.S. also saw contribution from the peptide asset. Last call you had mentioned sort of a sustained increase in market share over time. Post the launch that you’ve seen over the last two months, has there been any change? Or would you change your market share expectation and the time line for ramp-up on the product?

Umang Vohra — Managing Director And Global Chief Executive Officer

No. I mean, we are not changing any of our expectations from the product. And I think our plans largely remain on track.

Neha Manpuria — Bank of America — Analyst

Okay. So it would still be a gradual increase in market share?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes.

Neha Manpuria — Bank of America — Analyst

Okay. And what could be the fair market share for a product like this in your view?

Umang Vohra — Managing Director And Global Chief Executive Officer

So I think we have an internal estimate. I don’t — I’m not — I’m a little hesitant to give it out right now because the product is fairly competitive. And it is — and matters of this product are also kind of subdued in some way or the other. So I don’t think I’d like to give a commentary on market share, etc., but I’d just like you to know that it is well on track to what we have as an internal goal.

Neha Manpuria — Bank of America — Analyst

Understood. And Umang, on the R&D expense, now that we have one respiratory asset in trial, how should we look at the expense for next year? Would it be in the 6% range that we have reported in the quarter or slightly higher as the expenses probably goes up?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, I think we had — we have also booked in this quarter some amount of clinical trial expenditure on account of the respiratory trials. So I think between 6% to 7% would be where we would end up mostly in R&D.

Neha Manpuria — Bank of America — Analyst

Understood. And last question, if I may. On Abraxane, what is the time line there? Any view on that? And that will also depend on Goa inspection. Have we heard from the FDA on that happening anytime?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, we have not — we don’t have a specific date as yet on the inspection, but you’re aware that inspection has started in the country and quite significantly. So hopefully, we will — we are also hoping to be audited soon.

Neha Manpuria — Bank of America — Analyst

Okay. So Abraxane would therefore could be a second half launch in that case?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. We are hoping it is.

Neha Manpuria — Bank of America — Analyst

Okay, thank you.

Operator

Thank you. The next question is from the line of Saion Mukherjee from Nomura Securities. Please go ahead.

Saion Mukherjee — Nomura Securities — Analyst

Yeah, hi, good evening. Umang, just one question on India. Can you share what’s been the growth in trade generics in this fiscal year, FY ’22 over FY ’21? And any dynamics there? Is it acute, chronic, what kind of products are driving the growth in trade generics?

Umang Vohra — Managing Director And Global Chief Executive Officer

I don’t know if you’re giving segment-specific, but I put it this way, that our highest growth probably was in our consumer business, followed by our branded prescription business in the last year. And I think trade generics was also significantly comfortable in double digits. That’s what I would put it, is higher than market. And the portfolio there is — the portfolio there I think is more acute, more acute, more pain category rather than chronic, and we are building the chronic franchise.

Saion Mukherjee — Nomura Securities — Analyst

Okay. And Umang when you mentioned like COVID and non-COVID, I mean, the growth rates that you mentioned, so you consider only the products which are exclusively used for COVID or you also include the impact of the products which are — which got sold higher during COVID.

Umang Vohra — Managing Director And Global Chief Executive Officer

For us it is largely the COVID. The antibiotics which sold larger is within our base.

Saion Mukherjee — Nomura Securities — Analyst

Okay. And you expect on this non-COVID base to grow next year? Is that.

Umang Vohra — Managing Director And Global Chief Executive Officer

Very correct. We expect to, yes, we expect to grow on the non-COVID base.

Saion Mukherjee — Nomura Securities — Analyst

Okay. And just one last question, if I can. You talked about in your opening remarks about various pressure, inflationary pressures. Is it possible for you to quantify like what level of raw material or freight costs we are currently seeing versus, let’s say, a couple of years back in a normal situation? Is it possible for you to sort of quantify the impact?

Umang Vohra — Managing Director And Global Chief Executive Officer

I don’t know if I can do over four years, Saion, but maybe a good reference point would be from, let’s say, last year, right. What could be the overall impact broadly that one could see this in the category, my guess is about 50 basis points. Could be the freight and the procurement cost impact. And to some extent, you would try and offset this through levers available to a company through pricing, etc.. So overall, I would say about 50 to 70 basis points broadly. Dinesh, is that roughly

Dinesh Jain — Head – Corporate Finance

Yes, Umang, yes

Saion Mukherjee — Nomura Securities — Analyst

And you would say this is probably most prominent in this quarter or even in the third quarter you had. So sequentially, has things materially changed?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, I think they are there because the Ukraine crisis changed — which was already a slightly worsening situation, I think the Ukraine crisis has added to it. So materiality of crude price swings, etc., happened more in quarter four than they did before it.

Saion Mukherjee — Nomura Securities — Analyst

Okay. Okay, thank you. And I’ll jump back

Operator

Thank you. The next question is from the line of Bino Pathiparampil from Incred Capital. Please go ahead.

Bino Pathiparampil — Incred Capital — Analyst

Hi, thanks. Umang, could we get an update on generic Revlimid? Are you still looking at launching in the second half? And would you be in the next wave of launches?

Umang Vohra — Managing Director And Global Chief Executive Officer

Bino, yes, I think we should be in the — look, the first wave has already formed and there could be exclusivities linked to — exclusivity linked to some spends with another player. But yes, amongst the people who will launch in half two, we are hoping to be in that wave.

Bino Pathiparampil — Incred Capital — Analyst

Yes, for the strengths for which already exclusivity is getting over, you will be

Umang Vohra — Managing Director And Global Chief Executive Officer

That is correct. That is correct.

Bino Pathiparampil — Incred Capital — Analyst

Okay. Got it. And just one follow-up on Advair. I believe Teva got an approval recently of late. Have they launched and how has the market changed if they have launched after that?

Umang Vohra — Managing Director And Global Chief Executive Officer

I think we — intelligence we have picked up is that there has been a very limited launch by Teva, but we are aware that we have shipped in the market in limited quantities. I don’t see — we haven’t seen any material change to pricing in the market division.

Bino Pathiparampil — Incred Capital — Analyst

Okay, got it. Thank you very much.

Operator

Thank you. The next question is from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead.

Sameer Baisiwala — Morgan Stanley — Analyst

Thank you very much and good evening everyone. Umang, did you say that the impact because of higher cost of procurement and freight is just 50, 70 basis points in Q4?

Umang Vohra — Managing Director And Global Chief Executive Officer

Broadly on a full year basis, yes, Sameer. And I think on quarter 4, yes, it could be in the same range.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. Just looks a fair bit lower because considering what other companies are saying, and I’m seeing across the sector like including chemicals and other sectors is a few hundred basis points I would have thought the way the inflation is raging.

Umang Vohra — Managing Director And Global Chief Executive Officer

Well, no, one minute, Sameer. I’m only talking about procurement. And see, I’m not talking about overall inflation. In an overall inflation and people costs on some of the promotional materials, all that is over and above this and extra.

Sameer Baisiwala — Morgan Stanley — Analyst

No, no, no. Not including those, just procurement — just raw mat, freight and maybe you can include power, if you were to do that, I thought the impact is much higher, but it’s fine if it’s not so for you.

Dinesh Jain — Head – Corporate Finance

Actually this doesn’t include power, and I think the impact we will see maybe going forward also because a part of it will be in the inventory.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. That’s fine. Umang, the other question is on the price increases. In which market have you been able to pass on the input cost inflation? And roughly to what magnitude?

Umang Vohra — Managing Director And Global Chief Executive Officer

Actually, to some extent, prices are adjusted in the emerging side of the world to the extent we can. And India, I think companies have got the permission to price higher. Some of the other markets should not be impossible.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. And when you say that emerging markets, what’s the magnitude? Is it like a mid-single-digit kind of price increases that you’ve managed the last six months?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, actually, you lose more there, Sameer, because what happens is you try and index pricing based on where the currencies are. And then what happens is that even though you pass on a little bit of the cost, the currencies take it away. So while price adjusting, you’re losing more on the currency and its translation back to you. So you can price up, but your net currency translations bring you back down.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. So net-net, are you neutral or what?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, you try and be neutral in the emerging side of the world, but you don’t get the benefit if you’re asking price increases to margin in those markets.

Sameer Baisiwala — Morgan Stanley — Analyst

Yes. No, that’s fine. Yes, that’s exactly what I’m looking for you, yes. And just on the U.S. side, I mean I’m just wondering how important is Advair launch going to be in the sense that we would be fourth player, if I’m not wrong, maybe more. And I think 50% volumes have already gone generic. So you’re right to win. And do you think this can be a triple-digit sort of an opportunity on a 12-month basis?

Umang Vohra — Managing Director And Global Chief Executive Officer

I don’t know if I would give specific guidance, Sameer, on whether it’s triple digit or high double digit or anything close to that. All I would say is that 50% of the market is still branded. That’s a pretty sizable opportunity to go after for all generic players, not just us. And I think over a period of time, that branded share would reduce, in my view, with more people entering, let’s say.

Sameer Baisiwala — Morgan Stanley — Analyst

But Umang, would you not think that generics have been around for a couple of years, if not a bit more. And this part has been very sticky with the brand and brand has matched a lot of rebates. So it just makes your job that much tougher. And being a fourth or fifth entrant, including also generic, winning market share could be very tough in this market.

Umang Vohra — Managing Director And Global Chief Executive Officer

I don’t disagree with that. I think winning market share is always going to be tough in markets like this, which exhibit a little bit of stickiness. But I also think that there is a — if you were to look at where generics were maybe 1.5 or two years back, they were at a much lower level. So the delta that has happened with generic launches increasing over the last 24 months is also significant in this category. So I think that is one shift. And the second thing is that we have overachieved what we thought we could do with albuterol, which was again a market category where we were launching as probably the third or the fourth variant of albuterol in this market. And while the overall category had three subbrands, we were not clearly the first to market share. But we’ve consistently tried to gain share there. So I think those share conversions happen. It’s a matter of time. And we’re quite bullish about it.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. Great. Umang, with your permission, if I can ask one last one. That’s on Lanreotide. Based on — you’ve been in the market for the last two or three months, where do you see is a more challenging part? Is it contracting with clinics, GPOs? Is it supplies? Is it getting the reimbursement? Like if you can just share your thoughts and experience on Lanreotide, please.

Umang Vohra — Managing Director And Global Chief Executive Officer

I think because this is a B2 product, what happens is that it has to in some way get the approval, the reimbursement listing, etc.. So I don’t think it’s a challenge. I think it’s more — it has a different time line than a generic product. A generic product enters pretty much the same classification, etc., as a branded product, whereas this one has slight differences and tweaks to it. So it takes time for price listing, for reimbursement listing, etc.. And that’s the time period we are in right now.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay, thank you so much.

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. so this is continuation on Lanreotide actually. So last time you mentioned that you need to reach out to a lot of clinics in order to address this market. Just trying to understand, in the last three months, you’ve been in the market, let’s say, what percentage of clinics that you want to address? I’m just trying to understand what’s your progress over there. It’s like 10% of your clinics that you want to address, you reached out already 20%, you reached out already some thing that we can track just to get a sense of how this opportunity is panning out for you guys.

Umang Vohra — Managing Director And Global Chief Executive Officer

Anubhav, I won’t be able to give you specific — we have a list internally of who are the big decile prescribers, etc., etc., which clinics are the ones where this happens. That data is available. So you would attempt your outreach to those clinics. But beyond that, I’m not sure we’ll give the level of detail that you’re seeking on this question. All I would say is that we are on track with we had as our own targets.

Anubhav Aggarwal — Credit Suisse — Analyst

So just to get a sense, let’s say, a good launch, would you say that by end of this year, if you think that double-digit market share is possible for you guys? Or you think that’s a high target.

Umang Vohra — Managing Director And Global Chief Executive Officer

Double-digit means

Anubhav Aggarwal — Credit Suisse — Analyst

— market share.

Umang Vohra — Managing Director And Global Chief Executive Officer

I think it’s possible.

Anubhav Aggarwal — Credit Suisse — Analyst

Okay. And second is on what about the European opportunity for Lanreotide. Have you already filed for Europe? Are you waiting in the queue? Or you’re yet to file?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, I don’t think we would — I think we were only authorized as a partner in this side of the world on the U.S.

Anubhav Aggarwal — Credit Suisse — Analyst

Okay. Sure. Thank you.

Operator

Thank you. The next question is from the line of Nithya Balasubramanian from Bernstein. Please go ahead.

Nithya Balasubramanian — Bernstein — Analyst

Thank you. Umang, just one on EBITDA, and this is a follow-up on the guidance you had given earlier. So this year you ended at around 21%. And next year as well, you’re guiding to the same 21% to 22% range in spite of hopefully generic Advair, generic Abraxane and generic Revlimid [Indecipherable]?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. Nithya, I think what we are guiding to is also a fair amount of cost increases that are going to likely to happen. So both as designed from our side on account of higher R&D as well as on account of the procurement and freight that we spoke about. So I think cumulatively, if you look at it, like-to-like between the two years, I think that cost delta would almost be close to 200 to 250 basis points. So we are trying to offset that through the business.

Nithya Balasubramanian — Bernstein — Analyst

Understood. Second one on Lanreotide, who is the key influencer here? This is the doctor or the clinic or is it the GPO?

Umang Vohra — Managing Director And Global Chief Executive Officer

I think it’s the clinics where the administration happens. I would think the clinics would be the influencers. And within the clinics, you have doctors, you have clinics which are associated with the chains and clinics which are associated with GPO franchise. So I would imagine it’s the — the nodal point in the clinic. And that

Nithya Balasubramanian — Bernstein — Analyst

Understood. So I’m just going back to a question you answered for me in the last earnings call in which you said you might not require any additional commercial infrastructure. I’m just thinking, GPO are obviously a very concentrated bunch, but your clinics should be fairly fragmented. And in spite of that, you do not see any infrastructure, commercial infrastructure requirement?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. I don’t know if we would — I think, look, for a health systems team it is quite common to have 5, 7, 10 people as reps in the market. And I think Cipla has that. So I’m not sure that we require significant commercial infrastructure to market this product.

Nithya Balasubramanian — Bernstein — Analyst

Thank you so much.

Operator

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

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Yeah, thanks for the opportunity. Sir, just on Advair, so as you responded in the call about — it’s been three to four months that there has been no query spending on this product. Have I heard that right?

Umang Vohra — Managing Director And Global Chief Executive Officer

No, I don’t think — look, I think this is the usual process. You received questions from the FDA and then you answer them, then the FDA takes time to review it. So we got a last set of questions about four months back, which is in line with how we’ve seen most products.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

And you’ve responded to all of them as of now?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. That is correct.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

And would the inspection, would be subject to resolution of the all queries and when subsequently you will get the inspection time line or that can happen parallel?

Umang Vohra — Managing Director And Global Chief Executive Officer

I’m sorry; I could not hear you. I lost you because there’s a lot of noise. Could you repeat, please?

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

The inspection time line can be parallel or that will be only after the resolution of all the U.S. FDA queries on this product?

Umang Vohra — Managing Director And Global Chief Executive Officer

It’s supposed to be parallel because the FDA gives a certain date that they expect to complete the inspections also by. But considering the fact that there is a lot of inspection the FDA has to do, maybe we can maybe — I’m assuming that they — that these inspections have now resumed. So we should be hoping to be inspected anytime soon.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Got it. Because at least given that this still remains a limited competition product, so from that angle at least that is the compelling reason to come to inspect the facility.

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

And secondly, on the agreement — sorry.

Umang Vohra — Managing Director And Global Chief Executive Officer

No, we don’t have any specific time line for inspection, if that was your question, which means no specific intimation for when the audit would happen. Let me put it that way.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Got it. Similarly, even Revlimid, would it be — like so any time line for inspection on Revlimid?

Umang Vohra — Managing Director And Global Chief Executive Officer

I’m not sure that for Revlimid we would need an inspection because it’s not a new category of product.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Understood. Understood. And just lastly on gross margins, while even after adjusting for the COVID-related inventory, there is a sequential improvement in gross margin despite having cost pressures or raw material cost pressure. So any specific factor you would like to highlight here?

Umang Vohra — Managing Director And Global Chief Executive Officer

Dinesh?

Dinesh Jain — Head – Corporate Finance

I don’t think so. I think it will be in line, if you can come back. But I don’t think it is to be higher.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Okay. Thank you.

Operator

The next question is from the line of Nikhil from SIMPL. Please go ahead.

Nikhil Upadhyay — SIMPL — Analyst

Hi, good evening. And on the opportunity, my question is a little bit longer. If you look at our presentation, in U.S. we say incremental opportunity to add $300 million to $500 million by FY ’25. Now some of the pipeline products which we understand is like one of the respiratory on which the clinical trial started, there was another partnered respiratory product. But other than — and we have Revlimid and Advair, but other than the existing pipeline, do you think we need to probably add more through inorganic acquisitions so as to get to this number?

Or the existing pipeline based on what is happening at the back end is good enough to give us this $300 million to $500 million? The reason is also because if I look at our balance sheet, the cash generation remains strong and with Advair, Abraxane, Revlimid it’s only going to step up on. So how should we understand the cash generation and achievement of this additional $300 million to $500 million incremental revenue opportunity in U.S.?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, Dinesh. I think he had addressed this to you.

Dinesh Jain — Head – Corporate Finance

Sir, can you — was it regarding like M&A?

Nikhil Upadhyay — SIMPL — Analyst

So I’ll repeat my question.

Dinesh Jain — Head – Corporate Finance

— given — yes, go ahead, please. Please repeat.

Nikhil Upadhyay — SIMPL — Analyst

Yes, I’ll repeat my question. My question is that in our presentation, we say by FY ’25 in U.S. there is incremental opportunity to add $300 million to $500 million. Now if I divide it in two parts, one is based on the existing pipeline of products which are in R&D or in clinical trial, do you think they are sufficient enough to take — to help us grab this $300 million to $500 million opportunity or would you say that probably we would need some acquisitions also in terms of some tie-ups or some acquisitions so as to fill this gap? The reason is that we are generating good-enough cash and we already have good-enough cash on the balance sheet. So how should we understand the usage of cash in terms of meeting these objectives by FY ’25?

Umang Vohra — Managing Director And Global Chief Executive Officer

Let me clarify. Let me clarify. The $300 million to $500 million is largely from work that has already happened through our P&L. So it does not include any acquisitions, etc.. It is largely our organic pipeline that we are doing. So I think that is one. M&A as a focus will continue to be what we have for India. India and some of the other strong markets for us will continue to have M&A focus. And that cash is — it can be borrowed or they come out of internal [Indecipherable].

Nikhil Upadhyay — SIMPL — Analyst

Okay. Okay. So the amount of cash which we have and we are generating, how should we understand the division between like how should — what should be the payout? What should be kept for acquisition because we are already sitting on INR4,000 crores of cash and it’s only going to add up more? So where are we missing in terms of the business requirements for which probably we are keeping so much cash?

Umang Vohra — Managing Director And Global Chief Executive Officer

Actually, it’s the other way around. I’m happy that we are in this situation because two years back, we were a net debt company. So with our strong cash flow generation, today we have reached a point where we have INR4,000 crores of cash. And now if you are able to, we have a balance sheet which we can lend to, to buy some assets in India. So that is our overall objective. The first would be to support our capex program and to buy some assets in India where we can acquire. And the second item there would be that if you are able to do that, then that cash will generate future returns because our internal return in the company is significantly higher than the return of putting this in the bank account.

Nikhil Upadhyay — SIMPL — Analyst

Okay, fine. Sir thanks you.

Operator

The next question is from the line of Sonal Gupta from L&T Mutual Fund. Please go ahead.

Sonal Gupta — L&T Mutual Fund — Analyst

Yeah, hi, good evening, and thanks for taking my question. The first question I had was, could you sort of quantify what was the total contribution of COVID to the India revenues? I mean, like absolute contribution as a percentage.

Umang Vohra — Managing Director And Global Chief Executive Officer

Dinesh or Naveen, can you quantify that?

Naveen Bansal — Head Investor Relations

Thanks, Umang. So Sonal, at this point in time, as we’ve alluded in earlier earnings calls, we’re not quantifying the exact number. But what we have done is we’ve given the full year growth numbers with COVID without COVID. So maybe we would request you to refer to that number.

Sonal Gupta — L&T Mutual Fund — Analyst

No. But the thing is that both numbers have in the base also COVID revenue, right?

Naveen Bansal — Head Investor Relations

That is right, Sonal. The challenge is that as maybe Saion was also asking earlier in the conversation, so what we’ve done is we’ve specifically looked at only the COVID products. But the ancillary has also been kept in the base. So those factors do play out in our overall numbers, and therefore it becomes difficult to then split our numbers with COVID, without COVID from a pure play standpoint. So we request you to just refer to the adjusted numbers which have been provided.

Sonal Gupta — L&T Mutual Fund — Analyst

So I mean, like ballpark, would it be in the 5% to 10% range?

Naveen Bansal — Head Investor Relations

Yes, you can — it would be in that range, yes.

Sonal Gupta — L&T Mutual Fund — Analyst

Okay. Cool. And just the other question, Umang, in your opening comments you mentioned something about Sri Lanka, some INR45 crores. Is there any provision that you’ve taken for that, or? Just trying to clarify on that.

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. That’s an accounting provision which relates to the currency loss in value. And what happens is that our subsidiary owes us money which will now be at a lower currency. So which is why we have taken a charge on that.

Sonal Gupta — L&T Mutual Fund — Analyst

And that is again reflected in other expenses, right?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, it is the charge expected in the ForEx line. Yes. Dinesh, it’s other expenses.

Dinesh Jain — Head – Corporate Finance

It goes to reduce the other income. So for the overall, we have got a gain of exchange, we have exchange gain for the full year. So therefore, this negative also is sitting in other income line.

Umang Vohra — Managing Director And Global Chief Executive Officer

So it’s reduced other income by INR45 crores.

Sonal Gupta — L&T Mutual Fund — Analyst

Yes. Got it. Got it. No, I was just — because the — like previously Anubhav had also asked this question around other expenses being a significant step up on a sequential basis. So you said that around INR30 crores, INR40 crores is coming from India, higher spending, but just trying to understand what else is boosting this so much.

Umang Vohra — Managing Director And Global Chief Executive Officer

So R&D is one, definitely, right. So R&D is higher on a sequential quarter basis because the trials have started. Also, the One-India expenditure is higher on the trajectory. So those are the two big reasons.

Sonal Gupta — L&T Mutual Fund — Analyst

Got it, got it. Sure. Thanks. I speak about the R&D but still if you sell or. Yeah, but. Thanks a lot for taking additions thank you.

Operator

The next question is from the line of Saion Mukherjee from Nomura Securities. Please go ahead.

Saion Mukherjee — Nomura Securities — Analyst

Yeah, thanks for taking my question. So, Umang, on the M&A front, what kind of opportunities you’re seeing in India, particularly given the valuation that we have seen? I mean, are you looking at small bolt-on acquisition? Are you sort of even open to do some large acquisition? How should we think about the opportunity and what Cipla wants to do on the M&A front in India?

Umang Vohra — Managing Director And Global Chief Executive Officer

I think, Saion, it will obviously depend, I think creating an opportunity in India now for an acquisition is now difficult. I think people have — what we realized is it’s only assets that people have made up their mind that they want to sell. Those are the type of assets that are in the play. So for us, I don’t think there is a limit, anything that could be INR200 crores in sale is also attractive to us as a portfolio. Anything that could be INR500 crores in sale is also attractive to us as a portfolio. It has to fulfill a strategic need. And I think we have to see over a period of 10 years, considering the way India is growing, that we would be able to create significant presence with that asset over a seven- to 10-year period. But I think that is what we are looking at.

Saion Mukherjee — Nomura Securities — Analyst

Okay. And a related question, Umang, you were selling Azmarda in India, and it has now been acquired by JB Chemicals. So I mean what are your thoughts because you had already built that brand. So why to sort of let that go before the patent expiry?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, ideally we would not like to let it go has other plans, right? So if you are not the highest bidder, then somebody else would take it. I think that’s what is — in this case, I think both us and another competitor also had a similar issue. And it is a function of how much — what you think the true value is, and we could not, at that point in time justify a value higher.

Saion Mukherjee — Nomura Securities — Analyst

Okay. And just one last question, if I can, on your ANDA pipeline of 69 pending approvals. How many would you sort of consider as complex in this, which has like a revenue potential of $30 million plus?

Umang Vohra — Managing Director And Global Chief Executive Officer

Naveen, are we giving that level of clarity? And could you give some [Indecipherable] for that?

Naveen Bansal — Head Investor Relations

Yes, directionally we can come back to you. But at this point in time we’re not sharing that information. But we can come back to you. We can take this offline.

Saion Mukherjee — Nomura Securities — Analyst

And just one, Naveen, one question. The depreciation seems to be a little higher this quarter. Is there any onetime that you have put in depreciation?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, there is small onetime charges, it is there, some write-offs are there. But it’s small account, yes.

Saion Mukherjee — Nomura Securities — Analyst

Yeah. Okay. Thank you.

Operator

Thank you. Ladies and gentlemen, we will take the last question from the line of Surya Patra from PhillipCapital. Please go ahead.

Surya Patra — PhillipCapital — Analyst

Yeah, thanks for picking up since we did so. Just one question on the One-India initiative. How sustainable is this initiative as it grows

Operator

Sorry to interrupt you, Mr. Patra, the audio is not clear from your line, please check.

Surya Patra — PhillipCapital — Analyst

Yes. Is it fine, sir?

Operator

Yes, sir.

Surya Patra — PhillipCapital — Analyst

Hello?

Operator

Yes, sir. Go ahead.

Umang Vohra — Managing Director And Global Chief Executive Officer

Mr. Patra, please go ahead.

Surya Patra — PhillipCapital — Analyst

Hello?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, we can hear you, Mr. Patra. Please go ahead.

Surya Patra — PhillipCapital — Analyst

Hello?

Naveen Bansal — Head Investor Relations

Yes, hi, Surya, we can hear you, please go ahead, Surya.

Surya Patra — PhillipCapital — Analyst

Hello?

Naveen Bansal — Head Investor Relations

Hi, Surya. We can hear you. Please go ahead. Maybe Faizal, what we can do is in interest of time we can move to the next — if there is any last question in the queue, let’s go ahead.

Operator

We’ll take the last question from the line of Sameer Baisiwala from Morgan Stanley. Please go ahead.

Sameer Baisiwala — Morgan Stanley — Analyst

Thanks so much. I think it was meant for me. So Umang, just did you say that you’ll be filing one peptide injectable in fiscal ’23?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes, we will be, should be, yes.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. Okay. That’s great. And also for the respiratory filings, can you just quickly summarize how many are in clinicals and how many have been filed?

Umang Vohra — Managing Director And Global Chief Executive Officer

Filed and not on market?

Sameer Baisiwala — Morgan Stanley — Analyst

Yes.

Umang Vohra — Managing Director And Global Chief Executive Officer

I’m assuming your question is to the U.S.

Sameer Baisiwala — Morgan Stanley — Analyst

That’s right.

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. So filed and not in market are two. To be filed in clinic is one. And hopefully, there’ll be another in clinic later this year.

Sameer Baisiwala — Morgan Stanley — Analyst

Okay. Okay. Great. And one final, Umang, from my side. You mentioned about the India business. You mentioned 4-year CAGR for chronic 13% and acute 5%. So is it possible for you to just broadly tell us what’s the volume component and what’s the price increase component? And do you think this is what we should expect going forward as well?

Umang Vohra — Managing Director And Global Chief Executive Officer

Yes. I think we can break that down Sameer and send it to you. All I would say is in chronic, I would think a large portion would also be volume because this is a segment that Cipla was never historically strong in at all, whether it’s cardio or its diabetes. And we’ve built this over the last four years. We have always been strong in respiratory and some acute therapies, but never so much in chronic. So a lot of the work has happened in dermatology, in cardiovascular and diabetes, and we can send you that data.

Naveen Bansal — Head Investor Relations

And Sameer, just incrementally, the numbers that you see on that slide are basically coming in from the IQVIA data. So maybe while we can also stay in touch, you can also refer to that to split the growth into volume, price

Sameer Baisiwala — Morgan Stanley — Analyst

Okay, great, thank you so much. Thank you,

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Mr. Naveen Bansal for closing comments.

Naveen Bansal — Head Investor Relations

Thank you, Faizal. Thank you so much, everyone, for joining us on our earnings call today. In case you have any follow-on questions, please feel free to reach out to us. We wish you a very good evening ahead. Please take care.

Operator

[Operator Closing Remarks]