Dr. Reddy’s Laboratories (NSE: DRREDDY) Q3 2025 Earnings Call dated Jan. 23, 2025
Corporate Participants:
Richa Periwal — Head, Investor Relations & Corporate Analytics
M V Narasimham — Chief Financial Officer
Erez Israeli — Chief Executive Officer
Analysts:
Kunal Dhamesha — Analyst
Neha Manpuria — Analyst
Amey Chalke — Analyst
Bino Pathiparampil — Analyst
Surya Narayan Patra — Analyst
Damayanti Kerai — Analyst
Tushar Manudhane — Analyst
Saion Mukherjee — Analyst
Foram Parekh — Analyst
Anubhav Agarwal — Analyst
Vishal Manchanda — Analyst
Shashank Krishnakumar — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Quarter Three FY25 Earnings Conference Call of Dr. Reddy’s Laboratories Limited. [Operator Instructions]
I now hand the conference over to Ms. Richa Periwal. Thank you, and over to you, ma’am.
Richa Periwal — Head, Investor Relations & Corporate Analytics
Thank you. A very good morning and good evening to all of you, and thank you for joining us today for the Dr. Reddy’s Q3 FY25 earnings conference call. We have with us the leadership team of Dr. Reddy’s comprising Mr. Erez Israeli, our CEO; Mr. M V Narasimham, our CFO, and the Investor Relations team.
Earlier today, we have released our results and the same is also posted on our website. We will kick off today’s call with MVN taking us through the financial highlights of the quarter. This will be followed by Erez sharing his thoughts on business performance, post which we’ll open the forum for Q&A. Please note that today’s call is a copyrighted material of Dr. Dr. Reddy’s and cannot be rebroadcasted or attributed in press or media outlet without the company’s expressed written consent.
This call is being recorded and the playback and the transcript shall be made available on our website soon. All the discussions and analysis of this call will be based on the IFRS consolidated financial statements. The discussion today contains certain non-GAAP financial measures. For a reconciliation of GAAP to non-GAAP measures, please refer to our press release.
Before I proceed with the call, I’d like to remind everyone that the Safe Harbor contained in today’s press release also pertains to this conference call.
Now, I hand over the call to MVN.
M V Narasimham — Chief Financial Officer
Thank you, Richa. A warm welcome to all. We continued our growth trajectory and delivered consistent results with a double-digit top line growth and steady margins, while continuing to invest in our R&D, innovation and commercial capabilities. This is the first quarter of consolidation of the acquired nicotine replacement therapy business and this resulted in delivering yet again highest ever quarterly revenues and EBITDA in Q3 FY25 for the company.
Let’s look at the financial performance of the quarter. For this section, all amounts have been translated into US dollar at a convenient translation rate of INR85.55, which is the rate as of December 31st 2024. Consolidated revenue for the quarter stood at INR8,359 crores, which is $977 million, a growth of 16% on year-over-year and 4% Q-o-Q. This includes the revenues from the acquired NRT business of INR6,605 crores. Excluding NRT revenues, the underlying growth is at 7.5% on year-over-year basis and a decline of 3% on Q-o-Q.
Consolidated gross profit margin stood at approximately 59% for the quarter, an increase of 19 basis points over the same quarter of the previous year and a decrease of 91 basis points sequentially. The year-over-year increase was primarily on account of improvement in product mix and manufacturing overhead leverage, partially offset by price erosion.
Gross margin for global generics and PSAI were at 61.3% and 28.6% respectively. The SG&A spend for the quarter was INR2,412 crores, which is $282 million, an increase of 19% year-over-year and 5% on Q-o-Q basis. The year-over-year increase was primarily on account of recently acquired NRT business, investment in the new business initiatives, building the capabilities and higher logistics costs due to increased freight rates.
The SG&A spend as a percentage to the sales was 28.9% and was higher by 82 basis points on year-over-year and 15 basis points Q-on-Q basis. The R&D spend for the quarter was INR666 crores, which is $78 million, an increase of 20% on year-over-year and decrease of 8% on QoQ. The continued investment in R&D was primarily towards development of complex generics and biosimilars. The R&D spend was at 8% of the sales and was higher by 25 basis-points on year-over-year and lower by 110 basis points on QoQ basis. We expect the investment to be in the range of 8.5% to 9% for the full fiscal.
The EBITDA for the quarter, including other income was INR2,298 crores, which is $269 million, an increase of 9% on a year-over-year basis and flat QoQ. The EBITDA margin stood at 27.5% and was lower by 176 basis points on year-over-year and 95 basis points QoQ basis. The net finance expense for the quarter is around INR2 crores as compared to net income of INR96 crores for the same quarter last year, primarily on account of unfavorable forex impact and lower interest income post NRT acquisition consideration payout.
As a result, profit before tax for the quarter stood at INR1,874 crores, that is $219 million. PBT as a percentage of revenues was at 22.4%. This includes profit before tax from the acquired NRT business of INR124 crores. Effective tax rate for the quarter was at 25.1% versus 24.5% in the base quarter. We expect our normalized ETR to be around 25%.
Profit after tax attributable to the equity holders of the parent for the quarter stood at INR1,413 crores, which is INR165 million, a growth of 2% on YoY and 13% QoQ. This is at 17% of revenue. Reported EPS is INR16.94. The EPS has been derived on the increased number of shares post the stock split and after non-controlling interest.
Operating working capital as of 31st December 2024 was INR12,782 crores, which is $1.49 billion, an increase of INR716 crores, which is $84 million over 30th September 2024. Capex cash outflow for the quarter stood at INR709 crores, which is $83 million. Negative cash flows for this quarter was INR209 crores, which is $24 million. We have a net cash surplus of INR1,603 crores, which is $187 million as of December 31st, 2024.
Foreign currency cash flow hedges in the form of derivatives are as follows. US dollar is hedged through structured derivatives $285 million for the next quarter at 83.9 and 681 million maturing over the next financial year with minimum production rate of INR85.7 to the dollar, which also allows participation when USD strengthens. RUB1,903 million with a minimum production rate of INR0.9 to the ruble maturing in the next three months.
With this, I now request Erez to take us through the key business highlights.
Erez Israeli — Chief Executive Officer
Thank you, MVN, and very good morning and good evening to everyone. We have delivered another steady quarter with a double-digit top line growth and EBITDA margins of 27.5% and a return on capital employed of 28%. We remain committed to our stated strategy of strengthening our core generics business, while also investing in our future growth drivers, primarily in three areas, consumer healthcare, access to innovative products and biosimilars. We are focused on driving productivity in research and development, scaling our manufacturing and commercial capabilities and leveraging our market access to capture opportunities while operating efficiently.
Following the completion of acquisition of the nicotine replacement therapy business in September, we are now focusing on a seamless integration, which will happen in phased manner starting April 2025. During the transition period, the seller Haleon will provide distribution and related services across all markets. And Q3 FY25 is the first quarter of consolidation of NRT business financials.
Let me take you through the other key highlights for the quarter. One, double-digit growth in revenue at 16% with EBITDA margins at 27.5%; ROC at 28%, $188 million of net cash surplus. We launched toripalimab, the first and only immuno-oncology drug approved for the treatment of nasopharyngeal carcinoma and elobixibat, a first-in-class drug to treat chronic constipation under the brand name Bixibat in India. These launches are in line with our strategy to address issue of availability and accessibility of affordable innovation in India through in-house and collaborative efforts.
We also made progress on our biosimilar journey. We secured the marketing authorization for rituximab in the UK and denosumab has been filed in both US and Europe. On the regulatory front, in November, the USFDA completed GMP inspection at our facility CTO 2 in Bollaram, Hyderabad, and issued a Form 483 with seven observation. We have responded to the observation. We did within the stipulated timelines.
We have integrated sustainability in our business operation and continue to recognize for our focus efforts in ESG. We have placed five globally among pharma companies assessed in the 2024 S&P Global CSA with ESG score of 79 out of 100. We continue to be members of the DJSI World Index for the second year in a row in a row, along with the DJSI Emerging Markets Index for the ninth year in a row. MSCI ESG rating has been upgraded to A in December. We continue to feature among NIFTY 100 ESG sector leaders. Further, Science Magazine named Dr. Reddy’s in their top 20 global pharma and biotech employers for the third consecutive year.
Now let me take you through the key business highlights for the quarter. Please note that all reference to these numbers in these sections are in respective local currencies. Our North America generics business recorded revenue of $401 million for the quarter, which was flat on a year-to-year basis with sequential decline of 10%. The benefit from volume growth and new launches was offset by price erosion resulting in the year-on-year growth. Sequential decline was on account of lower sales from few products, including lenalidomide. We launched four new products during the quarter and we closed the full year within 15 to 20 launches.
Our European generic business segment, including — includes NRT financials from the quarter. Europe recorded revenues of $134 million this quarter, a strong year-over-year growth of 142% and sequential growth of 114%. Excluding the NRT, the segment recorded a year-on-year growth of 22% and a Q-on-Q growth of 5%. We gained from the growth in our existing products and new product launches, which more than offset price erosion. During the quarter, we launched a total of nine products across markets.
Our emerging market business recorded revenue of INR1,436 crores in the quarter with year-on-year growth of 12% and decline of 1% on a sequential basis. Year-on-year growth was on account of new products, launches in Russia, and the rest of the world markets and was further aided by higher base business volumes. We launched 20 new products during the quarter across various countries of the emerging markets. Within this segment, the Russia business grew by 20% year-on-year basis in constant currency.
India business recorded revenue of INR1,346 crores in Q3 with a double-digit year-on-year growth of 40% and sequential decline of 4%. We benefited from the growth in our board portfolio, including in-licensed vaccine portfolio and new launches. We launched six brands this quarter. As per IQVIA, our IPM rank continued to be at 10 and we are outperforming the IPM with a MQT growth of 10.3%, while IPM growth was at 7.4%. However, excluding the in-licensed vaccines portfolio, growth was at 5%. While many of our brands outperformed their respective categories, selective brands in cardiac, in gastro, in specialty intestinal therapy areas witnessed a slower pace of growth. We are poised to return to the market-leading growth in these therapy areas in the coming quarters.
Our PSAI business recorded revenue of $97 million in Q3 of FY25, a year-over-year growth of 3% and sequential decline of 3%. The year-over-year growth was primarily on account of new product launches and improved volumes. We filed 23 Drug Master Files globally this quarter.
We invested 8% of our revenues to strengthen our R&D capabilities. Our R&D investment this quarter stood at INR666 crores and we are increasingly focusing on developing our complex generic pipelines, including promising GLP1 assets and biosimilars. We are also building commercial [indecipherable] capacities, enhancing our manufacturing and commercial capabilities and investing in new technologies to capitalize on growth opportunities. We have made 53 global generic filings during Q3 of FY25.
We remain committed to sustainability, quality and operational excellence. We continue to invest in the three areas of strategic focus, which are consumer healthcare, innovative products, and biosimilars to build a solid foundation for future growth. Our strategic investment in R&D, recent acquisition and capex putting us in a position of strength in this journey. We are excited about the opportunities ahead and remains steadfast to drive sustainable growth.
With this, I would like to open the floor for questions and answers.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha
Hi, good evening and thank you for the opportunity. The first one on the India business. So we have grown at around 16% year-on-year. But if we just look at the core business, how that performance has shaped up and you have also mentioned that there is some weakness in cardiac and gastrointestinal segment, lower volume pickup. So is it transitory in nature or is there something more to be — take into account there?
Erez Israeli
Yeah. So indeed, if you check out, so the — all the other categories outperformed the market and actually all of them were double-digit beside these two segments. As for both of them, there are solutions for — in terms of, let’s call it, the actual execution of the way we do sales and marketing as well as the product performance per se. Specifically to gastro, I have no doubt that it will come relatively soon. Cardiovascular may take additional quarter as we need some more adjustments to do. In both cases, we are investing more in both businesses in order to grow them faster. So we are very much focused on that. Other than that, the business in India did pretty well.
Kunal Dhamesha
Sure, sure. Erez, one more question on our biosimilar foray now. We have already filed rituximab, now with denosumab also filed, but with partner. So if you could throw some light on the economics here for denosumab, and in terms of, let’s say, eventual launch, can we assume that this would be the second product after rituximab and then followed by another one, abatacept, is the way we should look at?
Erez Israeli
Yes. That’s how we should look at it. So denosumab is actually supposed to facilitate our abatacept launch because the two products are going for the same segments and give or take to the same type of doctors. So it was also the strategic rationale of why to license the product. We wanted to create a team and the capability in the marketplace to be able to then gain more or faster market share on abatacept. So this was also the rationale.
In terms of timelines, normally in the US, it takes about 12 months, give or take, for approval. So as we submitted it in December, give or take, this is where we should expect a launch. In Europe, it’s a bit slower. We submitted in October. So likely it normally takes around 14, 15 months to get all the approvals. So that’s also where the time that we are supposed to launch denosumab. And yes, it will be after rituximab in Europe, yes.
Kunal Dhamesha
Sure, sure. And with your permission, last one for MVN. The INR1,240 million of NRT PBT that we have suggested, would it include any allocation of interest expense or just the amortization?
M V Narasimham
Only amortization. No interest.
Kunal Dhamesha
Okay. Okay. Thank you and all the best.
M V Narasimham
Thank you.
Operator
Thank you. The next question comes from Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria
Yeah. Thanks for taking my questions. Erez, on the US business, you mentioned that a few products have seen moderation quarter-on-quarter, including revlimid. While revlimid, we understand there is lumpiness, but what is the reason for the decline in the base business, excluding revlimid? Because have we lost market share? Is the pricing erosion higher than we were expecting? Any color there?
Erez Israeli
So nothing major happened. The product that were declined were the famous product that we got like the competition like the [indecipherable] the stuff that the competition entered some of them nine months ago, some of them six months ago. So there was a certain continuation. This happened also before. Nothing major happened in per se. Against that, most of the growth that compensate for it was primarily market share. It’s less about new products and more about market share.
Neha Manpuria
So just to get this correctly, we have lost market share in some of these products and hence the decline? So that’s the — this is the new base we need to work with? Is that understanding right?
Erez Israeli
It’s a combination of market share and prices.
Neha Manpuria
Understood. Okay. Got it. And my second question is on the consumer healthcare business, on the NRT transaction. Given that Haleon is still running the business for us till the time the integration happens, how should we look at investments in the business and the ramp-up in the NRT pool? Would that happen only after the integration is done? Is that fair to assume that in the next 12 months, the focus would be in actually integrating and then probably the business would go into investment stage?
Erez Israeli
No, we do have an agreement with them on investment and increase of even investment itself in areas as in the — this is a business that actually is now gaining momentum. It is growing actually for the second year in a row, and we want to continue that momentum. So there is a certain agreement of gross to net, how much marketing expenses we should put at the time. Once of course the market will come to us, we don’t need to pay that fee anymore to Haleon. So it will save that amount of money that we are paying a certain amount of money for the services they are giving us as we speak. And it will allow us, of course, to accelerate this process.
In terms of priority, absolute integration is a priority, but also to grow the business. So to grow the business, to build the capabilities to — there is a lot of innovation that was not done there and to introduce it. The real growth will come post this integration, but it’s — but we are going to invest more also in these 12 to 14 months of — that we are going to get — the time that we will get those markets. We are not waiting for that.
Neha Manpuria
Okay. And that investment will flow through our P&L in the SG&A cost. That’s a fair assumption.
M V Narasimham
Yes.
Erez Israeli
Yeah. Absolutely, absolutely.
Neha Manpuria
Okay. Thank you so much.
Operator
Thank you. The next question comes from the line of Amey Chalke from JM Financial. Please go ahead.
Amey Chalke
Yeah. Thank you so much for taking my questions and congrats to the management on good set of numbers. So first question I have is on semaglutide. I — we understand that Reddy is one of the players who have filed for the Canada market where the patent expiry is expected somewhere early next year. At present, there are two to three players for this market. By the time we would be launching this product in this market, you expect the players to increase or what would be the competitive scenario at that point of time?
Also, if you can also explain Canada market, how similar is it with respect to US when it comes to price realization, market share gains etc. How easy or difficult it is to gain market share in Canada, particularly? Because we have seen in case of revlimid there were lot of — there were a few players who had filed for this product even for Canada, but ramp-up had not been very encouraging. So if you can give some color on the Canada market with respect to semaglutide opportunity.
Erez Israeli
Sure. I’ll do my best. First if I recall correctly, in January ’26 is where the patent expiration will happen for generic, and this is the product that the generic version of it is expected to be launched, if we will get approval. We — I believe we are positioned well to get approval for that period of time and naturally it is a very important market for us. Normally between the time that you submit the product to the Canadian authorities until you get approval is 12 to 14 months. So people will have to — if they want to be in January of ’26, they have to already file it to be there on time. Anyone that files after the date, likely to get approval only after that. So what are going to see probably sequence in which people will get approval and we hope to be the first one in the pack, and of course, but for that, we need to get the approval.
Second, it’s a product that although possible, but it’s not easy to make the API, and as you know, you need to make the autoinjector of the pen and it requires a capacity to align for that. The way you take market share in Canada is in that respect similar to what you are familiar in the United States or in the UK in which you are collaborating with the main distributors and the retailers to gain market share. They normally share this product. In this respect, you should look at it like it’s a retail product and that’s probably what you do.
The reimbursement mechanism in Canada is different. Every product that is coming is taking by law the reimbursement price down. So in terms of the pricing versus the reimbursement pricing, naturally, the more competition, the price will go down accordingly. This is very normal in Canada. So potentially it could be that in the earlier time, it will be more of a limited competition. And of course, it will intensify over-time as more people will join and the reimbursement price will go down, but to put a scenarios, time will tell who will get approval, we will not get approval, at least we believe that we have good chances, let’s see.
Amey Chalke
Sure. And one more question related to semaglutide. Considering there is too much demand, which is expected to be there when the generic player enter this market all over the world, I believe there is still — from the supply point of view, there would be a constraint in terms of both API as well as the pain assembly lines. So how are we going to ensure that our execution could be better there? Are we blocking some of this capacity both in the pain as well as API side? How are we going to keep that thing in check?
Erez Israeli
We are working on this project including capacity for the last 10 years not that 10 years ago we knew that the product will be that big this is obviously information that came over-time. But if you see the level of R&D and CapEx, you can assume that the big portion of it went for this activity. By the way, it’s not just the API. It’s the API for both the synthetic as well as the semi-synthetic. It’s about both internal as well as external options for manufacturing. It is about having access to the relevant devices.
We are working it for quite some time and indeed not everybody will have to be able to cater with this magnitude. I agree with it. But I’m assuming that the product is so attractive that eventually it will be a very competitive marketplace, but at least in the initial days, people will have to build a certain level of capacity and market access to make things — to make it happen. I just want to make sure that the full transparency is not just about specific markets like Canada. There are about 80 markets that can be opened for 2026 because the product is in demand in all the markets in the world, but certain markets in which the innovative products does not even come to it, we believe that it’s also a nice opportunity in its own merit.
Amey Chalke
Sure. Just last question on the SG&A spend. I believe because we have revlimid opportunity at present, which is giving us good cushion to spend more, there is a good amount of discretionary spend which is happening at present. So is it possible for the management to give some visibility on how much spend is discretionary at present, which could reduce post revlimid or you think because the semaglutide kind of opportunities are there, it might continue?
Erez Israeli
So let me take it. The — we — I mentioned it in the past, we feel very, very comfortable with 25% EBITDA, which allow us to — and we mentioned this in the past, allow us to give a great return on the shareholders as well as allow us to invest in that in the system. Absolutely we took an advantage of the fact that we had a few years of [indecipherable] and we absolutely took it to invest more. With this money we used to buy the key business, with this money, we put more capex exceed. We have much more capex. The investment that we mentioned before was semaglutide, which was part of it and — in the case that — which I believe will be that the activities that we mentioned of going the base as well as the productivity as well as the big products like semaglutide as well as BP will allow us to grow, which I believe that this is what will happen. We will continue to invest also further into the future because we’re also building growth engines not just for the immediate future like ’26 and ’27, but also for ’28, for ’29, we are planning to be in the neighborhood for quite some time. If we will not have this money, absolutely we have the ability because a lot of our expenses are discretionary, especially SG&A and R&D. We will absolutely adjust our expenses closely and so that level of the philosophy that we want to stay profitable is important to us.
Amey Chalke
Sure. Thank you so much. I will join back the queue.
Operator
Thank you. The next question comes from the line of Bino Pathiparampil from Elara Capital. Please go ahead.
Bino Pathiparampil
Hi, good evening. A couple of questions from my side. Could you give some color on Iron sucrose filing that you have done? Do you expect approval in time here soon?
Erez Israeli
So we filed it actually a long time ago. We recently got a CR on the API side, which we are planning to address. So we thought that it’s a good opportunity to launch it in these coming months. This right now will be delayed because we need to answer this. Yeah.
Bino Pathiparampil
Got it. Second on (abatacept, some of your competitors have tried in the past, but it seems it’s a difficult product and some of them seem to have given up. What gives you the confidence that your product can see through the FDA approval process?
Erez Israeli
We had a very successful Phase 1. And so far, normally when you pass Phase 1, you have a good chance to, of course, be very successful in Phase 3. Also so far, the rollout and the fact that we even finished the rollout of the patients is very encouraging. We did it in actually very, very good timing. We have a very — we believe in our clinica and I hope that we will be able to submit sometime next year.
Bino Pathiparampil
Got it. And last one question, if I can, on lenalidomide. Going into FY26, in 4Q that is in Jan ’26, the kind of settlement with volume restrictions are coming to an end, so how should we look at lenalidomide? Will it continue roughly quarterly estimate smoothly till 3Q of next year and then drop off or do you think it will get front-ended in the next year?
Erez Israeli
I don’t know exactly how the quarters will be because this is a decision normally by the customers. It’s not that we are planning this way. We are serving the customer in the way they want to be served. But yeah, we — likely that we will not sell in this level of pricing, let’s say post somewhere September, maybe October of calendar ’25. Now what exactly — how it will work I don’t know, but post that period of time unlikely that it will come because of the normal, what we call shelf adjustments. So give or take until that period of time, you should see similar behavior of the product as you saw in the last couple of years.
Bino Pathiparampil
Got it. Thank you. I’ll turn back in the queue.
Operator
Thank you. [Operator Instructions] The next question comes from Surya Narayan Patra from PhillipCapital. Please go ahead.
Surya Narayan Patra
Thanks for the opportunity, sir. First question is on the NRT portfolio acquisition. See, while we have indicated that the SG&A cost this quarter had seen a kind of uptick post this acquisition and integration and given even after that, the PBT percentage of NRT portfolio around 21% looks interesting. So how to think about the profitability of this acquired asset going ahead? Because current quarter is anyway is seeing the support of Haleon and simultaneously we have also thinking about spending more on building the portfolio and franchise. So while it looks interesting in terms of the profitability compared to our base business, so going ahead, how should we think in terms of the synergy benefit at the margin and profitability level for this acquired asset?
Erez Israeli
It should continue to be profitable. So we are absolutely going to finance the additional investment with growth and we are planning to keep it profitable. There is no plan to — now to go for, let’s say, two, three years of investment and then take it from there. The idea is to indeed spend more, but to keep it in the — for sure, the 20 plus digits on EBITDA should continue on this asset.
Surya Narayan Patra
Okay. My second point is on the Nestle JV and the domestic business, put together I’m asking this question. So sir, how long that we will take for the Nestle JV to really contribute meaningfully to the growth of the domestic business? That is one. And the second part of the domestic business question is, while we do anticipate this is the business segment it should be growing the fastest among all other business segment for Dr. Reddy’s over the next few year, but right now it is not even matching the industry growth momentum. So how should one think and what will start contributing incrementally to the anticipated so that it can reach the anticipated growth rate?
Erez Israeli
So the question on Nestle, this will absolutely want to take time. The reason for that is that we need to bring the products to India and we need to invest behind brands that are not today recognized in India. So it’s not that you’re investing behind something that is already known. And as I’m sure you know well, it takes time to build brands that both Nestle and us are very much aligned to that. By the way, so far the business is going even ahead of our expectations. So I’m very happy about it. But in terms of significant contribution to the growth, it will take a couple of years.
As for your comment about the India business, I mentioned it with previous questions. Actually the business is doing well. We do have two segments that underperformed. We mentioned it also, the GI and the cardiovascular. We have a plan to bring on track, but the business is actually doing well. What we believe really will drive the business, I’m saying it for quite some time, actually for quite some years, we believe very much in introducing innovation to India rather than the generics. I strongly believe I’m emphasizing also today the generics growth will decline over time because of various reasons that we discussed in the past. And I believe that the right products to bring to India are technologies that are addressing unmet need, that will tackle protection and that’s what we are building on. I’m very, very — I believe in what we phrased and very committed to what we discussed in the past. We are going to grow and [indecipherable]
Surya Narayan Patra
Okay. So the momentum accelerated growth will be seen in the domestic side starting next year onwards, sir, or it is ’27 onwards?
Erez Israeli
No, we are going also today. We are doing it both organic and inorganic. We are growing in 15%, 16%. For me, growth is everything and we are growing faster than the market. The market is growing 7% and we are going to grow 15%. This will continue. This will continue. What we do not take into account at this stage because of valuation is of course major acquisition that we discussed in the past. Right now, this — at least the multiples of India were too high for us and we are trying to do it organically. This is why it’s taking more time. But we are very bullish and India is very, very important focus market for us.
Surya Narayan Patra
Okay. Even the vaccine portfolio should see expansion, sir?
Operator
Mr. Patra, may we request you return to the queue for questions?
Surya Narayan Patra
Yeah, yeah. Okay. Thank you.
Operator
[Operator Instructions] The next question comes from Damayanti Kerai from HSBC. Please go ahead.
Damayanti Kerai
Hi, thank you for the opportunity. Erez, my question is again on semaglutide. So what kind of addressable market you are looking at outside of the US? You mentioned a lot of markets will open up starting 2026. And with the kind of capabilities which you have built on API or on the device front, what kind of market-share you are looking for yourself?
Erez Israeli
So the markets will open in a certain sequence in ’26. The most notable markets will be Canada, India, Brazil. The key markets that we are discussing are primarily markets in which there was no patent protections. These are markets in — primarily emerging markets like in Asia, Africa, Latin America. Much smaller markets in nature, but accumulate wise and demand wise, it can add a very nice to that. We are working both B2B and B2C. We have global partners in which they are licensing our products that have great presence in those markets. In some of them, we are going to do it by ourselves. So it’s a combination of selling APIs, selling finished loads and of course marketing as a product, and we are going for all the products, Ozempic, Wegovy and the oral product. So overall it’s something that will come in multi-markets. This specific product, as you know, US and Europe will come later into the game.
Damayanti Kerai
Okay. But any size indication which you are targeting, say, for the bigger addressable market?
Erez Israeli
It’s hard to tell market share because we don’t know yet who is going to compete in which one of these markets, etc., but naturally in all the markets that we will be first, we have a high expectation of performance obviously from the market. But any number that I will indicate to you will be wrong. Time will tell. It’s not the [indecipherable]. We really don’t know.
Damayanti Kerai
Okay. Thank you.
Operator
Thank you. The next question comes from Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane
Yeah. Thanks for the opportunity. Sir, just on abatacept, the timeline to file the product, I missed in the comments, if you could repeat.
Erez Israeli
Timeline is — sorry.
Tushar Manudhane
Abatacept, biosimilar.
Erez Israeli
So if everything will go right, we should submit it in December of ’25.
Tushar Manudhane
December of this year?
Erez Israeli
December 2025. Yeah.
Tushar Manudhane
Got it. So — and then assuming 12 to 15 months timeline to the regulatory review cycle, right?
Erez Israeli
Like the Muslims say, inshallah, we hope for the best. Normally it’s about 12 months. So let’s — but let’s say for patent point of view, January of ’27 will be a great timeline if we can achieve it.
Tushar Manudhane
Understood. And will this product be manufactured completely in-house as in drug product as well as drug substance?
Erez Israeli
Correct. We will make both DS as well as DP.
Tushar Manudhane
Sorry. I didn’t get your comment. We’ll manufacture?
Erez Israeli
You are correct. We will make both drug substance as well as drug product.
Tushar Manudhane
Understood. And just one more if I may squeeze in with respect to semaglutide. While the addressable market size seems to difficult to highlight, but broadly, given that ex North America market, let’s say Canada, India, Brazil market, can this product do as much as revlimid has done for us in North America?
Erez Israeli
I wish. We — I don’t see — first of all the product has the potential to be big, but we need to see what will be the prices, what will be the market share, etc. But there is a potential for something significant. Like I mentioned before, we are not — it’s not product replacing one product. The growth post revlimid will come from four elements that I mentioned. So first of all, the growth of the base products. We have about 30,000 CR sales that is growing double digits of base business including of course the new product that will be launched [indecipherable].
Second one, we discussed, we are aligning our expenses to the relevant revenues that we have and we are creating that level of productivity as well. Number three, we have those special products like semaglutide and abatacept. And number four, we have BD. We have all the time green BD. So all four elements will grow us. It’s not one silver bullet. We highlighted specifically the sema at the time because of the timing in which this project is going to affect and I’m happy that you guys picked it up, but it’s not that sema will replace lenalidomide. It’s all the business leaders will have to grow and this would allow us to continue to grow the company, also post the arrangement of revlimid.
Tushar Manudhane
Got it, sir. Thank you.
Operator
Thank you. The next question comes from Saion Mukherjee from Nomura. Please go ahead.
Saion Mukherjee
Yeah, hi. Thanks for taking my question. Sir, just one question on semaglutide. Is the oral formulation available for launch in 2026 in India and the other emerging markets or it would just be injectable and oral would come some time later? If you can highlight the timelines for different formulations.
Erez Israeli
Oral will come later. In some places, there are also patents on the oral and the formulations. So in most of the markets, it will come between 12 to 18 months after the Ozempic, but we are planning to be day one in all the places that we can with this product.
Saion Mukherjee
So in calendar 2027, you will see more launches.
Erez Israeli
In some markets it can be ’27. In some markets will be ’28.
Saion Mukherjee
Okay. Thank you.
Operator
Thank you. The next question comes from the line of Foram Parekh from Bank of Baroda Capital Markets. Please go ahead. Ms. Parekh, your line is unmuted. Please proceed with your question.
Foram Parekh
Yeah. Am I audible now?
Operator
Yes. You’re audible. Please go ahead.
Foram Parekh
Yeah. Thank you for the opportunity. My question is on the European market. So ex of NRT, the European market has grown at 22%. So how sustainable is this growth rate going forward? And if you could explain the reason for this kind of growth. Thank you.
Erez Israeli
First of all, it is sustainable. We are launching products. So the main of course is normal. We are the market leaders primarily in five countries that we are operating today. We are working primarily in top five, but we are expanding also to five more. And so it’s a combination of new products, volume growth in the product that we launch a new market. So it’s absolutely sustainable.
Foram Parekh
Sure. Thank you.
Operator
Thank you. The next question comes from the line of Anubhav Agarwal from UBS. Please go ahead.
Anubhav Agarwal
Yes. Thank you. Two questions. One is for MVN, sir. Just trying to understand the selling expenses in this quarter. So do they include any selling expense for NRT or they don’t?
M V Narasimham
Yes. It includes the NRT business SG&A.
Anubhav Agarwal
So just trying to understand SG&A, sequentially December over the September quarter, selling expenses excluding amortization is up like INR60 crore whereas NRT itself should have selling expenses of INR150 crore plus. So what else has gone down that net increase is only INR50 crores for us?
M V Narasimham
So if you look at just — maybe to recap, our last quarter discussions, I think there was one exceptional expenses of stamp duty, was amount INR52 crores was there in the previous quarter. And this quarter, we have full NRT expenses. If you look at then, I think you’ll get the right math.
Anubhav Agarwal
Okay, sure. Second question is on — you guys have earlier mentioned that you have two good products in the US. You talked about iron sucrose as A CR on API. What about the other? Is there any query or inspection or anything spending for it or do you still expect approval for the other product [indecipherable]?
Erez Israeli
So there were no other queries that came recently. As for inspections, yeah, we do expect inspections in all the sites that were not inspected for quite some time. So we do have about five or six sites, I need to count, that we should see inspections. Of course, those inspections will come at the time that the FDA will choose to do, but there is no pending activities per se. So the rest is business as normal.
Anubhav Agarwal
Sorry, my question was very specific to a product. So you guys have mentioned two approvals. One, you talked about iron sucrose. Second is another product. Do you still expect approval of the other product anytime now or is that pending from a query or anything else?
Erez Israeli
I don’t know which other product you are referring to, but I’m expecting approvals of 15 to 20 products in the US in addition to iron sucrose.
Anubhav Agarwal
Sorry, Erez, you mentioned on the last quarter call —
Erez Israeli
[Speech Overlap] We just mentioned because answering a question that we got to see our approach.
Anubhav Agarwal
Okay. Thank you very much.
Operator
Thank you. The next question comes from Vishal Manchanda from Systematix. Please go ahead.
Vishal Manchanda
Hi, thanks for the opportunity. Hope I’m audible.
Erez Israeli
Yes, please.
Vishal Manchanda
Yeah. So on abatacept filing, whether we’ll be filing both the ID and the subcutaneous in December 2025?
Erez Israeli
The answer is yes, we do, but the time of launch is not the same because there is additional patent on this subcutaneous, which takes us, if I remember correctly, to beginning of ’28.
Vishal Manchanda
Subcutaneous will be beginning of ’28.
Erez Israeli
This is the — what we believe is the time to enter the market as per the — our IP people. Yeah.
Vishal Manchanda
Okay. And second, on the semaglutide filing in Canada, are there any device patents that can block your version as a substitutable version to the Innovator copy?
Erez Israeli
We don’t think so.
Vishal Manchanda
And is your device identical to the Innovator device or you have a different device?
Erez Israeli
We have a great device.
Vishal Manchanda
Sorry?
Erez Israeli
We have an amazing device.
Vishal Manchanda
Okay. And just one final one. Whether we should expect your SG&A expenses to stay at current levels, 28% going forward?
M V Narasimham
Yeah, around this level.
Vishal Manchanda
28%.
M V Narasimham
Yeah.
Vishal Manchanda
Okay. Thanks. That’s all from my side.
Operator
Thank you. The next question comes from Shashank Krishnakumar from Emkay Global. Please go ahead.
Shashank Krishnakumar
Yeah. Hi, thanks for taking my question. First one was, just wanted to get your sense on the broader US biosimilar landscape. Given that our incremental investments are being directed to our biosims, we are increasingly seeing PBMs launching their own private labels. I think starting this year, several Humira biosimilars will also face formulary exclusions. So how do you see the overall US biosimilar landscape shaping up, given that there are several products in the pipeline?
Erez Israeli
So I’m assuming it’s more of a strategic question. So first of all, a lot of products, if you go, it will come gradually, but for the next decade will be off patent, many, many products and many bispecific as well. So in that respect, it’s an opportunity. Second will be there will be absolutely products that will be more crowded and therefore very high level of competition. And you will have a product that will be less crowded in that respect. Absolutely we are going to see private label, we are going to see all kinds of phenomena related to paying for the products. So we are preparing for a very competitive landscape. And like I mentioned in the past, we are not going for all, but we select certain products that we believe that we can make the difference and can add value to the respective market. We are trying to go for limited number, but with hopefully less competition type of a product and hopefully we will be right in the way we select it. So far I believe that products starting from abatacept are meeting this criteria.
Shashank Krishnakumar
Thanks. That’s helpful. And secondly, just had a question on DFD-29. Are we also eligible for sales-based royalties here, given that the product has now been approved?
M V Narasimham
Yes.
Erez Israeli
Yes, we do. Yeah.
Shashank Krishnakumar
Got it. Thank you. That’s it from my side.
Operator
Thank you. The next follow-up question comes from Bino Pathiparampil from Elara Capital. Please go ahead.
Bino Pathiparampil
Hi, just quick housekeeping questions. One, the depreciation and amortization rate. This quarter is a — is this quarter a good benchmark to project it forward?
M V Narasimham
No. This quarter’s amortization includes NRT business amortization. It will continue.
Bino Pathiparampil
So this rate is a stable rate to look forward to? Okay. Second question. The Russian currency has depreciated. Do you — have you hedged the currency and for how long?
M V Narasimham
So we have a — both I think we do cash flow and balance sheet hedges. This quarter, we have a little bit impact I think because of the ruble volatility in the balance sheet on the cash flow hedges, I think as per our policy, we don’t cover 100%. We cover some extent and then there we are not losing any value.
Bino Pathiparampil
Okay, so your this quarter Russia reported revenue in INR will be roughly at the current market rate of rubles, right?
M V Narasimham
Yeah. This quarter, I think if you see constant currency and INR, both 19% and 20%, not much difference, both INR and ruble terms.
Bino Pathiparampil
Got it. Thank you.
Operator
Thank you. The next follow-up question comes from Surya Narayan Patra from PhillipCapital. Please go ahead.
Surya Narayan Patra
Yeah, just a clarification. Thanks for this. In case of the semaglutide opportunity, what is the level of integration that we are having in terms of our manufacturing capability to the level of advanced intermediate, intermediate levels or it is API and the formulation?
Erez Israeli
So we are fully integrated for all the stages of the API. We are making the peptides from the basic building blocks as well as the formulation. We are buying the device.
Surya Narayan Patra
And it is for both solid state as well as liquid state, as you mentioned, the entire value chain that you said.
Erez Israeli
The entire value chain. Yeah.
Surya Narayan Patra
Okay. Sure, sir. Yeah. Thank you. Thanks for this.
Operator
Thank you. Ladies and gentlemen, we have to take that as our last question for today. I now hand the conference over to Ms. Richa Periwal for closing comments.
Richa Periwal
Thank you all for joining us for today’s evening call. In case of any further queries or clarifications, please get in touch with Aishwarya or myself. Thank you once again.
Operator
[Operator Closing Remarks]