Eris Lifesciences Ltd (NSE:ERIS) Q2 FY23 Earnings Concall dated Oct. 20, 2022
Corporate Participants:
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Analysts:
Kunal Dhamesha — Macquarie — Analyst
Tushar Manudhane — Oswal Financial Services — Analyst
Amit Bakshi — Chairman and Managing Director
Mehul Sheth — Axis Capital — Analyst
Sonal Gupta — L&T Mutual Fund — Analyst
Unidentified Speaker —
Yash Tanna — ithought PMS — Analyst
Mahesh Vyas — UTI Mutual Fund — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY ’23 Earnings Conference Call of Eris Lifesciences Limited. We have with us on the call today, Mr. Amit Bakshi, Chairman and Managing Director; and Mr. V. Krishnakumar, Chief Operating Officer and Executive Director. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. V. Krishnakumar, Chief Operating Officer and Executive Director of the Company. Thank you, and over to you, sir.
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Thank you. Good afternoon, and welcome to our earnings call for the second quarter of financial year ’23. I’m Krishnakumar, and I’ll be sharing the highlights of this quarter and the first half of the year with you.
Oaknet, our recent acquisition in the month of May 2002 is emerging as a clear success story in value creation through M&A. Oaknet’s growth momentum continues with quarter two revenue of INR68 crores and EBITDA of INR16.5 crores, which represents an EBITDA margin of more than 24%. We are tracking to deliver an EBITDA of INR50 crores from Oaknet in this financial year.
Just to recap a bit. We had acquired Oaknet, as part of our strategic entry into the dermatology segment. Our thesis was that Oaknet brings in two strategic assets, firstly, a strong portfolio in medical dermatology with brands such as Cosvate and Cosmelite; and secondly, a good presence in the specialty with a coverage of 11,000 dermatologists across the country.
Oaknet had a revenue base of INR195 crores with an EBITDA of INR20 crores when we went into the business. Our target was to build the business and achieve an EBITDA of INR50 crores in two years’ time, that is in FY ’24. Accordingly, we set in various motions — various levers in motion of execution excellence, including, firstly, realignment of the divisional focus with specific product portfolios and doctor specialties to maximize growth impetus and minimize overlap.
Secondly, we expanded the bandwidth of the senior team. Thirdly, we digitized the entire field force and got them onto Eris’ proprietary digital marketing platform to enhance productivity. And fourthly, we saw an expansion of the dermatologist coverage from 60% to 90% in just three months.
We also kick started the investment cycle in the business by launching strategic products such as Dydrogesterone and FCM injection in the gynecology division. And we also lined up an interesting pipeline in dermatology and cosmetology for launch starting this month.
A few months into this deal, our growth thesis has been more than reconfirmed with the business having delivered a revenue of INR100 crores in a period of just 4.5 months with Eris. We are now tracking to deliver an EBITDA of INR50 crores in financial year ’23, which is one full year ahead of our expectations at the time of the deal announcement.
Now moving to the growth numbers. As per AWACS, Eris delivered a growth of 93% — 19.3% in quarter two of this year versus a market growth of 13%. This is on the back of an 8% growth delivered by Eris in quarter one versus a market growth of 2%. Hence, on a half year basis, Eris has delivered a growth of 13.6% versus the market growth of 7.4%. We have now entered an era, where we have clear visibility on secular growth over the next three years.
Let us begin with our Cardio-Metabolic segment, which accounts for 53% of our revenue. This market has bounced back with a 14.6% growth in quarter two, after having gone through a onetime correction of 4% growth in the preceding four quarters.
Eris has registered a Q2 growth of 21.8% in this segment, which is 720 basis points ahead of the market. In the last six quarters, our cardio-metabolic business has grown at a 12% CAGR compared to the market growth of 5%, once again, a lead of 700 basis points.
We expect that the cardio-metabolic market will be able to sustain a mid-to-early teen growth rate over the next three years with 5% to 6% growth coming in from new products, 4% to 5% growth coming in from price increases and 3% to 4% growth coming from volumes.
We expect that Eris will continue growing ahead of this market by a healthy margin on account of several exciting growth drivers, including patent expirations and new product opportunities in the DPP-4 and SGLT2 segments, growth from our insulin Glargine and GLP1 segments and patent expirations in the Heart Failure segment.
Secondly, let’s talk about our three emerging therapies, dermatology, CNS and women’s health, which collectively account for 21% of our total revenue. Our portfolio in these segments has achieved critical mass with combined annual revenue of INR420 crores as per AWACS.
This portfolio has registered a growth of 25.3% in quarter two of this year versus a market growth of 15.8%, which represents a lead of 950 basis points. Over the last six quarters, this portfolio has registered a CAGR of 25% versus the market growth of 14%. This represents a lead of 1,100 basis points.
We expect that Eris will continue growing ahead of the market by a meaningful margin on account of several growth drivers, including new launches in dermatology and cosmetology; secondly, a force multiplying effect that is in play in the women’s health therapy with more than 470 reps in the market across two divisions in Eris, as well as Oaknet; expansion of specialist coverage across the board; and potential inorganic opportunities.
Zomelis, our Vildagliptin Mother Brand Group continues to sustain its growth trajectory with a monthly run rate of INR9.3 crores in September. This represents an increase of INR1 crore in monthly run rate from the June figure of INR8.3 crores. With this, the Zomelis Mother Brand has grown 9x, 9 fold, in less than three years from acquisition.
In yet another milestone, Gluxit, our Dapagliflozin Mother Brand Group has achieved a monthly run rate of INR5.1 crores in September ’22 [Phonetic], which represents an increase of INR1.2 crores in monthly run rate from the June figure of INR3.9 crores.
Key new products launched in this quarter include Glura, which is our brand of Sitagliptin; Gluxit S, which is a combination of Dapagliflozin and Sitagliptin; and Raricap FCM in the women’s health therapy for the treatment of iron deficient anemia. We have an interesting set of new product launches coming up in Q3 as well, including Xglar [Phonetic], which is our brand of Glargine in-licensed from Biocon this month.
Coming to the financials. Our stand-alone operating revenue amounted to INR355 crores this quarter, which represents a growth of 10% year-on-year. The stand-alone operating revenue for the first half of this year stood at INR684 crores, which is a growth of 9%.
Our stand-alone gross margin in Q2 stood at 80.2% versus 82% last quarter, which is down by 180 basis points owing to a higher incidence of new products this quarter. The impact of industry-wide raw material cost escalation in our portfolio continues to remain minimal.
With the addition of nearly 200 MRs since the start of the year, our stand-alone YPM stood at INR5.3 lakhs this quarter, up from INR5 lakhs last quarter.
Stand-alone EBITDA for the quarter stood at INR141 crores, which represents an EBITDA margin of 39.7% versus 38.4% in quarter one.
Stand-alone net profit for the quarter stood at INR115 crores, which represents a profit after-tax margin of 32.4%, and this includes Oaknet related impact on treasury income and finance costs.
Our consolidated operating revenue for the quarter was INR461 crores, which represents a growth of 28% year-on-year. The consolidated operating revenue for the first half of this year grew by 21% to INR859 crores.
Consolidated EBITDA for the quarter stood at INR151 crores, and EBITDA margin stood at 33%. Consolidated profit after tax for the quarter stood at INR119 crores, which represents a margin of 26%. This is inclusive of all Oaknet related impact on depreciation, treasury income and finance costs.
The overall margin profile for the first half of this year is in line with our expectations given that FY ’23 is a year of unprecedented investments, including the launch of our insulin business, the amalgamation of Oaknet acquisition, addition of a field force of 200 people, launch of significant new products across therapies and commissioning of a new manufacturing facility in Gujarat.
Our Gujarat facility is on track to commence commercial operations in January of this — January of 2023. The total capex outlay for the facility is to the tune of INR170 crores to INR180 crores, of which INR150 crores has been invested till date.
Inclusive of Oaknet, we are targeting a consolidated revenue growth of 30% and a consolidated EBITDA growth of 16% to 17% in this financial year.
These were the highlights for the quarter. We are now happy to open up for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha — Macquarie — Analyst
Hi. Thanks for taking my question. Just a couple of questions. One, the logistics question on the depreciation and amortization, which has increased by roughly INR5crores, INR6 crores this quarter on a sequential basis. Is this the sustainable run rate given now we will have Oaknet amortization included?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
The second quarter represents the full impact because what happens is the Oaknet acquisition cost of INR650 crores, right, so that is getting amortized over 20 years. So INR30 crores per year is the rough depreciation and amortization expense from Oaknet alone. And the full impact of that is taken in quarter two. So I would say the answer to your question is yes.
Kunal Dhamesha — Macquarie — Analyst
And secondly, within our, let’s say, anti-diabetic pie, what would be right now, sulfonylurea, DPP-4 and SGLT2? And how does that compare to, let’s say, overall Indian anti-diabetic — oral anti-diabetic market?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
So for us, the presence of DPP-4 and SGLT2 is about 35% to 40%, right? For the IPM, this percentage is slightly higher because the IPM number includes the patented molecules as well. So the IPM number will include EMPA. It will include EMPA, LINA. It will also include a Sitagliptin patented. So for us this number from the new age molecules is higher than many of our peers, but it is still catching up with the IPM.
Kunal Dhamesha — Macquarie — Analyst
Right. And when I look at the stand-alone growth, which is like 10% year-on-year basis, right, for us, and if I look at some of the secondary sales number that you have put in, we are kind of growing faster than almost — in almost all the therapies that we are present. But then why would you say this not getting reflected in the primary number for us?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
So there are a couple of reasons for this Kunal. And I mean, you’re — I’m sure you understand that on a quarter-on-quarter basis, it is a little challenging to see parity between internal numbers and AWACS numbers. But when we have seen the average for the last four quarters or the last six quarters, then the difference narrows down quite a bit. You still have a 2%, 3% difference, but it is not as stark as what we see in quarter two. So we believe that this difference will iron itself out over a period of time.
There is also a second driver, and I think this is something that we’ll continue to see at least for the next three quarters, which is that there are quite a few products in the category, where there is some legal thing going on, where I don’t want to go into too much detail. But these are stocks that are lying in the market, which are selling. So these come into the secondary sales, but we don’t necessarily get any primary sales out of it. So this is also a contributing factor. So it is a mix of factors. But as I said, if you look at it over a long enough time frame, then these differences tend to iron themselves out.
Kunal Dhamesha — Macquarie — Analyst
Okay. But the secondary sales that are for those products would have come into the primary sales earlier, right?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Yeah. They did. But I mean they didn’t come in this quarter. So that is the challenge, right? You’re seeing a 10% primary and a 19% secondary in this quarter. So the difference is very stark, and that is where I understand this question comes from because thee 3%, 4% difference is something that you will have in every quarter.
Kunal Dhamesha — Macquarie — Analyst
Okay. So basically those are as of now discontinued products from your side?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
I wouldn’t say discontinued, but on hold pending resolution, I would say.
Kunal Dhamesha — Macquarie — Analyst
Okay. Sure. Thank you. Thank you for answering my questions.
Operator
Thank you. [Operator Instructions] The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane — Oswal Financial Services — Analyst
Yeah. Congrats on a good set of numbers. Just with the stand-alone level, as I see the year-on-year growth is still 10%, where the industry growth is little better than this. So that was one part.
And secondly, even the EBITDA margin is kind of slipping down from 41% to 39%. So if you could share a comment on where we lost it?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Sure. I mean on the stand-alone side, there are a couple of factors that will come into play, which are not visible yet. I think one is that both the quarter four of last year and quarter one of this year, they have been very busy quarters in terms of new product launches. But these launches will gain scale and they will gain momentum in the quarters to come. So that is one aspect that will start showing itself up in the stand-alone numbers going forward.
The second aspect is, corresponding to whatever inflationary trends that we are seeing, we have been allowed to take price increases starting April, but these price increases will also start manifesting themselves only in the second half of the year because unless we run out the existing stock in the market, the price increase effect also doesn’t come into play. So these two factors will start having a bearing on the stand-alone growth going forward. That is one part.
The second question was about the stand-alone EBITDA margin. So this is completely driven of COGS because every time we launch a new product it comes to us at a lower gross margin. So the corporate average gross margin, excluding the new products continues to be at around 83%, 84%, right? But when a new product comes in at a 70% gross margin, for example, it dilutes the COGS by 2% to 3% points for that quarter.
But when these products scale up, when we take the production in-house, we have seen that over a period of time, Zomelis, Gluxit, they’ve all followed this trajectory. So that is the reason why you see a dip in the gross margin, which is temporary, and that deep in the gross margin is reflected in the EBITDA margin.
Tushar Manudhane — Oswal Financial Services — Analyst
Sure, sir. Okay. Just lastly, while you relate to [Indecipherable] related price hike, I mean, looking further have a positive effect on the growth going forward, the kind of traction, which you are having on the — such as Zomelis and Gluxit set of products and despite that, if the year-on-year growth is so effectively 10% as I see on the stand-alone level. So somewhere in the base portfolio, are we seeing relatively lower traction and any particular comment out there and any specific effort to drive the growth in the base portfolio?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
See, the base portfolio anyway took a big hit with where the market was for the last four quarters, right? I mean, before Q2, we know that, and we have discussed it before and we’ve all speculated on the reasons as to why is the cardio-metabolic market growth down to 4%.
So I think there were a couple of things, right? One is that, before our three emerging therapies, derma, neuro and women’s health have scaled up, now they are like one-fifth [Phonetic] of our revenue, which is a good place for us to be in. But till not very long ago, our Company was basically being driven off two engines, basically diabetes and cardio. So our fortunes were totally tied to how these markets were behaving.
So the market in cardio-metabolic is just coming back now. We’ve had three months or four months of straight secular growth. And as we see when the market takes a beating, some of the brands take a disproportionate beating, that’s something that we’ve seen over a period of time.
So with the market correcting, I would say that most of the brands, I think products like Zomelis and Gluxit will continue growing at very fast rates, then we have products like Telmisartan, Olmesartan, Rosuvastatin, which will be in the 10% to 12% per annum growth category.
And then lastly, we have the sulfonylureas like — within Glimerpiride, we have Glimisave MV, which is growing very fast. But the traditional Glimerpiride plus metformin, that will be more like a 6% to 7% growth market. So going forward, that is the kind of numbers that we see.
So to the extent that we continue getting into more and more of the gliptins and the gliflozins, and there are heart failure products coming up starting January, the overall growth traction should improve.
Amit Bakshi — Chairman and Managing Director
Yeah. And also — Tushar — and also Tushar, the growth in this quarter from an AWACS point of view is distributed across. It is very difficult to choose. You look at it at any therapy, even at the brand level, the growth is quite secular this time. Though we believe that this could be a little bit of an exaggeration from a growth perspective. But as KK rightly said, three months is not a good time to look at. One month or three months is not a good time. We have seen over the years by the end of the year, it basically tapers down to a level, which is acceptable.
And then remember what KK told, we are — we will be having a 300 bps to 400 bps difference accounting to products, which we sell in — which sell in the market, but we don’t get any primary for [Phonetic]. This will continue till August next year. That is our clear cut understanding.
Tushar Manudhane — Oswal Financial Services — Analyst
Got it, sir. And just lastly on Oaknet, now that already in the sense one year ahead of reaching [Phonetic] the target of INR50 crore EBITDA. So if you could just further extend how do we see FY ’24, which is maybe like six months down the line. If you could further elaborate on the efforts to be taken on the FY ’24 and onwards EBITDA [Phonetic] for Oaknet acquisition.
Amit Bakshi — Chairman and Managing Director
Yeah. So Tushar, we are happy with Oaknet. You could imagine a lot of work wouldn’t have gone in two quarters or not even two quarters yet. So it is just the structural changes, which we have got at this point of time, which has given some kind of positive vibe. We are quite hopeful about this business. I think that our thesis for the business, as we are progressing is changing. So now we are thinking about a 30% range kind of EBITDA in the time to come.
So we have kind of upward revised our numbers both from the top line, as well as the bottom line because — and it will always happen, Tushar, because look INR3 lakh YPM is a very sensitive point or a sweet spot. You can choose to whatever you like. See because after INR3 lakh, whatever growth comes, most of it falls into EBITDA. So the journey from INR3 lakh to INR5 lakh YPM is always more accretive at the EBITDA level. So this being there will show higher EBITDA once the sales grow up.
Tushar Manudhane — Oswal Financial Services — Analyst
Understood, sir. Thanks and all the best.
Amit Bakshi — Chairman and Managing Director
Thank you.
Operator
Thank you. The next question is from the line of Mehul Sheth from Axis Capital. Please go ahead.
Mehul Sheth — Axis Capital — Analyst
Yes. Thank you for the opportunity [Phonetic]. One question on your cost part, right [Phonetic], your staff cost, if you see, it’s almost 50% up Y-o-Y, but on other expenses side it’s more of like a flattish number on a sequential basis as well. So what is the — can we consider this cost number to be — this quarterly run rate to be continued for [Indecipherable], which is it will be a basic quarterly run rate now?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Yeah. So this is the choice because I think even in the last quarter, Amit made this point that the kind of competition and the kind of competitive intensity that is being witnessed in the new launches at present, and specifically in the case of Sitagliptin, which happened a couple of months ago, we are not doing anything significantly out of the ordinary in terms of promotion for the new products. Right now, we are there in the market. We are participating in the market, and we are doing whatever it takes to be there, the bare basics.
The real competition and the real differentiation in the new products, whether it is a SITA or anything else, it will happen 9 months to 12 months later when the dust settles down. So it is a very conscious call that we decided to keep the other expenses at the same level on a linear basis.
So I think for the remainder of the year as well, going to the second half of your question, we will broadly be in the overall numbers that we have indicated. So we’ve indicated that, thanks to all the investments happening this year, we’ll be in the EBITDA margin range of 32% to 33%. And we expect that, that is where we will end up at.
Mehul Sheth — Axis Capital — Analyst
Also just one question on your — you have mentioned a product on hold — basically we…
Operator
Sorry to interrupt, sir, your voice is not very clear. If you’re using earphones, can you speak through the handset mode?
Mehul Sheth — Axis Capital — Analyst
Yes. Now is it clear? Hello?
Operator
Okay. Be a bit louder when you ask a question.
Mehul Sheth — Axis Capital — Analyst
Yeah. Just one question was on your MR productivity on consolidated level. So you have mentioned about stand-alone, but what it would be at consol level?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Yeah. So we don’t necessarily track this at consol level, so we can get back to you. But Amit just — so the two biggest entities are Eris Lifesciences and Oaknet Healthcare. And Eris is at INR5.3 lakh, and Amit just mentioned that Oaknet is in the INR3 lakh to INR3.5 lakh zone. So we expect that by the end of the year, Oaknet will get into a better zone in terms of run rate. So the average at the consol level, it will be somewhere in between the two numbers.
Mehul Sheth — Axis Capital — Analyst
Okay, sir. Thank you. Thank you. That’s what [Indecipherable]. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Sonal Gupta from L&T Mutual Fund. Please go ahead.
Sonal Gupta — L&T Mutual Fund — Analyst
Yeah. Hi. Thanks for taking the question. Good afternoon, good evening, everyone. So just on this — on Oaknet, I mean like we’ve — like you mentioned, you’ve done INR100 crores of revenue in 4.5 months. So should we expect that — and even you’re almost at INR23 crores of EBITDA and your EBITDA margin has gone to 24% this quarter. So I mean, like — but you’re still guiding for INR50 crores. So is there some one-off in this quarter? Or should we expect that there is a good likelihood that you’ll exceed the numbers?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
I think we’ll have to see how the next couple of quarters play out. I think we anchored it in the INR50 crore number because when we made the acquisition, we had given a guidance of INR50 crores in FY ’24. And so — I mean, there is more than enough line of sight to see that INR50 crores will happen in FY ’23 itself. So that’s the reason to pick that number. But in terms of how the next two quarters will pan out, as Amit said, we’ve been in the business only for four months or so. So I think we’ll be in a better position to answer this once we are through with quarter three.
Amit Bakshi — Chairman and Managing Director
Correct.
Sonal Gupta — L&T Mutual Fund — Analyst
Got it. And on the tax rate, is there some benefit of the Oaknet acquisition, which is depressing the tax rate this quarter? Could you just highlight?
Amit Bakshi — Chairman and Managing Director
No, no, tax rate — Oaknet EBITDA has been around INR16 crores, INR17 crores this quarter. But overall, if you see the tax impact, we have taken it as around 9% on an annual basis.
Sonal Gupta — L&T Mutual Fund — Analyst
So tax rate is 1%, right, consol?
Amit Bakshi — Chairman and Managing Director
9%.
Sonal Gupta — L&T Mutual Fund — Analyst
I mean, your tax…
Unidentified Speaker —
This is on the consol level — Sonal [Indecipherable] here, the consol level is just 1% of PBT.
Sonal Gupta — L&T Mutual Fund — Analyst
Yeah. So that’s what I’m asking it is that even…
Unidentified Speaker —
Comes to 9% [Phonetic].
Sonal Gupta — L&T Mutual Fund — Analyst
No. So I’m asking that this 1% on a full year basis this should revert to 9%, 10%, right?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Yeah. It is 9%. So if you take H1, right, you’ll see the number to be around 9%. So there were some higher tax provisions in the quarter one, which we have reversed. Overall, if you see H1, it will be 8% to 9%, and that’s where it will remain.
Sonal Gupta — L&T Mutual Fund — Analyst
Got it. And just in terms of like — when you’d originally guided for 30% growth for this year, you were expecting around 15% growth on an organic basis. So I mean, given what’s transpired in the first half, how do you see that target?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
So I think it depends on how Q3 pans out because we’ve only seen one quarter of revival, four months to be precise in the cardio-metabolic market, and that is what has led to a slight uptick in our expectation as well, which we’ve outlined in our investor presentation. So our expectation, as I highlighted in the earlier part of this call also, that we’ll get two effects flowing in, in the second half, one is the benefit of the price increases will become visible; and second is the benefits of the new product launches will also become visible, as the products scale up [Speech Overlap]. So yes, absolutely, it is expected that there will be some improved traction in the second half subject to the market continuing to support.
Sonal Gupta — L&T Mutual Fund — Analyst
Got it. And just a clarification on this price increase impact also, right? Like, I mean, if you’ve taken the price increases from April or even from June, the primary sales that you’ve done this quarter should reflect that benefit, right?
Amit Bakshi — Chairman and Managing Director
It doesn’t works out like that. It works out from the last year-to-date. So if the last price hike was taken, say, on a product last September, then you have to take it this September. So that’s how it works out. It doesn’t follows the calendar year or a financial year. It follows a 12-month period from the last increment, which you took. So that is why you see this lag.
Sonal Gupta — L&T Mutual Fund — Analyst
Okay. Yeah. That I understand. So are — your price hikes are more weighted towards the second half of the year, is it?
Amit Bakshi — Chairman and Managing Director
Correct. Absolutely. Absolutely. Absolutely.
Sonal Gupta — L&T Mutual Fund — Analyst
Got it. Okay. Great. Thank you so much.
Operator
Thank you. [Operator Instructions] The next question is from the line of Yash Tanna from ithought PMS. Please go ahead.
Yash Tanna — ithought PMS — Analyst
Hello?
Operator
Yash, your line is [Speech Overlap]. Yes, please.
Yash Tanna — ithought PMS — Analyst
Yeah. Am I audible now?
Operator
Yes.
Yash Tanna — ithought PMS — Analyst
Yeah. So good evening. My question was around Dydrogesterone that you’ve launched this quarter. So I think there are two or three big players, who already have a decent market share in this molecule. And maybe you can correct me if I’m wrong, but there are two or three players, who already have a very decent market share, and there are a few new players also who have entered this market. So on this particular molecule how do we see growth and how big is the market if you can just highlight on that part?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
So I’ll just answer the market part, and then I’ll invite Amit to share his insights as well. So the Dydro market is INR750 crores per annum now, and it is growing — still continues to grow at 45%, 50% per annum, which is a phenomenal market to be in because that’s been our thesis all along that let us participate in high-growth markets and let us try and take a disproportionate share of the incremental market that gets created. So INR750 crore market growing at 40%, 50% per annum means that, what, you have like a INR300 crores — INR250 crores, INR300 crores market getting created every year. So that’s like a new playing field for us.
In terms of what we are seeing on the ground on competitive intensity, etc, I would invite Amit to share his comments.
Amit Bakshi — Chairman and Managing Director
Yeah. So there is a little bit disadvantages we have because the price have crashed, not crash, it’s not the right word, the prices have come down in the last
Three months. And we are having an inventory, which will last us for at least four more months. So that is a small disadvantage of we not being able to participate in this price going down, at least for the next four months. It’s after, I think, December, January, we will be able to do the price again.
So I think we will be missing our target. We were thinking about INR30 crores by the end of the year, which I think now stands at around 25%, 26% in that range. But at the prescription level, we are doing fine. And Dydrogesterone is something, which we won’t miss in the gynecology therapeutics. So that’s where we stand at this point of time.
Yash Tanna — ithought PMS — Analyst
Right. Okay. Thanks. That’s helpful.
Operator
Thank you. [Operator Instructions] Next question is from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Kunal Dhamesha — Macquarie — Analyst
Thanks for the opportunity again. Just on the insulin franchise, so we have been in the market for now, I think, more than six months, right? So what has been the initial thought process? You kind of command 5% plus prescription share in the overall anti-diabetic market, but is it basically going to translate us for insulin franchise as well? Any thoughts on that could be useful.
Amit Bakshi — Chairman and Managing Director
Yeah. Kunal, good question, actually. We believe that we’ll end up this year at around INR18 crores. That’s what we think we’ll do INR18crores, INR20 crores this year. And this has all started from scratch. There’s no other product, which is there in the basket. We feel that INR18 crores or [Phonetic] INR20 crores is a good number for the first year. It’s all organic growth. It also applies the thesis again, that we think we will be profitable next year. Therefore, a good thing is you can still build a good business and make it profitable in one years’ time.
We are good with the insulin business as such, as I told you in the last call. Now, strategically, you have to wait it out for six months, nine months, so that the product becomes available. Availability in insulin is very, very important, and units of product, which is not available across because of the kind of requirement it has from the storage point of view.
But we are — I’m quite happy about this. And you will see a lot of traction building up in this business, as with the launch of Glargine, which is very contemporary. We are launching it just post Diwali. So that means starting on November. So that will get us to the second phase of growth in insulin. And so far, we have done well.
We will be a considerably good player in the insulin market. The quality has been appreciated. We’ve been around for some time now. We have thousands of patients on our insulins now. More than 23,000 [Phonetic] patients are taking our insulin. So we are working on it. I think we are on the right track.
Kunal Dhamesha — Macquarie — Analyst
Sir just a follow-up on that. If I look at our revenue and EBITDA on the insulin franchise, let’s say, roughly on a quarterly basis, so like making roughly INR8 crore kind of EBITDA loss, right? And — but let’s say, when you launch Glargine, do you see that there is an incremental launch costs, etc, coming in for Glargine?
Amit Bakshi — Chairman and Managing Director
Yeah. There will be incremental cost and there will be an incremental revenue also. So it’s not that we will be in this year coming into a positive zone at any point of time. So we have considered both these things. We have already burnt out almost INR10 crores.
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
10 crores.
Amit Bakshi — Chairman and Managing Director
Yeah. We might burn out around INR8 more crores in this year, roughly, and reach an INR18 crores to INR20 crores of [Indecipherable] total sales. And we are quite sure that from next year, we are not burning any more.
Kunal Dhamesha — Macquarie — Analyst
Okay. Sure. Thank you.
Amit Bakshi — Chairman and Managing Director
Thank you.
Operator
Thank you. [Operator Instructions] We have a question from the line of Mahesh Vyas from UTI Mutual Fund. Please go ahead.
Mahesh Vyas — UTI Mutual Fund — Analyst
Yeah. Sir, just one question. What is the payback period we are expecting for this Oaknet acquisition?
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Yes. Hi, Mahesh, we don’t look at simple payback. We look at IRR on a investment when we go into it. So any investment that has a more than 30% IRR, we consider it as a good investment in our system. So I think with the Oaknet acquisition ramping up better than expected, I think all I can say is that the IRR of the deal will be far better than what we had expected going in.
Mahesh Vyas — UTI Mutual Fund — Analyst
Okay sir.
Operator
Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. V. Krishnakumar for closing comments.
Krishnakumar Vaidyanathan — Executive Director and Chief Operating Officer
Thank you all for your participation on the call. By way of summary, the Oaknet business acquired in May ’22 is emerging as a success story for us in value creation through M&A. Through the deployment of various execution and growth levers, we see this business delivering an EBITDA of INR50 crores this financial year, which is one full year ahead of expectation when we went into the deal.
As per AWACS, Eris has grown at 19.3% in quarter two versus the market growth of 13%. For the first half of this year, Eris has grown at 13.6% versus the market growth of 7.4%.
We have entered an era where we have clear visibility on secular growth in our Cardio-Metabolic segment and our three emerging therapies over the next three years. We will continue pursuing growth opportunities in these segments through multiple levers, including new products, expansion of doctor coverage and inorganic expansion.
Eris delivered a Q2 consolidated revenue of INR461 crores with an EBITDA of INR151 crores and a PAT of INR119 crores. For the first half of this year, Eris delivered a consolidated revenue of INR859 crores, EBITDA of INR281 crores and profit after tax of INR212 crores. For this financial year ’23, we are targeting a consol revenue growth of 30% and a consol EBITDA growth of 16% to 17%, including Oaknet.
Thank you. I wish all of you and your loved ones a safe and Happy Diwali.
Operator
[Operator Closing Remarks]