JB Chemicals & Pharmaceuticals Limited (NSE: JBCHEPHARM) Q2 2025 Earnings Call dated Nov. 07, 2024
Corporate Participants:
Jason D’Souza — Executive Vice President
Nikhil Chopra — Chief Executive Officer and Whole-Time Director
Narayan Saraf — Chief Financial Officer
Kunal Khanna — President Operations
Analysts:
Amey Chalke — Analyst
Sumit Gupta — Analyst
Tausif Shaikh — Analyst
Rashmi Sancheti — Analyst
Harith Mohammed — Analyst
Rahul Jeewani — Analyst
Unidentified Participant
Abdulkader Puranwala — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the J. B. Pharma’s Q2 FY ’25 Earnings Conference Call as on the 7th of November 2024. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Jason D’Souza, Executive Vice President at J. B. Pharma. Over to you, sir.
Jason D’Souza — Executive Vice President
Thank you, operator. Welcome to the earnings call of J. B. Pharma. We have with us today, Nikhil Chopra, CEO and Whole-Time Director; Kunal Khanna, President Operations; and Narayan Saraf, CFO at J. B. Pharma. Before we begin, I would like to state that some of the statements in today’s discussions may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available in the Q2 FY ’25 results presentation that has been sent to you earlier. I would like to hand over the floor to Mr. Nikhil Chopra to begin the proceedings of the call and for his opening remarks. Over to you, sir.
Nikhil Chopra — Chief Executive Officer and Whole-Time Director
Thank you, Jason, and a warm welcome to all of you. Thank you for being with us today. I will commence with my thoughts on our Q2 performance. J. B. Pharma has maintained its pace of performance with INR1,000 crores revenues are being delivered yet again in quarter two FY ’25. Our gross margins have held steady at 66.2%, whereas our operating EBITDA margins came in at 28.4 percentage. The operating EBITDA stood at 13% higher at INR285 crores, while net profit increased by 16% to INR175 crores. I’m pleased to share that our domestic business has continued to around 59% of the overall turnover during H1. Related to 55% during H1 FY ’24. This is a representative of the consistent momentum in our brand portfolios. We have created leadership positions in the select entities where we operate and continue in turn to affirm those categories. Let me cover this in some details for all of you. The domestic business delivered 22% growth year-on-year to INR588 crores for quarter two FY ’25. Excluding ophthalmology, we have increased the business by 12% growth year-on-year from here. We have continued of delivering ahead of market as per IQVIA MAT December ’24. J. B. Pharma has shown 11% growth versus IPM growth of 7.6%. Each of our big brands has witnessed healthy gains. Presently, all our top five brands are among the top 150 in the country.
We are within the top 10 players in the cardiology market, whereas we have jumped ranks from 15 as per MAT September ’21 to now eight in MAT’s mid September ’24 in the cardiology market. Azmarda and have contributed here along with the Cilacar and Nicardia franchises. Next, let me expand on our acquired portfolio performance. Azmarda has delivered sales of INR67 crores as per IQVIA MAT September ’24, post-LOE. And this trend is only likely to improve with Sacubitril, Valsartan market growing at a 15% to 20% CAGR for the foreseeable next five years. Razel franchise has given a strong 28% year-on-year growth as per IQVIA MAT September ’24. Sporlac franchise reported a revenue of INR137 crores as per IQVIA MAT September ’24, growing at a 29% CAGR since INR83 crores as per IQVIA MAT September ’22. So from INR86 crores in September ’22 MAT today we are INR137 crores, September ’24 MAT for Sporlac franchise. Our Nicardia portfolio has achieved some notable trends with pediatric syrup formulation becoming a INR24 crore brand.
Ophthalmology has been well integrated in January ’24 and have grown 19% in quarter two FY ’25 related to quarter one FY ’25 as per IQVIA data. Coming to our international operations. Our international business revenue has grown at 3% to INR413 crores. Both South Africa and the U.S. business has recorded double-digit growth. Even our Russia and branded generic business in ROW markets had a high single-digit performance. Our CDMO business remained muted for H1 FY ’25 and is expected to recover in H2 FY ’25. CDMO sales, that is USD two million got deferred to Q3 FY ’25 due to material availability challenges, which further impacted our quarter two FY ’25 performance. As a result, CMO is expected to report a strong number for Q3 FY ’25. We have a robust order book for Q3 and Q4 FY ’25.
We are maintaining our margins up 26% to 28% despite the uncertainties in the market where we operate. Cost optimization is a key focus area for us. Looking ahead, we anticipate our domestic business to continue to outgrow the market on the back of our brand focus and market share gains. The thrust on chronic and high-growth portfolios will also contribute strongly to this performance for the coming time. We expect our CDMO business to show a strong trend in H2, as mentioned earlier, and on the back of new launches, new punters and expansion into new geographies across the globe. We are building a strong business that continues to deliver operating processes and strong brands. With that, I wish to conclude my opening comments and request our CFO, Mr. Narayan continue with his comments. Over to you, Narayan.
Narayan Saraf — Chief Financial Officer
Thank you, Nikhil. Good afternoon, everyone, and welcome to our Q2 earnings call. I will now take you through the financial highlights for Q2 FY ’25. Revenues for the quarter were at INR1,001 crores, representing an increase of 13% year-on-year. The domestic international business, which was 39 and 41 percentage, respectively. The domestic business reported revenues of INR588 crores with a growth of 22% year-on-year. Not including the ophthalmology portfolio, the domestic business reported a 12.6% year-on-year growth. As per IQVIA MAT September ’24 data within the IPM, the company outperformed with a growth of 11% versus IPM growth of 7.6 percentage. The international business saw moderate growth of 3% year-on-year at INR413 crores.
Gross profit margin for the quarter stood at 66.2 percentage grew by 13%. Excluding ophthalmology portfolio, which currently has limited margin, gross margin improved by more than 150 basis points year-on-year. However, cost optimization efforts, favorable product mix and price growth aided margin. Operating EBITDA, excluding ESOP cost stood at INR285 crores, with growth of 13% year-on-year. The margins were at 28.4 percentage in Q2 FY ’25. On the expenses, overhead eluding employee costs was contained, which also aided operating margin. Finance costs reduced from INR10 crores in Q2 FY ’24 to INR two crores due to decrease in gross debt. MTM ForEx impact of INR four crores was recorded in Q2, primarily due to depreciation in currency. The company’s operating cash flow in H1 were at INR380 crores as against INR421 crores in H1 FY ’24. Cash tax has increased by INR24 crores due to increased taxable profit and lower accumulation of deferred tax liabilities. The company held inventory because of anticipated EPA costs and ophthalmology inventory.
The company’s gross debt as of 30th September 2024, was at INR82 crores versus INR358 crores as on 31st March 2024. Net capex addition for H1 FY ’25 was INR53 crores versus INR93 crores in H1 FY ’24. We reiterate our guidance for operating margins between 26 to 28 percentage. We remain confident on positive outlook through opportunities for the company and providing value to our stakeholders. That brings me to the end of my opening remarks. I now request the moderator to open the forum for the question-and-answer session. Thank you.
Questions and Answers:
Operator
[Operator Instructions] The first question is from the line of Amey from JM Financial. Please go-ahead.
Amey Chalke
Hi, thank you for the opportunity. Am I audible?
Nikhil Chopra
Yes. Hi.
Amey Chalke
Two questions from my side. First, given our capacity expansion in our for the the CDMO business, how do we see this business growing in the future? And what will be the key potential for this?
Nikhil Chopra
So Amey, earlier I’ve also in my earlier comment also what we have projected, if you look at medium to long term, this business, which is now close to $50 million, we want to take it to $100 million in three to five years. But in short to medium term, probably what I comment we have shared in H2, you should see business ramping up because a couple of million dollars in quarter three because of the material availability. There are lot many of new projects that we have put in place, new drug delivery, newer geographies, newer partners, newer category of engines, all these are in place. We’ll be more than happy to share the details as and when we are ready to share that. But overall, the momentum that we see in this business is up north. And our guidance in terms of the business that we want to take it to $100 million still stands as is.
Amey Chalke
Okay. Understood. And second question, is it possible to provide the constant currency growth for the International business segments?
Narayan Saraf
We’ll get back to you. We have not seen the constant currency growth. We don’t have the numbers handy right now.
Operator
The next question comes from the line of Sumit Gupta from Centrum. Please go-ahead.
Sumit Gupta
Thank you for the opportunity. Am I audible?
Nikhil Chopra
Your audible you can be a little bit because my voice is too loud act merger. No fine. Go-ahead, answer the ask the question.
Sumit Gupta
Yes okay. So sir, I have two questions. So first is on the Azmarda. So what kind of potential do you see in Azmarda and what kind of growth rates, can you reiterate that?
Nikhil Chopra
So the Azmarda growth rate in the future, we project growth at 15% to 20%. There is a huge potential in the heart failure market as we maintained earlier, also close to more than 10 million patients, less than 20% diagnosis, the adoption continues to be extremely high for this product. In the last call also we mentioned that our first goal was that consolidation happens, and we maintain a run rate of 125,000 units, which is close to INR six crores monthly value. We are there. We are consistently tracking at that mark, and we continue to maintain a very positive momentum for this particular molecule. It will grow at 15% to 20% from hereon.
Sumit Gupta
Okay. So the demand is like how much? So last quarter, you mentioned at around 125,000 units. So is it a steady? Or like how is it…
Kunal Khanna
So quarter-on-quarter, we expect close to 5,000 to 7,000 units. So what we are expecting is by the end of this financial year, we’ll be close to 140,000 to 145,000 units and from thereon, we should expect close to mid-teens growth for this particular molecule.
Sumit Gupta
Understood. And sir, lastly, on the hitting EBITDA for first half, you delivered around 29% nearly. And the guidance is still maintained at 26 to 28. So what will be likely led to a moderation in the margin in second half?
Kunal Khanna
We maintain our guidance. We will — our endeavor is to be on the higher range of the guidance given. While we have delivered that, we are also mindful that Q4 India business in March because of inventory normalization, there is a marginal impact. But having said that, we are fairly confident that we should be at the higher range of the guidance given.
Operator
The next question is from the line of Tausif from BNP Paribas Exane Research. Please go-ahead.
Tausif Shaikh
Good afternoon. Am I audible? Thanks for the opportunity and congrats on a good set of numbers. My first question is on India business. Can you provide the price and volume breakup for this quarter?
Nikhil Chopra
Yes. So the volume growth was in the range of around 5% and the price growth was also in the range of around 6% for the quarter.
Tausif Shaikh
Second question of CDMO partners. Do you expect this raw material issue to get resolved in coming quarters?
Nikhil Chopra
Yes. That is what I shared in my commentary that already this material availability issue has been resolved and a couple of million dollar order, which has been differed in quarter three will be that will be taken.
Tausif Shaikh
Okay. Sir, last question in last four to five years on a top brand, I mean, what kind of volume growth we have witnessed?
Kunal Khanna
Volume growth has been consistently close to 6% plus Even if we compare our volume growth of late in quarter two, we have registered 5% versus IPM of less than 1.5%. And that’s what we have always maintained that we’ll try to maintain an incremental 3% to 4% as far as volume growth in the IPM is concerned, and we continue to trend along. So just to clarify, the volume and price growth, which was given was excluding opthal portfolio. So we clocked organically 13%, and that was the breakup of volume and price in that.
Tausif Shaikh
And if I’m right, we have launched seven extension, right, for the existing products in the last four to five years?
Kunal Khanna
Yes. Life cycle management has been very critical to our overall growth strategy for the large brands. So big brands like Metrogyl have now extensions like Metrogyl ER, Arantech OD, Sporlac, which we acquired. We did significant incremental innovation. So now we have other variants in the form of GG, Sporlac GG. There are other various forms of probiotic which we are looking at. So LCM has been very core and critical to our overall strategy of organic and acquired portfolio.
Operator
The next question is from the line of Rashmi S. from Dolat Capital. Please go-ahead.
Rashmi Sancheti
Yes. Thanks for the opportunity. You know, my call was dropped. So I think I have missed that comment. You mentioned — did you mention the reason for the nonavailability of the raw materials in the CDMO segment? Was it related to changing any particular vendor because of which it got delayed? Or do you have any specific reason for it?
Kunal Khanna
No, no. This is not related to any change in vendor, nothing of concern, just specific excipients got delayed. Some of these excipients because it’s a very unique and differentiated product come from regulated markets, and there was just a slight delay. So nothing of concern. Overall, we see a very strong traction for our CDMO business in H2, and some of the supply challenges will also resolved.
Rashmi Sancheti
Okay. So if you expect that growth would come back in H2 and the fourth to half we have seen a decline. So can we expect that for this entire year at least we would close flattish over FY ’24?
Kunal Khanna
Yes, that’s a fair assumption. In fact, CDMO business for H2 will be in very high double-digit growth rate up to 20% plus. So we don’t expect any further impact on this business. We are seeing a healthy traction, and it should be as suggested.
Rashmi Sancheti
Okay. And can you quantify like how much sales in this quarter was deferred to quarter three in this PMO part only?
Nikhil Chopra
You missed what I gave me. It was a couple of million dollars.
Rashmi Sancheti
Couple of million dollars. Okay. Okay. And in the domestic business, we are seeing Razel franchises showing a very strong growth. Anticipating that this franchise will more or less be in line with the market. And it is outperforming both statins market and the rosuvastatin market. So what are the initiatives which you have taken which is leading to this kind of growth? And what do you expect that whether the growth will get normalized or it will continue in this way?
Kunal Khanna
See, the good thing is we are in a progressive market. If you just look at the numbers of plan and combination as reflected in IQVIA, our plain has grown at 30% plus for Q2, the market is still 20, and our combinations are also growing at 20% plus, which is higher than market. It’s a very focused strategy, which we have. This brand was part of our other second main chronic team where Nicardia was being promoted. We have good space in kind of ensuring that this brand gets P1 priority. And given the expansion of cardiologists and consulting physician in the prescriber base, we have been able to get strong results for this.
Rashmi Sancheti
Okay. But any field force, any dedicated field force for this particular franchisee you have added or it is the same?
Kunal Khanna
It was part of our main second flagship chronic team, which was promoting Nicardia. In that particular team, this gets priority one positioning.
Rashmi Sancheti
Okay. Got it. Got it. And one question on capex. What is the guidance for this year and the allocation for it, like if there is any growth capex planned because your ophthalmology product would finally come in with the company from FY ’27 FY ’28. So any plans for that? So if you can give guidance on that?
Narayan Saraf
Yes. So in the second half, we are planning for another INR50 crores, INR55-odd crores of capex. So totaling this year, we would be investing INR100-plus crores of capex. And obviously, we will keep on investing behind — besides maintenance or even growth capex and supporting for our growth endeavor our future of the business. So we have plans to invest in machineries, which will support our IVF portfolio, which will support our business.
Nikhil Chopra
So every year or every year capex, it is close INR100 crores to INR120 crores. You should assume 15% 20% is a growth capex.
Rashmi Sancheti
15% to 20%. Okay, okay. And one last question, $160 million, which we will be paying before December ’26. That will be entirely paid through the internal accruals or we are going to because we have already repaid the debt, but are we going to add the debt in FY ’27 or we will be utilizing it through internal cash only?
Narayan Saraf
As of now, the intent is that we want to pay it off on the internal accruals also only because we would have enough funds to pay off the loan at that point of time.
Operator
The next question is from the line of Harith Ahamed from Avendus Spark. Please go-ahead.
Harith Mohammed
Good afternoon. Thanks for the opportunity. On the ophthalmology portfolio, I think we can calculate revenues around INR90 crores in the first half. So can you share some color on the kind of growth that you’ve seen in this portfolio? And if you can also talk about some of the changes that we’ve brought in after licensing these brands and including the addition of MRs. So any comment there would be helpful.
Kunal Khanna
Purely from a number standpoint, when we acquired this portfolio, the steady-state run rate of the acquired portfolio in the previous organization was close to INR40 crores. In H1, we had started seeing good growth ends and we were closer to INR44 crores to INR45 crores and now we have close to INR48 crores running per quarter. So we are well aligned to our overall objective of clocking close to INR185 crores to INR190 crores for this portfolio. We have seen very strong secondary traction. If you look at the recent numbers for this quarter, given the external market reflection is showing close to 18% to 19% growth, our objectives of expanding the prescriber base has started yielding us results.
So when we took this portfolio under this team, they were close to 7,000 ophthalmologists, which were being covered. We have expanded the team. We took it from 65 to closer to 105, and we are right now covering close to 13,500 ophthalmologists, which in the near future, in the next 12 months that prescriber coverage will also expand to 16,000 to 17,000. So every quarter, we are seeing good sequential growth and with strong secondary trends. We remain extremely confident and optimistic about this.
Nikhil Chopra
So a couple of points I would like to add. If you see our presence during the opthal business, where we are doing around INR47 crores to INR48 crores revenue every quarter. Our major presence in newer of glaucoma pain and the allergic antibiotic. And last month only, we have launched a new product from J. B. House, which is sodium. So you will continue to see every three months on point that we continue to be — we’ll be launching in this portfolio in terms of what are the net rates in this market with now the right coverage 100-plus people working in this team, we have enough space in terms of we can target newer categories.
Harith Mohammed
Okay. And then my second question is on your mature franchises, and I’m referring to Rantac and Metrogyl. So obviously, growth has — we see a slower growth versus the rest of the portfolio. But going forward, how should we think about these two large franchises because continue to account for a single share of the overall sales. So are we expecting these two deliver growth going forward? Or should we expect a fairly flattish kind of profile?
Nikhil Chopra
So the good news was that in first six months of the year, let me talk us about Metrogyl. Metrogyl, this year has demonstrated high single-digit growth because of the better uptake in terms of prescriptions. And many of the progressive SKUs within Metrogyl franchisee, there was good uptake in the prescriptions. And same hold true for many of the franchises within Rantac, but some other brand in Rantac is flat in volume, which we should assume it should be flat in volume. But there are other SKUs within Rantac franchisees, which are showing a good double-digit growth. So basically low single-digit growth, what you should expect for Rantac franchise and Metrogyl probably this season has been good. So that demonstrated a high single-digit growth. But the focus is more on the progressive prescriptive SKUs within Rantac and Metrogyl franchises.
Operator
[Operator Instructions] We have the next question from the line of Rahul Jeewani from IIFL Securities Limited. Please go-ahead.
Rahul Jeewani
Yes. Yes. Hi, sir. Thanks for taking my question. Sir, on the Cilacar portfolio, obviously, we have seen very good growth over the past few years. But if you look at this franchise now, this franchise is almost INR700 crore franchise for us as per IQVIA data. So what kind of growth do you see in this franchise going forward? And what would be the drivers for the same? So do you see any — any doctor coverage gaps as far as the the cardiologist or the channel is concerned for Cilacar?
Nikhil Chopra
So first of all, Rahul, there is no doctor coverage gap. Basically you have bifurcated that our focus on this case the focus continues to be on plain field, which is a starting prescription for newly diagnosed happens patients with compromised renal function, that is point number one. Point number two is the way we have segmented Cilacar-T as a product for patients, who are suffering from comorbid conditions of diabetes with hypertension. That is where the focus continues to be there. And equally, there are other two franchises where we are focusing, which is a combination Cilnidipine metoprolol and equally Cilnidipine telmisartan metoprolol and cilnidipine telmisartan and chlorthalidone. These are five SKUs within Cilacar franchises, which will continue to — which will continue to show a good growth.
So when we see this market is not only in terms of revenue or what every month, that is what we are generating. But we more look at it in terms of the burden of disease. If you look at in a country like India, 100 million-plus people suffer from hypertension and one important is undiagnosed. So we have basically put the entire positioning of segmentation, targeting and positioning for our different SKUs to different specialty for different indications. So we see to be very bullish in terms of what we can do with Cilacar franchisees and targeting more from looking at how to reduce the burden of disease. So equally, J. B. being a responsible company, we are closely working with all the specialties be it cardiologists, nephrologists, endocrinologists, medicine, not only going and promoting the product in the clinical doctors, also helping in dissemination of knowledge where we are also working closely with many of the societies like Cardiology Society of India, also Association of Nephrologist, equally MD medicines in terms of what new guidelines can come in place and help in dissemination of knowledge all across, which will help not only in terms of patients being diagnosed early and being given the right treatment for the right ailment that they are suffering.
Rahul Jeewani
Sure, sir. And sir, on this growth which we have seen for Cilacar and Cilacar-T, which has been around, let’s say, 22%, 28% CAGR for past 3-year period. Can you call out the volume growth for both these brands, specifically over the past three years?
Nikhil Chopra
The volume growth continues to be between 12% to 14% for Cilacar and Cilacar-T.
Rahul Jeewani
Okay. So 12% to 14% is still being driven by volume growth?
Nikhil Chopra
Yes.
Rahul Jeewani
Sure, sir. And sir, the second question which I have is on the export business. Now if we see on the export formulation, this quarter, we saw a growth pickup happening because of the fact that the rationalization of the South Africa tender business is now in the base quarter as well. So given that the impact of South Africa tender rationalization in the base, so what kind of growth are you targeting in the export formulation business over the next two- to three-year period?
Nikhil Chopra
First of all, let us talk about current year. For current year, we are looking at this business — intentional business to grow double digits, and we should be closing the year high single digit for this business. That is where we stand. And South Africa, as you told, as you were — what you were talking about. Last five quarters, we have come out with the haircut that we have taken of INR150 crores this year — this quarter, we showed double digit growth, and this business will grow at double digits around 10%, 12%. FY ’27, you should see better traction in our ROW branded generic business, where we see some traction coming from new launches, which we have been filing.
Last year, this year, both put together, we should be able to — we would be filing around 20 new products. That should also contribute to the business growth for the business, which is once again approximately INR100 crores a quarter. So overall, because of this couple of million dollar business of CDMO getting deferred in quarter 3, that is why overall business, you saw muted growth of 3%, but we should close the business with high single-digit growth, mid double-digit growth happening in H2, and this business overall should go at around double digit in the coming time.
Rahul Jeewani
Sure, sir. And sir, last question from my end. So when the new management team had come in a JV, we had also expanded our R&D team in terms of a new R&D hires. But if we see the traction on the exports business in terms of new filings or even new ANDA filings for the U.S. business has been limited. So when do you see some of those R&D efforts translating into better growth for the international business?
Kunal Khanna
See, we have always maintained — there are two parts of our filing strategy. One is what we will do in our overall international ROW markets and a very selected stage-gate approach as far as the U.S. market is concerned, right? So with respect to the international rest-of-the-world markets, as Nikhil was saying, we’ve already done close to 20 development and filings. The benefits of that and this being international market from the time the dossier is prepared, filed and once you get regulatory approval, it’s to 20-month process.
So the first phase of 10 products, which we have filed, we should start seeing benefits and regulatory approvals coming for them somewhere in September, October of calendar year FY — or calendar year ’25, which means basically Q3, Q4 FY ’26. And for the other set of 10 products, you should start seeing incremental gains coming in FY ’27. So we are very confident that the first two phases of international filings of 20 products, we should start seeing incremental gains late FY ’26 and full realization in FY ’27. Coming to U.S., we have always maintained that it’s going to be close to three filings a year. We have, over the last two years, maintain that, and you should start seeing approvals also coming through in the next nine to 12 months.
Rahul Jeewani
Sure, sir. And just one follow-up on that. Can you split out this 20 filings across markets, if that is possible?
Nikhil Chopra
That is — we would not want kind of of give disclosures regarding that. That’s a very business-specific strategy, which we have for these products.
Operator
We have the next question from the line of Sami from Deseado Advisory. Please go-ahead Samya, your line has been unmuted. You may proceed with your question please try now.
Unidentified Participant
Sir, I wanted to ask the con call, you quoted for the new product launches in pediatrics, GI probiotics. So with an expected pace of one to two launches in every two months. So could you please provide an update on whether this guidance has been followed so far? Or if so, could you please share the details of the recent launches?
Nikhil Chopra
So first quarter that we had launched was this Rantac syrup, which is in the GI franchise also, which should clock around INR10 crores revenue for the year, almost six months — six months of the quarter year has happened. That is point number one. Equally a couple of launches that happened in the world of Sporlac franchise, it what I said earlier, that is Sporlac GG, a pediatric formulation of Sporlac and equally Sporlac EVA, which is here. Equally, in Metrogyl franchisees, we have launched Metrogyl DGLA gel, which is once again for dental health. You should see a couple of more launches happening probably we have also launched one eye drop that is sodium, which is in the market in the world of ophthalmology. You should — we have a very good iron supplement that is tablet, which is close to around INR15 crores, INR20 crores product. We are launching a syrup formulation in there. Equally, you should see probiotic for dental health, which should come in probably in the month of December and one or two more launches we should see in the month of October. So this trend will continue.
Unidentified Participant
So sir, what has been the outcome of this on the revenue has it impacted or not?
Nikhil Chopra
Yes. So what was shared earlier by Narayan, if you look at the volume growth, which was 5% and price growth was 6%. New products are contributing around 1.5% to 2% overall growth.
Operator
[Operator Instructions] The next question comes from the line of Sumit Gupta from Centrum. Please go-ahead.
Sumit Gupta
Thank you for the opportunity. Am I audible?Sir, two questions. First was on the product. How much is the MR base as of now?
Nikhil Chopra
Today, we have base of 2,300 including ophthalmology.
Sumit Gupta
Okay. So going forward, how do you see selling like MR products? Or do you plan to add new MRs?
Nikhil Chopra
No. So right now, we don’t have plans to add more MR. Like at least in next 12 to 18 months, there are no plan to add any MR. Today, our core activity stands this year is around INR seven lakh.
Sumit Gupta
Okay. And sir, secondly on the ESOP price. So do we still maintaine in FY ’25 full year, you will be doing sort of INR40 crores to INR45 crores?
Nikhil Chopra
ESOP cost?
Narayan Saraf
ESOP cost, of course, yes. So ESOP costs, we have incurred around INR14 crores this quarter. And yes, we expect it to be another INR25 crores to INR30-odd crores in the second half. And annually, it would be around INR45 crores.
Operator
[Operator Instructions]
Narayan Saraf
So we have one question come on the chart. So in terms of which some of the charts that operating cash flows have been a little soft in the first half. So the question is what is expected for EBITDA to operating cash flow conversion for the year?
Nikhil Chopra
Yes. So thanks for the question. So very clearly, we are very confident that our net operating cash for FY ’24 as a percentage of EBITDA will be 18% plus like previous years.
Narayan Saraf
You can take the next question.
Operator
The next question on the audio bridge is from the line of Abdulkader Puranwala from ICICI Securities. Please go-ahead.
Abdulkader Puranwala
Yes, hi, sir. Thank you for the opportunity. In terms of your MR productivity, so could you help us understand where is the scope for further improvement? Is that the new set of brands what you have launched in terms of the acquired brands or the line extensions where you believe the next set of productivity improvement would be driven?
Nikhil Chopra
All across. All across. If you look at what we are trying to in the world of technology, today our productivity is higher than where all India productivity. So that can also inch up as what you heard earlier, our volume growth in our base two franchisees is in big things. Equally, we see huge potential in terms of what we are trying to do in our acquired portfolio. New launches will continue to contribute to the growth, the productivity will inch up. And also, we have identified around 20 brands across company that is three brands in every business unit, which are the anchor brands, which will drive the productivity. So all across, we see productivity. Our productivity should grow around 10% to 12%.
Abdulkader Puranwala
Understood, sir. Second is on your broader aspiration to becoming the 15th largest company in the domestic pharma market. I mean while I understand that the bridge is quite significant, but would this be largely met again by more acquisitions or any particular area where you think you can create a sizable value for yourself?
Nikhil Chopra
So first of all, I don’t know from where is this coming that we want to become the 15th largest company. Today, we are 22nd by value and 16th by prescription. If you ask aspirations, we want to be — we want to inch up in terms of of where we want to be in terms of prescription. We want to be in top 10, by the way, in terms of prescription. Today, we are 16th ranked. So that is what is in our head. And what was shared earlier, we’ll continue to deliver better performance as compared to market. Market will grow at around 8% to 10%, and we should do better than the market. So very difficult to say in terms of gaining events, we are happy where we are today. But we would like to increase our ranking in the prescriptions, all our big brands, Rantac, Metrogyl, Sporlac, Razel, all those will contribute over a period of time to improve our prescription ranking.
Abdulkader Puranwala
Understood, sir. Sir, final one on your CDMO business. So why I understand that there was a certain disruption in the first half and the second half will be a little stronger, but I think we have previously guided that in the long term, we aspire just to come like $100 million of kind of business segment for us. So I mean, are we still retaining this guidance? Or you’d like update that on…
Nikhil Chopra
Was that this question was asked earlier, but let me once again share with you in terms of our aspiration to be $100 million starts with that we are trying to expand in newer geography, which is a combination of getting into Brazil market, getting into Europe market, getting into U.S. market, these are that we are attempting, which will happen probably in medium equally getting into a newer category of, which we have been talking next year. Obviously, what we have been talking about getting to, which are mandatory as which would happen next year. We have been talking about them into immunity and wellness sausages, which are already there in our European market, it will — in three European countries, probably next on it will be available Pan Europe and other more countries.
Also, you should see us getting into new dosage of drug delivery, be it the culmination of stick pack, spray, newer partners that we are trying to get into across the globe. So all these are in place. And what earlier was shared that the aspiration to be a $100 million company in CDMO stands as is with the right partners that we have bought and equal capacity that we have bought of two billion which can happen in three years, which can happen in five years in the coming time.
Operator
[Operator Instructions]
Narayan Saraf
So there’s another question on chat. So the question — there are two questions. One is how do we see the performance of the India business in the second half of the year? And how has the performance been of the probiotic business in the first half of this year?
Nikhil Chopra
So what was shared earlier that Sporlac as a franchise when we acquired was INR83 crores a couple of years ago, today, it is INR137 crores as reported in IQVIA MAT. And what we have done is done a life cycle management and better distribution and representation of our people in the clinic with Sporlac franchise. And we are very bullish on this. This is a INR2,000 crore market. Still we are scratching the surface, huge opportunity in terms of what we can do with this franchise. So this is a six brand that you at some on time, we’ll see will be in top 300 from JV.
And overall, when we look at India business, we’ll continue to deliver market bidding performance, which we have been doing for last now three consistent years. Because of overall industry practice, you may see a margin and happening in quarter 4, but then also it will be acquired to the market delivery. But this business will deliver a good healthy 12% to 14% growth for H2.
Operator
We have a follow-up question from the line of Rahul Jeewani from IIFL Securities Limited. Please go-ahead.
Rahul Jeewani
Yes. Thanks for taking my follow-up. So sir, did I hear you correctly that the capex investments, which have slightly increased, there’s all investments into the IVF segment?
Kunal Khanna
Rahul, no, it’s not ideal. It’s basically injectable IV products. Injectables for our Rest of the World markets, it’s basically for our export markets. So from a greenfield perspective, what Nikhil and Narayan was mentioning, there are two key dosage forms at least here this year. One, we are investing in throat spray, and the other is expansion in the products.
Rahul Jeewani
Sure, sir. And what is the current contribution for, let’s say, these new dosage forms in the international business?
Kunal Khanna
The throat spray is essentially something which we are going to be doing for the first time. It’s largely for our CDMO business with our main principal partner. And as far as IV products go, why we would not want to disclose from a value perspective, just to give you a sense, we do close to — we have a capacity of close to 54 lakhs units per month. That is something which we are expanding to 75 lakh to 78 lakhs units per month.
Rahul Jeewani
This is for the injectable products?
Nikhil Chopra
Injectables, yes.
Operator
We have another question from the line of Sumit Gupta from Centrum. Please go-ahead.
Sumit Gupta
Sir, I just wanted to understand the just the Metrogyl and So when do you expect it to enter the market?
Nikhil Chopra
Sorry, you’re talking about?
Sumit Gupta
Yes.
Nikhil Chopra
So that would be — that is what I shared. That will be over in some markets outside India probably next year.
Sumit Gupta
Okay. Okay. Understood. And for?
Nikhil Chopra
Which one?
Sumit Gupta
Probably you should see that happening probably end of next year starting FY ’27…
Operator
Ladies and gentlemen, that was the last question. I would now like to hand the conference over to the management for closing comments. Over to you, sir.
Nikhil Chopra
Thank you all for participating in today’s call. I think the last two quarters, we’ve been — we’ve been delivering INR1,000 crores plus revenue every quarter. And our EBITDA margin stands to around 28%. And we are confident that we end the year on a higher note, which is backed by what we are trying to do in India business, which is growing better than the market. Equally, you should see some traction coming back in our CDMO business. And we are all there in the company in terms of how we can chart our future and remain focus on making the organization both progressing in future-ready and create value for our shareholders. And equally look at how — what more we can do to improve the quality of life of patients across the globe. Thank you. Thank you all.
Operator
[Operator Closing Remarks]