Emcure Pharmaceuticals Ltd (NSE: EMCURE) Q1 2026 Earnings Call dated Aug. 07, 2025
Corporate Participants:
Piyush Nahar — Senior Director, Corporate Development and Strategy
Satish Ramanlal Mehta — Chief Executive officer and Managing Director
Tajuddin Sabir Shaikh — Chief Financial Officer
Unidentified Speaker
Samit Satish Mehta — Executive Director, Operations
Vikas Madan Thapar — President, Corporate Development, Strategy & Finance
Analysts:
Amey — Analyst
Alankar — Analyst
Gagan Thareja — Analyst
Bharat Shah — Analyst
Tushar Manudhane — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day and welcome to MQR Pharmaceuticals Limited Q1FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask question questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touch tone phone. Please note that this conference is being recorded
Today. We have on call Mr. Satish Mehta, CEO Mr. Samit Mehta, Executive Director. Mr. Vikas Thafer, President Corporate Development C Strategy and Finance. Mr. Tajuddin Sheikh, CFO Mr. Piyush Nahar, EVP Corporate Development and Strategy.I now hand over to Mr. Piyush Nahar. Thank you. And over to you, sir.
Piyush Nahar — Senior Director, Corporate Development and Strategy
Thank you, Ashi. Good afternoon everyone. Earlier today we released our financials for the first quarter of fiscal 2026. Along with the press release, these are also posted on our website. We hope you all had a chance to review it. I’d like to bring to everyone’s notice that this call is being recorded and the recording and transcripts will be available on our website.
Before we begin, I want to remind everyone about the safe harbor related to today’s investor call. Today’s discussion may include forward looking statements which must be viewed in conjunction with the risks that our business faces that could cause our future results, performance or achievements to differ significantly from what is expressed or implied by such forward looking statements. At the end of the call, if any of your queries remain unanswered, please feel free to connect us.
I’ll now request Mr. Satish Mehta, our CEO, to provide the opening remarks. Thank you. And over to you.
Satish Ramanlal Mehta — Chief Executive officer and Managing Director
Thank you, Piyush. Good afternoon to all of you. It’s a pleasure to speak to you again. Post our first quarter results of FY26. I am pleased to share the positive results of your company to start off the fiscal year ahead. We had a strong start to the fiscal year with all businesses, all verticals showing excellent growth. Overall. Our revenue grew by 15.7% year on year while EBITDA grew by 20%. Our profit after tax pad grew by 41% and we reported our highest operating profits of 215 crores. I repeat, 215 crores. Let me now provide key business updates for the quarter which ended Our domestic business grew faster than the industry in the quarter under the reference, we saw strong growth in all of our P therapies as if Kynek, Cardiac, Anti infective and vitamins. As I told you in the last call, our new initiatives that we have taken in Dharma and Consumer Wellness are seeing a positive trend and strong traction. We expect Dharma as well as Consumer Wellness to become our key growth drivers in times to come. We continue to take steps to strengthen and synergize we continue to take steps to strengthen and synergize our domestic business. We expanded our partnership with Sanofi for the Diabetes segment. You are aware that is part of the public domain. We will now be marketing and distributing Sanofi’s oral Diabetics portfolio with key brands Emeryl and ketapine. These two brands will be promoting from 1st of August. As you know 15 months back we also have the cardiovascular portfolio and we have done a reasonably good job now with this cardiovascular portfolio. Now this Metabolics. I am pleased to tell my shareholders whether that your company is emerging as a strong player in the field of Cardio diabetes cement. We were strong in cardio with Amerine and Philippine. I have every reason to believe that you will also emerge as a prepared to reconnect in metabolism diabetose segment as well. I am pleased to inform that we are strengthening our team with some significant additions. I am happy to welcome Mr. R.S. wasand into the Ncure family as President India Business. He brings with him rich experience in managing India formulation business of last 40 years. We stint with various multinationals. And Indian company and as far as this last 15 years are concerned you are still only Sun Pharma. We remain confident that we’ll continue to grow about industry during the year with the steps that we are initiating and I’m pretty confident about our journey in the domestic business. With some briefing about the domestic business let me now move to the international segment. Our international business grew strongly by 20% with all the verticals on the geographies seeing a pretty good traction. Our Canada business about which you know I spoke to in previous quarters continues to show strong growth led by market share gains and new launches. Our rest of the world we call it as emerging markets is also seeing a strong traction in both ARV and non ARV segments. This is led by new product approvals in our target benefits. I told you that we have a reasonably strong presence in arv but at the same time the strategy is to emerge stronger in non ARV segments and this is driven by unique products that we are also selling in the emerging markets. I am happy to inform that Europe grew in double digit growth and we have a healthy pipeline going forward. As mentioned, as mentioned in my last call, NQR has embarked on a journey of growth and improved margins through innovation, partnership and newer geographical reach. This is the first year. This is the first year of five year vision to take NQR into the next orbit. I repeat, this is the first year of our five year vision to take into the next orbit. During this period our focus will remain on building strong foundation through investments in new technologies, processes and above all people who deliver highly profitable and above average growth. I repeat, our focus will remain through investment in new technologies, processes and people who believe were highly profitable and above average market growth. Let me repeat once again that NQO remains an India business company with huge opportunity to tap the unmet medical needs of over 1.4 billion Indians. We are very very committed to the domestic market. All I can say is that we at MCUR are very excited and absolutely excited in this phase as we see a huge opportunity unfold ahead of us. We remain focused on building a company that creates everlasting value for all its stakeholders. We remain focused on building the company. That creates everlasting value for all its stakeholders. I am very satisfied with what we have achieved so far and even more excited and even more excited about what lies ahead of us. I will end my opening remarks by saying I will end my opening remarks by saying was this space as more and more exciting opportunities unsold helping make your company one of the most admired companies within the pharmaceutical industry. Watch out for this particular space as together with new people your company will emerge as one of the most admired company within the pharmaceutical industry. Let me touch base on another topic of interest before I conclude we all keep on talking about tariff and what’s happening with the Trump administration. Unfortunate but true. That 50% tariff has been launched with exports from India and you never know what is going to happen about the pharma industry. Only President Trump knows about it. But I want to highlight that your company is predominantly insulated from US market with our exposure to US being less than 3%. Let me relate that as far as NPR is concerned, your company is predominantly insulated from the US market with our exposure to US being less than 3%.With these remarks, I will now pass on the call to my CFO Tajud Bin Sheikh to share the financial details of last quarter before we open up the floor for your questions and answers. Absolute pleasure in talking to you and thanks for making it convenient to attend the call, which means a lot to me personally and obviously to the company your continued interest in nql. Thank you very much.
Tajuddin Sabir Shaikh — Chief Financial Officer
Good afternoon everyone. Thank you for joining us today. Before we move to the Q and A, I’ll take you through some of the key financial highlights for the first quarter. Revenue from operations for the quarter grew by 15.7% year over year to 2,101 crores, up from 1815 crores in Q1 FY25.
The domestic business grew by 9.4% year over year to 995 crores, driven by strong performance across all key therapies. International markets maintained solid momentum, growing 22% year over year to 1106 crores. Emerging markets grew impressively by 42% year over year to 360 crores, with strong contributions from both ARV and non ERV portfolios. Canada reported a 16.4% growth to 342 crore. Europe saw robust growth of 12.8% year over year, reaching 403 crore. Gross margins for the quarter stood at 61.8% versus 57.8 in 4Q and 62.4 in 1Q of 25. The change was driven largely by product and business mix. EBITDA excluding other income grew 20.1% year over year to 404 crore. EBITDA margins stood at 19.2% versus 18.5% in Q1.24 and 18.4% in Q4.25 supported by strong operating leverage and productivity gains. Depreciation and amortization was flattish quarter over quarter at 99 crores. Interest cost was 27 crores, reflecting lower borrowings. The effective tax rate stood at 26%. Profit after tax came in at 215 crores, showing strong growth of 41% year over year. With that, I will now open the floor for questions.
Questions and Answers:
Operator
Thank you sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Mr. Ame from GM Financial. Please go ahead, sir.
Amey
Yeah, thank you for taking my question and congrats on good numbers. Hello, Am I audible? Hello,
Operator
Mr. Rama, are you on the line?
Amey
Yeah, I’m on the line. I’m Audi. Hello. Hello? Hello? Hello, AM I audible?
Operator
2nd Mr. Ram, could you come again?
Amey
Yeah, am I audible?
Operator
Yes sir. Please go ahead.
Amey
Yeah, thank you. Thank you for giving opportunity and congrats on good numbers. So I had joined it late so in case I’m repeating the question just so, basically the 9% growth which we have delivered this year in India, is it fair to assume that this pace is on the normal base as well? If you can give us the breakup in terms of the volume and price for this 5% growth for the quarter.
Unidentified Speaker
Sure, yeah. This is on a normalized basis. So there’s nothing left. I think in terms of the price, volume and all volume would have been about 4%, price about 4% and about couple of percent of 1 to 2% of the new launches that we have.
Amey
So is it fair to. Say that from the negative trajectory of volumes in post Covid for two years then last year around 2% volume growth. What we have seen now we are moving towards like 4 to 5% kind of a volume growth for the full year.
Unidentified Speaker
Yeah, that is what we are targeting.
Amey
Sure. And going ahead because there will be diabetes sales additions happening right from the Sonofi. So how should we look at the number for the full year? Is it possible to quantify how much will be the sales coming in from the Sanofi dividends portfolio?
Unidentified Speaker
Sanofi would roughly be about a 200cr portfolio analyzed that we have. So you’ll get about nine months of that in this. We started from August. Yeah.
Satish Ramanlal Mehta
Seven months.
Amey
Sure.
Satish Ramanlal Mehta
How many eight months is we getting in the current year? And on annualized basis, you know it is 200 cr.
Amey
Got it. And in terms of Mr. Addition has there been any MI addition for diabetes or we would be working with same cardiometabolic Mrs. So we already.
Unidentified Speaker
Yeah, so we already had three divisions in the cardio diabetic state. So we’re not adding umr. This will get fit in the current ones.
Amey
Sure. And the last question I have on the FCM performance, if you can elaborate for this quarter, how the performance has been, especially now the competition has been largely settled in.
Unidentified Speaker
So I think there on the perception side, not we actually seeing. So this quarter the order for FCM grew in double digits for us. So that is doing well for us. I think there you see where I think it’s still a bit more challenging is on the institution side note, where pricing some of the competition is still there at lower prices. But I think on the promoted side we are seeing attraction and revival.
Satish Ramanlal Mehta
Just to add because what really happens, I mean the promotion we are essentially focusing and quality and certain parameters where we are better than the competitors because as you know, this particular product in the company for the first time. So we are having a lot of data and the scientific promotion is also helping us. And I think we are getting the traction going forward. And as Piyush rightly said, in prescription market we are doing well. But when it comes to the question of institutions, the challenges remain.
Amey
Got it. And this last question, like how much will be the mix in terms of prescription and institution for us for that particular product franchise.
Satish Ramanlal Mehta
Asking what for the overall
Amey
For Axiom franchise, how much would be the.
Unidentified Speaker
I think now a majority will be prescription driven now.
Amey
Okay, sure, sure. So that should start reflecting in our performance. Thank you so much. I will join.
Unidentified Speaker
So yeah, we have launched two areas. The one is which we talked about the pcos and second is on the menopause. Both of them have been launched in last quarter. I think as we talked about last time, these are new concepts we are trying to establish in the market. So early days, but we are seeing good traction out there. But I think for them to become material it will take time because we are still establishing these concepts out in the market.
Alankar
Understood. And also if you can comment piyush on the performance of the Iron portfolio in this quarter.
Unidentified Speaker
On the iron, yeah, Dynamics has done very well for us, which is basically largely iron. I think there we are going much ahead of the industry. So even if you look at IQVR, the IQVR reflection is about 30% growth in the Gynex segment. And so all of our XP continues to grow in double digit fcm. As already talked about in the prescription side, we are again now in double digit growth. So the Iron segment is now back on growth for us.
Alankar
Understood. Just one question there before I get into the international business on fcm, a clarification. If I take into account both the prescription business as well as the institutional business, was there any drag at all? If I look at the reported domestic growth in this quarter,
Unidentified Speaker
It will still be about 1% drag. The expo taxes have been about 10.5%.
Alankar
Okay, so I just said for Auror, for FCM the growth is about 10 and a half percent in India. Okay, got it. Then on the international bid, was there any meaningful benefit of the Amphotericin B launch in Europe in this quarter or we expect the ramp up to be more gradual towards the course of the year.
Samit Satish Mehta
Yeah. This is summit in uk. Yes. You know, we have started actively supplying, however in Europe. As we had told you over the last call, we got the approval under the DCP and each country typically takes anywhere between three to five months for its own national approval, which we expect to start. Start from the end of this quarter. So I think the ramp up in the second half of the year will be much higher than what we will see in H1.
Alankar
Understood, that’s helpful. And a quick one on ARV and non ARV. Now, Satish sir mentioned about good growth in both ARV and non ARV in row. What was the ARV contribution in this quarter
Unidentified Speaker
Would have been roughly about half.
Alankar
Sorry, you mentioned 50%.
Unidentified Speaker
50%.
Alankar
Okay. Okay. And final question from my side. Any update on the filing of semaglutide in Canada?
Samit Satish Mehta
Yeah, in Canada. In Canada this month we will be executing our filing batches. So I think we continue to be on track to file the towards the end of this fiscal year.
Alankar
Got it. And in India, I’m assuming we are on track to be among the first wave of launches, as you had mentioned earlier.
Samit Satish Mehta
Yes, that continues to be our effort.
Alankar
Got it. Got it. That’s it. From my side. Thank you very much.
Operator
Thank you. This is a reminder for all the participants. If you wish to ask a question, you may press star and one on your touchstone telephone. The next question is from the line of Mr. Gagan Tharija from Ask Investment Managers Ltd. Please go ahead.
Gagan Thareja
I hope I’m audible.
Operator
Sir, could you speak a little bit louder please?
Gagan Thareja
Okay. All right. So the first question is, is it possible to give some flavor on how the Sanofi cardiac portfolio is doing for you? 1q of this year compared to last year?
Unidentified Speaker
So the Sanofi portfolio, I think it’s broadly similar to what we are reported for the overall domestic growth it’s been doing. In line with that, I think our target for Sanupya will grow that in line with the ipo. And I think that’s what we have been there in one year.
Gagan Thareja
Okay. And you know, on the additional diabetic portfolio that you acquired from Sanofi, is it possible to understand the, you know, the rationale? Are these drugs not generally not seeing a slower sort of growth given that you had newer generation of of drugs coming in for diabetes or these still constitute the first line of treatment and therefore will you expect them to grow healthily?
Satish Ramanlal Mehta
Guru Ganji, this is Satish Mehta. Sulfonil urea continues to be first kind of treatment and products like glycomate and others continue to have traction. If you have. Recollect, you know, in the calls that I had probably a year back at that time, you know, I was trying to communicate to my equity holders that we would like to be strong, you know, in skincare, dermatology, we would like to be strong in metabolics as far as skin care is concerned. We took a big step, you know, by getting somebody like Satya starting MQTX and I’m getting traction. And as far as metabolics is concerned, this is a hook, you know, MRL which will connect all the major consulting physicians and diabetologists. With the help of that, I feel that there will be rub on effect on other products and will do well. As you know, our brand is doing quite well. That’s one of the top three brands post noe. So with Amaryl coming to the full our position in the diabetic segment, metabolics will significantly strengthen and that will also help us when we go for semaglutide as and when, you know, we get the loe. So this is plan of overall strategic thinking because with MRNA we get a good connect with the doctors and obviously the same doctors are my potential prescribers to the versamaltad as well.
Gagan Thareja
Okay. And was the salesforce also transferred to NQR from Sanofi for these?
Satish Ramanlal Mehta
No. That explained some time back we already have three divisions in cardio diabetes so this is going to be one of the divisions.
Gagan Thareja
All right. And is it possible to understand the contribution? I mean I understand it’s early days, but still possible to understand how the, you know, the Dharma and consumer awareness divisions are ramping up. Any flavor would be helpful here.
Satish Ramanlal Mehta
Currently we are in the investment mode. I mean we just started a few months back and, and after the morning in pharma the gestation period is 1824 months. But at the same time the beauties we are getting prescriptions, I mean the unique preparations we are launching in the Dharma segment and also whatever Namita is doing in Earth that is obviously very well received but this is a patience game. It’s not going to happen in a day. It has taken me 30 years to get the company to this level or buy Torah time to do here.
Vikas Madan Thapar
Just to add, I think what we had guided last time is that overall we think that these two new initiatives should drive about 1 or 2% additional growth in our overall domestic business. I think we’re on track for delivering that for the year.
Satish Ramanlal Mehta
Thanks Vik, very helpful.
Gagan Thareja
And one more thing on the asparagine and the YKMD product. Any further updates on, you know, when you believe you can come into the market with these?
Samit Satish Mehta
Sure. So for the rs, which is. Is we have already submitted our dossier to TCGI and we’re waiting to hear from them in terms of when they constitute the SEC and when it will be reviewed. So fingers crossed there and on the wet amb. Also very positive in the sense that we should be completing our clinical trial by the end of September. So whatever time it takes after that to compile our dossier and submit it to the cdseo. So very hopeful that at least one, if not both should get approval in this financial year
Gagan Thareja
And final one from my side you could give us the latest gross debt position for the company.
Tajuddin Sabir Shaikh
Latest gross Debt is around 700 crores.
Gagan Thareja
Thank you sir. Wish you all the best and I’ll get back in the day.
Satish Ramanlal Mehta
Thank you.
Operator
Thank you. The next question is from the line of Mr. Bharat Shah from ASK Investment Managers Ltd. Please go ahead sir.
Bharat Shah
Yes. Hi Satishwa. It was good to hear the five year journey that you outlined which will be marked by not just new partnerships but new innovation driving new products and geographies and underpinned by investment in people, processes and technology. So that’s refreshing to hear that we feel that on a sustained basis the group will commence of it this quarter is marked just to put a little bit of skepticism on that if you pardon me but ultimately in the pharmaceutical business sustained and predictable growth will come only from refresh portfolio of products,
The well aligned therapeutic areas and all of that is to be driven by new products developed through the sustained research effort but a large part of our portfolio. My intention is more. Me too. And therefore how do we aspire to remain on a continuous growth journey and or what are the steps being taken so that we address these gap on international side? Half the business.
Satish Ramanlal Mehta
Can I. Yes. Let me take a step back and tell you. In 1995 when I began my journey. Everyone dissuaded me from entering into the market and my friends from multinationals went to the external saying our market is very fragmented, very, very competitive and you are one of the last infant. Now when I’m talking to you in 2025, the reason why we have done well is because of science, innovation and technology. And I take pride in telling everyone that as far as my company is concerned, it is in the forefront in launching new products, giving new products to the industry. To give you a few examples, I gave 11 products in the field of chirality H, semirolepine, H Metoprolol escapolate. They have been doing exceedingly well. We gave ferrous Ascorbet for the first time. We gave ferric carboxy maltose about which you know, Ame asked, you know, sometime back ferric carboxy maltose. Similarly, you know we have given seven biosimilars and now, you know, Sameer just told you some time back we are talking about Asperger’s, we are talking about Brivacizumab. So to that extent as for the gene of the company is concerned, it is driven by science and technology and we are doing lot of work in R and D to that extent I am very confident that going forward my company will be in a position to bring new products because you are absolutely spot on. The compilation is very intense as far as me two products are concerned to that extent. For any company to survive and make headway, it has to focus on science and technology. And that’s one area where we are committed and we are taking a lot of steps in that direction. Would you like to add something? Nick? You can also chime
Unidentified Speaker
I think when we spoke about the five year vision internally for each of the years we have already identified which is the product launch for which a lot of the work has already been done, whether it is filing batches or submissions. So we have very crystal clear clarity on each of these five years the one big blockbuster product.
So for example like we did mention liposomal amputeer B similarly across the years building on the liposomal platform, there are a few other products, there’s of course GLP ones and within that some incremental innovation that we’re doing and, and of course towards the end, towards year four, year five, there will obviously be what we’ve spoken about earlier and for which we earnestly started at work the whole space of edc.
Satish Ramanlal Mehta
Vic would like to add something.
Vikas Madan Thapar
I think it’s covered.
Bharat Shah
So basically what we are saying is it is not merely a reason. Good to see. Kind of a statement, but it is. In other words, it’s not just good English, but there is a decent mathematics behind it.
Satish Ramanlal Mehta
Absolutely. There is absolutely a clear vision and game plan as well. Each therapeutic segment is concerned, so the strategy. Will be clear. R and D will drive one. The second thing, you know, we like to work with multinationals. We are demonstrated by working, you know, with Sanofi, we’ve got a big portfolio. Something similar will happen. That is number two and third part of the strategy will be, you know, working at global level to get some products like Sunit mentioned about or maybe something in phase one, pick them up and see whether we can develop for the domestic market. So there is absolute clarity at the senior level about when the new products will be launched in each and every therapeutic segment.
Bharat Shah
That is very heartening to know. A related question you mentioned, Satish Bhai, that this five year journey will be marked with above average growth rate. And could you be little more specific as to what is meant by that? Will it be double digit or very healthy? Double digit. What kind of growth did you have in mind? And also on the margin make a comment from 20% or that we are now at. Do you think our margins also what kind of trajectory would hold out?
Satish Ramanlal Mehta
So I will break it in two parts. As far as the growth part is concerned I will answer margin part, you know, which will answer as far as growth is concerned, I would like to have 2% more than the industry growth. Whether we are talking about India or other markets. Okay. Other markets are also very, very competitive,
Europe and Canada. So that will be the aspiration if you grow by more happiness. But at least the basic objective will be to grow by 2% more than the industry growth in various markets. And regarding margin, we’re talking that there is a journey towards the desired results. I will ask you to opine on that. Rick.
Vikas Madan Thapar
Yeah. So you know what we have guided, if you can hear me, is that from the roughly margins that we’ve guided to for this year we should continue the journey of increasing our margin profile by about 3, 400 basis points over this four or five year journey which will be driven by obviously both productivity gains in terms of our India business as well as improving our gross margin profile with the business and product mix that we will be working on in the pipeline and overall operational effectiveness in terms of just the scale economies we will get as we continue to scale different verticals within our business.
Bharat Shah
Which means about 20% operating margins now over the five year period. It should be somewhere in the bend of 23, 24%.
Vikas Madan Thapar
That continues to be the goal and aspiration that we’ll be working towards.
Bharat Shah
Thank you. And one last thing. When do we think. The 700 crore debt on the books is likely to become zero.
Vikas Madan Thapar
You know if I can just add there on the debt was that barring any M and A that should be approaching close to zero even by the end of the current fiscal year. Having said that, two of our recent announcements, one was with the acquisition of a product portfolio from Manx which is going to be paid for in various milestones as well as our recent announcement of acquiring the minority stake from Zoventis.
I think these two initiatives will obviously add to our gross debt position which will probably push out our debt going to approaching zero by at least one one and a half years going forward. Having said that, both of these initiatives we think are going to be very accretive and I think is money well spent that we have announced.
Bharat Shah
Sure. Thank you very much and all the very best satish bhai and the entire M13.
Satish Ramanlal Mehta
We very much value your support and thanks a lot for participating and kindly feel free to reach out to us anytime we are available 24 7. We value your support.
Bharat Shah
Much appreciated. Thank you.
Operator
Participants, if you wish to ask a question you may press star and one on your touch tone telephone. We will wait for a moment while the question queue assembles. The next question is from the line of Mr. Tushar Manudani from Motilal Oswal Financial Services. Please go ahead sir.
Tushar Manudhane
Thanks for the opportunity. Joined with leads I’m not sure if we addressed but just wanted to understand on the gross margin, front quarter quarter where the business composition in terms of geography has not changed much but we’ve seen good improvement in the gross margins. If you could just elaborate on that first.
Unidentified Speaker
So the gross margin I think what we indicated last time, right. It’s largely driven both by the product mix in the international. So I think we have to look at more at an annual level. For annual level I think what we indicated is we expect this year to be about 50 basis points higher than what we ended last year. So. But between quarters you will have variations depending on the product mix that you have across businesses.
Tushar Manudhane
Got it. And as far as the India market is concerned, of course there’s secondary data available but if you could throw some light in terms of which therapies we’ve sort of performed. Better than the industry and where we have dragged
Unidentified Speaker
I think Cardiac and Gynax will be done better. Cardiac also been more in line I think so those two have then others I think they are more and less in line with the industry which has what has given a bit more as I talked about is some of the new launches and all come up.
Tushar Manudhane
Got it. And as far as emerging market is concerned, where we have seen on a year on year basis sharp increase in revenue but how to think about it on an annualized basis for next two, three years?
Unidentified Speaker
I think for this year what we have indicated is that for the emerging markets we expect to grow in high teens closer to 20% around that.
Satish Ramanlal Mehta
And again what will happen for emerging markets when we are talking about say ARV and non arv? ARV is a function of winning the tender so there is an element of uncertainty. So it’s very difficult to predict what happens though the company is in good position and as far as non ARV is concerned that is also a function of getting registration in various countries and if you get the registration slope or some products through that market in that case there will be uptick.
So I think one can as Piyush rightly said, we talk about the base business as I mentioned some time back normal growth was 2% that will be the expiration. But suppose if we get to know some of the products register for which the number of bikes are pending there will be obviously be an upside.
Tushar Manudhane
And as far as let’s say operational cost, is it going to have some meaningful increase let’s say FY26, FY27 or is it more to do with like inflation linked increase?
Unidentified Speaker
I think it’s largely inflation linked and the business growth.
Tushar Manudhane
So as far as our business growth is more than the inflation then effectively it should help get much superior EBITDA margins as we go along, right?
Unidentified Speaker
Yes, that is the intention. That’s what bit was indicated.
Tushar Manudhane
Yeah, I meant to ask is effectively but should you know reflect in FY26 itself where FY25 at least the EBITDA margins or Q1 it was similar to the fourth quarter or first quarter. So I’m just trying to ask that when do we see that improvement in the margins?
Vikas Madan Thapar
I think what we had guided last time was that even on the operating cost side we should see about 100 basis point improvement vis a vis last year on account of both of these areas better productivity with the Indian field force as well as some of the scaling of the business and better utilization of our manufacturing facilities. So overall as. Business continues to grow healthy double digits and inflation where it is, that’s where we feel bullish that we’ll continue to get roughly that 100 basis points of expansion that we had indicated.
Tushar Manudhane
Got it. Thank you.
Operator
Thank you. The next question is from the line of Mr. Alankar from Kotak Institutional Equities. Please go ahead, sir.
Alankar
Yeah, thank you. Samit, you mentioned about working on an incremental innovation in GLP1. Can you please elaborate on that?
Samit Satish Mehta
Sure. So in terms of, you know, some of the approved GLPs, we are looking at some tweaking in terms of improving the compliance through different, you know, dosage systems and the instrumental innovation within the formulation space.
Alankar
Okay. And I mean currently our filing both in India as well as markets like Canada would be through the synthesis route, right?
Samit Satish Mehta
Semi synthetic. Yes. That is going off patent in 2026. The fermentation route, the semi synthetic is going off in 2028. So we’ll be fully synthetic right now.
Alankar
Fair enough. The other question was on this jointus acquisition. Now due to this acquisition, will there be any change from an operational standpoint in the acute business?
Samit Satish Mehta
No, no, nothing changes.
Alankar
Okay. Okay, fair enough. And the final question is more of a clarification on what Vic just mentioned. I think in the previous call we had spoken about 150 basis points EBITDA margin expansion for FY26. So is it 100 basis points or 150 basis points guidance for FY20?
Vikas Madan Thapar
Yeah, so I was specifically alluding to the OPEX portion of it as 100 basis point. Piyusha just mentioned that we also anticipate 50 basis points expansion in our gross margins based on the product and business mix.
Alankar
Understood. That clarifies it. That’s it from my side. Thank you.
Operator
Thank you. The next question is from the line of Mr. Gagan Tarija from ASK Investment Managers Ltd. Please go ahead, sir.
Gagan Thareja
Yeah, thanks for taking the follow up. The first one is on Mervy. I believe there’s going to be a retaining cycle this year, later this year. Any idea you can give us in terms of whether funding agencies from a budgeting standpoint are going to be constrained or. That is not a constraint whatsoever. And secondly, Lena Kabavi. Now has imposed the phase three trials. Even WHO strongly recommends for prophylactic benefits to take up in the Capavir. How do you see this evolving over a period of time? Do you see Lenacavir becoming the first line of treatment perhaps in the next two, three years?
Satish Ramanlal Mehta
First question will take Lena. Couple of minutes will take and I will also chime in
Unidentified Speaker
On the pending. I think as of now we haven’t heard anything that there’s any constraints on happening. I think most of the tenders are continuing as normal, so we haven’t seen that impact.
Samit Satish Mehta
And in terms of Banagar Pravesh? Absolutely. You know, it’s not entirely certain how long the duration will be before that becomes the treatment of choice because different countries and different agencies have to change their adoption protocols. But definitely in the medium term it should be one of the dominant therapies as far as the ARV space goes.
Satish Ramanlal Mehta
One more thing I would like to tell you. If you see the latest issue of Economist they are extensively covering HIV and a couple of constraints. I would like to flag off one as far as the PEPFAR condition do restore but at the same time against three and a half billion dollars that they have been giving, it has been reduced to $2.9 billion.
If I remember correctly. The second thing that has been happening the Americans have been the most generous in terms of contributing to Global fund there also the funding has been reduced. So I think what really happens after a couple of years as and when Lena Kappa Vir hits the market, I think the product no one can question the security.
This particular article also says that Lena Kappa Wheel is going to be a game changer. But the funding, global funding, PEPFAR funding, then all the governments which will be interested in buying that will also play a very important role because unlike what is happening right now like tld, it’s not going to be that cheap.
I believe can I say that PLD is not. It’s going to be a game changer but at the same time there will always be a cost attached to it. So when you have to wait and watch how it plays out. But it’s technological breakthrough, let’s accept that it’s a big thing.
Gagan Thareja
And is it possible to give some idea of the EU business growth except the Manx numbers which I believe would have been there in the contribution for the first quarter.
Unidentified Speaker
Manx was quite small, trapping about 1 to 2 million in the quarter. I think Manx will ramp up over the quarters.
Gagan Thareja
Okay, all right. And any possible to give any idea of, you know how you see the scale up in liposomal amphotericin and Tenex. To place over the next, let’s say, you know, two to three years. What, what sort of scale is it possible here? And also in the other two, you know, products which are under trials for you? Any, any possible idea?
Samit Satish Mehta
Sure. So in terms a few big markets where our product is, you know, likely to get approved in the near future, the kind of capacity we have created and the best we have taken on this product are pretty significant because there are two different facilities with large lyophilization capacities that we have installed and are ready to churn out product.
So I don’t see any constraints coming in in terms of capacity. And I think the full effect of all the approvals in the max volumes will probably materialize in the next 12 months across different geographies. Probably in Europe and UK and US will be more near term in the next four to six months. But some of the other big emerging markets where the full potential will probably take 12 months.
Satish Ramanlal Mehta
Now the second question that we asked was regarding directed.
Samit Satish Mehta
Yeah, no, I’ll come to that as well. So on connector plays as well, you know, not only are we seeing new registrations flow in for the original indication of mi, which is your myocardial infarction, but surprisingly there’s a lot of interest and optic also happening which is doctor driven from those countries for the indication of stroke.
There are countries which have started picking up small volumes on inpatient basis. They are seeing excellent results and we are now pushing towards getting full registration which will then have a log fold increase in terms of the kind of offtake that happens. So tenecteplase is going to be again in the next 18 to 24 months a very dominant product for us.
And in terms of the other two in the pipeline, as far as clinical trial, I’m assuming you’re referring to R asperginase and bevacizumab there as well. The trials have been done, keeping in mind a dossier that can be submitted across all the emerging markets. So for example, for RFPergenase reference product is the EU approved product and hence once that approval comes through, we should also be able to pile across a lot of different countries where there is a severe unmet need. So Overall across these four products, we see the next 18 to 24 months having a significant ramp up.
Gagan Thareja
That’s great. And the final one from my side, sir, Canada, is the 1Q growth sustainable for the full year?
Vikas Madan Thapar
Yes. So in Q. Canada I think the growth is sustainable. We had basically been guiding to sort of a mid teens growth rate for the Canadian operation as a whole. And we’re very happy with the mantra acquisition which continues to track even ahead of our own expectations at the time of doing the deal and some of the synergies even at a product level being rolled out across Canada as a result of that continue to play out. So we are very bullish on continuing that momentum for Canada.
Gagan Thareja
Thanks for taking my questions. I’ll get back in the queue. Thank you.
Operator
Thank you. The next question is from the line of Bhavesh and individual investor. Please go ahead. Yes Mr. Bhavish, go with the question please. If there is no response from the participant we’ll move to the next the next question is from the line of Bharat Shah from axe Investment Managers Ltd. Please go ahead.
Bharat Shah
Satish by more than a question I just wanted to it was an sight of a comment when you were referring to the ARB portfolio internationally and the contribution from America to the program which is supported and you refer to the generosity which has declined. But I just wanted to say America and generosity are oxymoron of terms.
I thought I’ll just put that a little bit of view on that and then to a question based on the five year vision plan that we have done in terms of capital expenditure on assets, I suppose more or less we are in place. In other words it’s unlikely that we will be incurring material capital expenditure in buying, putting more assets, manufacturing assets. Is that understanding? Right?
Unidentified Speaker
I can take that question. So you know what we had been guiding to is that we expect annualized sort of capex spending in the range of about 350 crores a year. If you look at that roughly about 150 crores of that goes towards more repair and maintenance capex and about 200 odd crores is ear March 4th. Some top up investments for capacity enhancements or product specific type capex requirements that we have. So bar anything else I think that’s the.
Unidentified Speaker
Range that you’re going to see on the CapEx front. Of course we will continue to evaluate and be aggressive in terms of any M and A or strategic alliance or in licensing deals which may have some capital allocation there. Our focus areas are obviously going to be India first and foremost and some of the emerging markets. And to the extent that we have an opportunity to get some product both on portfolios in places like Europe like we have recently done, or Canada will continue to evaluate those as well.
But by and large you’re right that most of the infrastructure required to cater to our four five year growth plan is already well in place.
Bharat Shah
Thank you. That gives a complete clarity. Thank you so much.
Operator
Thank you. The next question is from the line of Bhavish an individual investor. Please go ahead.
Unidentified Participant
Hello. Am I audible now?
Operator
Yes sir, you’re audible.
Unidentified Participant
Yeah. Good evening and thank you for the opportunity. Congratulations on a good set of numbers. My question is with respect to the cash and cash equivalent as on June 30, 2025. So. So just wanted the number.
Tajuddin Sabir Shaikh
Yes. 200 crores
Unidentified Participant
Including the investment.
Tajuddin Sabir Shaikh
Yes.
Unidentified Participant
So why there is no other income in this quarter then?
Tajuddin Sabir Shaikh
There’s a very small amount of other income. The amount of cash is at the end of the quarter, you know, throughout the quarter you don’t have cash used to reduce debt.
Unidentified Participant
Okay, okay. And one more thing sir. I’m. I’m a user of your MKO’s Aqua Oat moisturizing cream and and just wanted to provide, provide an honest review about it. So it’s a really good formulation and the cream does the job quite well. So just wanted to appreciate it and I’ll be a consumer and also a long term shareholder of the company. Thank you.
Unidentified Speaker
You are going to get line extension and absolutely super packaging, top of the line matching the global standards for the next two or three months. And we share one thing in common. I’m also a big time fan of Aqua Coat and I also utilize, I also utilize the product and what I think is the line extensions are quite exciting and I like it. If somebody likes, you know, my product it makes me feel happy. My hemoglobin level goes up man.
Unidentified Participant
So I’m using it for the last almost couple of years. So one derma, she recommended me so she was the HOD of KM Hospital so she recommended me that go for a.
Unidentified Participant
It will reduce your sensitivity of the skin. So it has been a helpful cream for me. And it’s the plus point of the cream is it’s a fragrance free. So a lot of creams in the market have fragrance and alcohol. So that doesn’t.
Unidentified Speaker
I mean many times, many times what really happens. So I’ve seen that it adds some fragrance will go for itching also. You know, that also happens
Unidentified Participant
One packet at home, like whenever it gets or get over, I bought another one. So thank you for it, sir. Thank you. And all the best for the future workers.
Unidentified Speaker
Thank you.
Operator
Thank you. Thank you. As that was the last question for the day, I would now hand the conference over to Mr. Piyush Nahar for closing comments. Over to you, sir.
Piyush Nahar
Thank you all for joining today’s investor call. If any of your queries still remain unanswered, please feel free to get in touch with us. Thank you.
Satish Ramanlal Mehta
Thank you very much. This is Satish Mehta. Your feedback means a lot to me. We feel very enlightened by the inputs given and we are committed to improve. Committed to take whatever suggestions coming from you very, very seriously. And we’ll work for your company with more leaders than ever before because you give us a lot of motivation. Thank you very much.
Operator
Thank you. On behalf of MQR Pharmaceutical Ltd. That concludes this conference. Thank you for joining us. And you may now disconnect your line. Thank you.