JB Chemicals & Pharmaceuticals Limited (NSE:JBCHEPHARM) Q3 FY23 Earnings Concall dated Feb. 09, 2023.
Corporate Participants:
Jason D’Souza — Vice President, Investor Relations
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Lakshay Kataria — Chief Financial Officer
Kunal Khanna — President, Operations
Analysts:
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
Sriraam Rathi — BNP Paribas — Analyst
Shrikant Akolkar — Asian Market Securities — Analyst
Alok Dalal — Jefferies India Private Limited — Analyst
Abdulkader Puranwala — Elara Capital — Analyst
Aarti Rao — Anand Rathi — Analyst
Cyndrella Carvalho — JM Financial Limited — Analyst
Alka Katiyar — Centrum Broking Limited — Analyst
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
Neelam Punjabi — Perpetuity Ventures LLP — Analyst
Unidentified Participant — — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to JB Pharma’s Q3 FY’23 Earnings Conference Call as on the 9th of February 2023. [Operator Instructions].
I now hand the conference over to Mr. Jason D’Souza, Vice-President at JB Pharma. Thank you, and over to you, sir.
Jason D’Souza — Vice President, Investor Relations
Thank you, Aman. Welcome to the Q3 earnings call of JB Pharma. We have with us today, Nikhil Chopra, CEO and Whole-Time Director; Mr. Kunal Khanna, President, Operations, and Mr. Lakshay Kataria, Chief Financial Officer.
Before we begin, I would like to state that some of the statements in today’s discussion may be forward-looking in nature and may involve certain risks and uncertainties. A detailed statement in this regard is available on the Q3 FY’23 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 for his opening remarks, and after that, Mr. Lakshay Kataria will address the financial highlights. Over to you sir.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Thank you, Jason, and good afternoon to everyone for joining us on our conference call. Plan to discuss the performance during quarter three, FY’23. I shall commence the remarks on the performance and provide updates on the business. I’ll be followed by our CFO, Lakshay Kataria, who will address the financial perspectives to you. After our remarks, we’ll take the queries from the participants.
Friends, I’m glad to share a solid performance backed up by expansion in both our domestic and international businesses. In quarter three, FY’23, we saw 32% increase in our revenues at INR793 crores. The domestic market saw market beating growth trends prevailing during the quarter, with the improvement of 42% year-on year witnessed in revenue at INR407crores. Organic growth came in at mid-teens, with JB, leading theindustry on the growth part. As per IQVIA data, we have emerged as a fastest-growing company in top 25 in year 2022. Thus, for the second consecutive calendar year, we have been the fastest-growing company in the industry in top 25. In the acquired portfolio, we have witnessed similar growth terms. We have shown pretty 34% growth in quarter three. FY’23 as per IQVIA data on like-to-like basis.
The Probiotic range continued to perform well and Sporlac witnessed good growth rates and is now ranked at 361 number. Azmarda, which is creating a niche for itself in the Cardiac segment, saw 50% growth in the quarter. As per MAT December 2022 data, Azmarda appeared in IPM in top 300 list as well, ranking at 270 number. The traction in this brand is healthy and we continue to bet the brand with the revised go-to-market model. We have announced a price reduction of 50% in Azmarda in December and are already beginning to see a good volume uptick post the price reduction. We have put in place a cost-effective sourcing model for Azmarda, which will focus on delivering high-quality product to the patients. Also, wanted to share the competitive intensity has significantly increased in the market for the [Indecipherable] combinations.
The quarter marked the acquisition of Razel, Rosuvastatin range, formulizing our entry into the Statin market, which is our largest segment within the cardiology segment. Razel ranks among the top 10 brands in Rosuvastatin molecule category, whereas Rosuvastatin and its combination have delivered three-year sales CAGR of 14%, as per IQVIA data. We are present in three major segments in cardiology segments, namely antihypertensive, which, where we lead with our brands Cilacar and Nicardia; Heart failure, where we have a Azmarda, has created a strong niche for itself, and now Statins, where we have recently acquired Razel. The combination of being present in all these segments has captured us into top 10 companies by sales in cardiology as per IQVIA MAT December 2022. I am also proud and happy to share with all of you that we are the fastest-growing company in cardiology segment among the top 10 players as per IQVIA MAT December 2022. This is indeed an achievement, considering the space is dominated by large pharma companies.
Moving on to our international business. Our international business recorded good performance overall. The business saw momentum continuing in each of the segments, whether it is CMO business, which delivered a robust set of numbers with revenues growing at 92% during the quarter, quarter three, FY’23 and we once again could achieve INR100 crore revenue for our CMO business.
New launches in specific markets are showing good progress. Export formulations delivered the highest-ever sales during the quarter. Rest of the world and U.S. saw, U.S. market showed much improvement in sales. Russia and CIS countries also witnessed enhanced traction on the revenues. In South Africa, our public business is witnessing some competitive pressures. Given the prevailing prevailing geopolitical scenarios and economic uncertainty, we expect to have some impact on the demand in South Africa market.
I shall draw your attention now to towards the outlook of the business for the coming quarters. In domestic business, we are aiming to grow ahead of market. That is what we have been we have been guiding since last six to eight quarters. This will be based on growth in our selected brands, where we are leaders in their respective categories and continued traction in our portfolio of acquired brands. In line with our revised go-to-market strategy, we are building in higher productivity of our MR teams on the ground. The outcomes are being tracked through high momentum in prescriptions. Also, what we have been talking in our earlier commentary, our new product contribution is also now close to 5% for the quarter, which is inching up as compared to when we were — when we started our journey in October 2020, the contribution was only 1.5%. This all shows overall, the strength now, what JB enjoys in the market with the healthcare professionals, particularly for the new progressive portfolio. In our international business, we have sharp focus on driving the right market mix with our portfolio of offerings. Demand from export formulations, especially the ROW business remains good.
I have just come to the end of my note and would like to invite our CFO, Mr. Lakshay Kataria to share his views on the financial perspective. Over to you, Lakshay and thank you all for patient hearing.
Lakshay Kataria — Chief Financial Officer
Thank you. Thank you, Nikhil. A very good afternoon to all of you and welcome to our earnings call. I will now take you through the financial highlights of quarter three, FY’23. The revenue for the quarter was at INR793 crores, an overall growth of 32% over the same quarter FY’22. The mix of Domestic and International business stood at 51% to 49%. Our Domestic business reported a revenue of INR407 crores, a year-on year growth of 42%, and organically, the business saw growth in mid-teens. Our International business saw 23% growth year-on year and another quarter of INR385 crores of revenue. Performance in this business was particularly supported by International formulations and CMO business, along with strong performance in our Russia operations. Gross margins at 62.3% for the quarter, pretty much closer to where we were last quarter and compared to 65% in the last financial year. The margins saw an impact of cost inflation and higher Azmarda sales during the quarter.
During the quarter, we delivered an operating EBITDA, before ESOP cost of INR193 crores. We saw a growth of 26% year-on year. Margins came in at 24.3% versus 25.5% in the same quarter last year. During the quarter, other expenses as a percentage of sales improved versus last year to 22.8% vis-a-vis 24.5% last year.
As you would have seen, the depreciation during the quarter was higher as it includes the amortization charge of INR11 crores towards acquired brands. The amortization number will move-up marginally due to acquisition of Razel franchise towards end of quarter three. Profit-after-tax was at INR106 crores, which increased by 26% year-on-year.
Quickly covering the cash part. As of 31st December, we had a debt of INR571 crores and cash and investments to the tune of INR142 crores. This debt is after funding acquisitions of the Razel franchise. Our operating cash flows continue to be strong and in the recently concluded Board meeting, we declared an interim dividend of INR8.5 per share. Overall, we continue to remain optimistic about the business and we see operating leverage increasing for the business as we move forward.
With this, I now request the moderator to please open the forum for discussion and questions. Thank you.
Questions and Answers:
Operator
Thank you very much.[Operator Instructions]
First question is from the line of Rashmi Shetty from Dolat Capital. Please go-ahead.
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
Yeah. Thanks for the opportunity. Sir, first question on debt. This Razel acquisition amount has been completely funded by debt or it is partly funded by debt? If you can give that number. And what is the cost of debt also?
Lakshay Kataria — Chief Financial Officer
So, as far as Razel was concerned, we took further loan of INR250 crores towards this acquisition and the balance was funded, roughly about INR130 crores was funded through internal accruals. This is the total cost with all the applicable taxes and working capital. In terms of cost, it’s closer to 8.5%.
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
Okay. And now what maybe the blended cost of debt for your overall debt, that is INR573 crores?
Lakshay Kataria — Chief Financial Officer
It will be closer to 8.1%, 8.2%.
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
Okay, sir. And sir, on CMO segment, this quarter also we have been good [transit] and at this year, probably will be ending with a very-high base in the CMO segment. From FY’24 and ’25, how should we look at this business? Is it that INR70 crores to INR80 crores per quarter, CMO business would continue to the do this kind of pace or you feel that on the higher base, we should expect decline or a lower-growth on this speed of the business?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Rashmi, fortunately — Rashmi, this is Nikhil Chopra. Fortunately, we were able to take care of the demand, particularly in the world of cough and cold lozenges which has happened this year. And overall, for quarter four also, the order book is healthy. But going ahead, the dialogues that we have been having with our partners is, you should expect moderate growth probably for next year, and next to next year, there is lot of developmental which is happening in the world of CDMO particularly for lozenges, where the intention is to add new partners and also widen our portfolio. Today, our major portfolio is in the world of cough and cold. We have developed some new proof-of-concept which I’ve been talking and that should see some daylight probably in eight to ten months, to 12 months from here, particularly in the world of sleep disorders, motion sickness, oral thrush, all those lozenges, we have developed the proof-of-concept and we have shared those with our partners. These all programs that we are working with our partners takes its own time, it has got its own gestation period.
So the short answer is, we should expect moderate growth next year and going ahead, we are very much aspirational in this part of our business, this business which is contributing 12% to our revenue. Going ahead, probably three years from here, this business should contribute 20% to our revenue.
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
We have become large is terms of the cardiology therapy. Can you give the top three therapy preference which you want to make it big for your domestic business and their current composition to the nine-months of FY’23?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
We don’t share and we don’t measure in terms of contribution from therapy. But just to share with you, we are a dominant player in the world of cardiology. Cilacar being a big brand, close to INR500 crores. Nicardia being a big brand and close to INR150 crores as reported in IMS. And now, with our venturing entering into the world of heart failure, getting into the world of Statins, overall, if I have to talk about the chronic market share — chronic contribution today to India business, it is close to 50%. The intention is, how do we improve this chronic contribution to India business close to 60% now, that is short to midterm.
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
Okay. And sir, how has this Metrogyl and Rantac has done during the quarter in terms of growth?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So, Metrogyl, overall, it is more a seasonal product, if you look at. With summers coming in, I think March onwards we will see the demand ramping-up. Overall, from a volume perspective, both the products are flat in terms of what we have achieved in us six months, and I think March onwards, March to July-August is a season where we see good traction for Rantac and Metrogyl.
Rashmi Shetty — Dolat Capital Market Private Limited — Analyst
Okay. Thank you, sir. That’s it from my side.
Operator
[Operator Instructions]
The next question is from the line of Sriraam Rathi from BNP Paribas. Please go ahead.
Sriraam Rathi — BNP Paribas — Analyst
Yeah. Thanks for the opportunity and congratulations on good set of numbers. Sir, two questions. One on India. I mean, in Azmarda, we took the price. I mean, so is it fair to assume that the Azmarda sales could have been significantly higher this quarter versus in the normal scenario and because — particularly I’m asking this question because Q3 is considered to be seasonally weak quarter in terms of revenue or absolute amount, but we have been able to do it — we have been able to more than INR20 crores this quarter also.
Operator
Sriraam, sorry to interrupt. There is some disturbance from your line. Please use the handset.
Sriraam Rathi — BNP Paribas — Analyst
Yeah. Is it better now?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Yeah, better.
Operator
Yes.
Sriraam Rathi — BNP Paribas — Analyst
Yeah. Sir, my question was on India business. That we took price cut in Azmarda. So is it fair to assume that the contribution of Azmarda would have been significantly higher this quarter versus in the normal scenario?
Kunal Khanna — President, Operations
Sriraam, Kunal, this side. The price cut has been taken effective Jan, right. So we are talking about Q3 numbers, which is reflective of pretty much the same scenario which existed when we actually took the as Azmarda brand from the innovator partner. So, you really don’t see any price cut-back for Azmarda in Q3. What you clearly see is a significant growth which Nikhil added in his commentary, where we have actually been able to double the volumes and the value at the same price, since that time we took this brand from Novartis.
Sriraam Rathi — BNP Paribas — Analyst
Right. Right. Yeah. That’s helpful. Secondly, a question on the gross margin. The gross margin in nine months has been lower because of inflationary pressure on the cost, as well as the higher sales of Azmarda. Now going forward, how should we look at it, because historically we used to be around 65% gross margin business. And now, we are at 63%. So how should we look at this number going forward?
Kunal Khanna — President, Operations
So, when you look at our gross margin trends, we are not very different from the industry, given the inflationary environment and there is product mix impact, largely stemming from Azmarda. But off-late, very recently, we do see the intermediate costs from China easing out a bit and hopefully the situation in Europe should also improve going forward. And with the local sourcing up, Azmarda already being activated, we see our gross margin profile inching upwards towards 64% and northwards moving ahead.
Sriraam Rathi — BNP Paribas — Analyst
Okay. Perfect. Perfect. Thank you. Thank you so much.
Operator
Thank you. The next question is from the line of Shrikant Akolkar from Asian Market Securities. Please go ahead.
Shrikant Akolkar — Asian Market Securities — Analyst
Hi. Good afternoon. Thanks for the opportunity. Congrats on the good set of numbers. Two questions. First question is on the U.S. business. So, if you can talk about what has changed for us in the U.S. business in the ongoing quarter? And the second question is, if you can talk about the kind of synergy that exist between our chronic products, which is Cilacar, Azmarda, Nicardia and the recently-acquired Rosuvastatin franchise? Thank you.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So U.S. business, conceptually, if you see the overall track over last three, four years, quarter two, quarter three is a good quarter. That is what things are there. In terms of we as a company, today, have 50 ANDAs and the biggest product being Glipizide, that is giving us the benefit in terms of the revenues that generating for U.S. business. So, this was in-line with what we had planned for the year. That is where we stand for U.S. business.
And equally, if you are asking about what is happening in the world of chronic synergy of these brands, what I shared earlier, now, when we started our journey, we were 13th rank company in cardiology. When we, that is with Cilacar and Nicardia. When we acquired as Azmarda Heart Failure pill, we were 11th rank company, and with Razel coming in, today we are the 8th rank company and we are the fastest-growing company in the world of cardiology, in top 10. Lot of synergy buildup in terms of cardiologist, physicians, nephrologists. These are very close specialty, where JB has strong foothold and with widening our portfolio, I think this gives us benefit in terms of how we can closely work with the specialty, all these three specialties and help more and more patients in terms of getting right diagnosis. That is the intention. Early stage diagnosis.
Just to also share with you, with the heart failure pill, Azmarda, that we have launched, JB is only company which is running 200 plus heart failure clinics and the intention is, how do we get more and more patients of heart failure in stage one and stage two get diagnosed with help of 2D and 3D Echo, which is a marker of measuring the patient’s severity of heart failure. So all these initiatives have been put in place. Also, lot of consumer campaigns with the help healthcare professionals we have been running for, in the world of hypertension, because of the burden of the disease being so high. Close to 100 million people suffer from hypertension in the country and and one-in-four hypertensive patient is undiagnosed. So, lot of those emphasis we are giving in building the ecosystem, influencing the ecosystem in collaboration with the healthcare professionals.
So, this is what we are trying to do and strengthen our place in the world of chronic, particularly, in the world of cardiology.
Shrikant Akolkar — Asian Market Securities — Analyst
Okay. Just one follow up on the U.S. business. So, how should I look at the next year from the U.S. revenue or pricing erosion sort of perspective?
Kunal Khanna — President, Operations
So, just to add to what Nikhil mentioned, we have always maintained for us, it’s basically, as far as U.S. is concerned, we’ll be looking at very limited set of product opportunities. And the good part is the R&D journey which we started in the last four to five months, we have had three new filings, right. Now, these filings have a approval timeline of close to 12 to 18 months. So, as we continue to organically scale-up our business with OROS technology and platform, the recent filings, which we have done should ideally be commercially available for the markets, 12 to 18 months from hereon.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
And the last forward that we got was in the form of Venlafaxine, that was the ANDA which we got approved. So, what has been spoken in the world of U.S. business. See, we are a very small fish in a big pond. So, we conceptually are working in our strengths, in terms of the products that we manufacture, based on the technology pickup that we have got, be it extended release, modified release. That is a technology that JB owns. So, that that is a dialog that we continuously have with our partners in U.S. and that is how they help us to distribute the product and that is how we do the business in U.S. It’s a cost-plus model.
Shrikant Akolkar — Asian Market Securities — Analyst
Thank you.
Operator
Thank you. The next question is from the line of Alok Dalal from Jefferies India Private Limited. Please go ahead.
Alok Dalal — Jefferies India Private Limited — Analyst
Hi. Good afternoon. Nikhil, a quick question on cardiac and diabetes market from IPM perspective. We have been seeing remarkable slowdown in growth rate for cardiac and diabetes. So apart from some of the big brands going off-patent and reducing the overall value price, are there some other trend changes that you are seeing in the market on the ground?
Kunal Khanna — President, Operations
Not really, actually. The slowdown attributed to a few things which are not completely volume-based, right. There have been big molecules and big brands, which had been subject to price pressure, which has led to a slowdown in the recent past. With respect to off-take of the molecules, patient adoption, the compliance rates, systemically, there is nothing really changing in the market. Yes, there are certain molecule categories where the combinations and the FDCs are doing much better than the single molecules, because the doctors see patients who are already there with comorbid conditions. Also, with respect to Indian market, cost of therapy is a very, very important parameter. You may see trend that some of the single large molecules are being substituted by FDCs, but from an adoption, compliance, prescription perspective there is systemically, nothing really changing. Some of the insulins, the large product insulins, which were there in the market, historically with large market share have been subject to price pressure, which are reflected in the overall, slightly muted growth in the overall therapy area.
Alok Dalal — Jefferies India Private Limited — Analyst
Okay sir. Was there no change in prescription trends as such in the market?
Kunal Khanna — President, Operations
No, there is no change in prescription trend. The prescriptions continue to increase. In fact, for most of the product categories, in our basket, what we have seen is that the prescription numbers are actually surpassed the pre-COVID levels as well. Which clearly indicate that the prescription practicing pattern is all pretty much inching towards normal steady-state levels and quite honestly, some of the feedback, which we have got from a patient perspective, the research work, the patient compliance has improved significantly in the market. So there is nothing really systemically changing out there.
Alok Dalal — Jefferies India Private Limited — Analyst
Okay. Thank you. And second question is, on the company. Company has, in the last two-three years undergone a significant change. You bridged the portfolio gaps through acquisitions. Do you think now the low-hanging fruits are kind of done and say, when you want to reach the fifty-fifty chronic acute mix, what else the company needs to do to achieve that target?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So, what I shared in my earlier context setting is, if you look at what we build organically, what we have acquired, probably gives us confidence in terms of how we can improve the chronic contribution towards India business. And beside the brands outside the chronic space, there are lot of opportunities in the area of pediatrics, respiratory, GI, antibiotics, where we are confident enough in terms of wherever we are present, we want to look at, how do we go more in the depth and improve our penetration in terms of prescription.
By the way, we may be 22nd, 23rd rank company in terms of value, but from a prescription perspective, we are 15th rank company. Also in the area of probiotic that we have acquired. It’s a huge opportunity. Probiotic being a INR2,000 crore market. We are the 5th largest player with 7.5% market share. We are looking at opportunities to double our market share, because we have got a good brand in terms of Sporlac. We have fundamental work of lifecycle management, getting into women-health Sporlac, pediatric Sporlac versions, all those things. So we see opportunity in terms of the portfolio that we have got today in our hand.
Alok Dalal — Jefferies India Private Limited — Analyst
Okay. Sir, we have no plans to enter any new therapies? Just the bridge portfolio gaps within existing therapy again?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Yes. Absolutely right.
Alok Dalal — Jefferies India Private Limited — Analyst
Okay. Okay. Thank you and all the best.
Operator
Thank you. [Operator Instructions]
The next question is from the line of Abdulkader Puranwala from Elara Capital. Please go ahead.
Abdulkader Puranwala — Elara Capital — Analyst
Yeah. Hi, sir. Thank you for the opportunity. Sir, my first question is on the price cut what we took on Azmarda. So is this what we had already planned or this was largely because of the competitive pressure that we had to? And secondly, when we talk about some gross margin improvement to happen from next quarter onwards because of the sourcing, so, I mean, how should we look at the gross margins? I mean, we guided close to 64%. But, with the kind of sales volume you are witnessing currently, would there be any risks to the margin guidance that we have provided?
Kunal Khanna — President, Operations
So we’ll take the first question in terms of the price cut. See, when we actually look at this acquisition, we were very certain that there is going to be price erosion in the market and we were quite prepared in terms of at what price will be kind of positioning our product, at what price point. We continue to maintain that price point. The the scenario for us has not changed from what we initially kind of envisaged in terms of how the market will shape up. For all the pillar molecules and brands where LOE has happened, you do see that eventually it is the innovator and innovative partners, who pretty much hold significant majority market share. And for us also, we believe that that’s how the market is going to shape up. In fact, the first month post-LOE gives us good confidence that we are on the right path of increasing volumes, even if it comes at a cost of price erosion by making up much more affordable. And in the first month itself, we have seen a volume uptick of closer to 1. 25 to 1.3 times than what we used to do pre-LOE scenario.
Coming to the point of you how the margin profile will — how the margin local sourcing of Azmarda will change the overall gross margin profile, we don’t want to comment on product-specific margin and its impact on our overall gross margin profile. But, the overall key elements, which will play-out, which we believe, the recent trends with China opening up, some prices easing out and the overall situation in Europe further eases out going-forward, then there is no reason for us to not to believe that will be closer to 64%.
Abdulkader Puranwala — Elara Capital — Analyst
Sure. Got that.
Lakshay Kataria — Chief Financial Officer
In fact, in terms of gross margins, this will sort of build more towards Q1 and after that, I think Q4 pretty much will be in a similar range as where we are.
Kunal Khanna — President, Operations
Because we are still in the transitionary…
Lakshay Kataria — Chief Financial Officer
Transitionary quarter.
Kunal Khanna — President, Operations
Quarter.
Lakshay Kataria — Chief Financial Officer
Yeah.
Abdulkader Puranwala — Elara Capital — Analyst
Understood. Understood. And sir, my second question is on the CDMO business, where we earlier spoke about the revenue contribution increasing from 12% to 30%. So sir, are we indicating that the M&A focus would shift from India to this line-of-business or this would be entirely achievable through the capacities what we have created so far?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Yeah. So, I think —- so there is there are no plants of getting into M&A in the world of CDMO. What I shared was, the contribution going from 12% to 20%, not 30%. And overall, there are two-fold strategy. One is, the entire journey that we have started to work in the world of CDMO is to add new partners. There, as and when the progress happens, we will be more than happy to share.
And second, what I shared earlier was some new products within the world of lozenges, what we have developed, should help us, probably in this journey, which will which is beyond the world of cough and cold, where there are dialogues, where there are continuous dialogues with our partners in terms of what do they want in the form of lozenges in their markets. So that is what — that is — so, this entire buildup will be organic and just and also share with the teams is the capacity that we have in terms of lozenges that we can manufacture, is around close to 2.5 billion. This year, we will be selling close to 1.1 billion lozenges. Capacity is not an issue. Capability we have. Good partners, we have got. So this is the journey that we would like to travel mid to-long-term in the world of CDMO business.
Abdulkader Puranwala — Elara Capital — Analyst
Got it, sir. Thank you and wish you all the best.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Thank you.
Operator
Thank you. The next question is from the line of Aarti Rao from Anand Rathi. Please go ahead.
Aarti Rao — Anand Rathi — Analyst
Yeah. Sir, I had a question regarding Sanzyme. How would have that been growing for nine months? And how do we expect it to grow going for the next two years, because I believe Probiotic segment would be growing at 12% to 14%? So are we doing better than that or how do we see that?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So, this entire Sanzyme business is a part of three segments. First is, Probiotic. Second is women health and third is infertility portfolio. Particularly in the world of Probiotic, the market has been growing at 12% to 14%, and our group that we have demonstrated for last two quarters is 20%-plus. Now this has happened because of three, four reasons.
Overall, when we acquired this asset, this asset overall was under-penetrated, under-represented and now coming from the JB house, we have improved the penetration, we have improved our presence. Secondly, the synergies that we got in, in terms of the prescription because generally a probiotic is prescribed with an antibiotic, for antibiotic induced diarrhea. For — In the world of IBS from gastroenterologist. So, there JB had a strong foothold. And third is lifecycle management that we have done. We have launched a couple of more versions of Sporlac, that is Sporlac GG for pediatric and Sporlac Eva for Women Health. This all is helping us in terms of outscoring the market and delivering better performance in the world of probiotic. Equally, there are steps that we have taken in terms of how do we improve our performance in the world of women health and infertility portfolio.
Aarti Rao — Anand Rathi — Analyst
Okay. And I think, I believe, sir, there was some 320 MRs coming from Sanzyme. So, I mean, what’s the total Mrs that we have and how much of that is kept for Sanzyme?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So, you are absolutely right. There are 300-plus people who came from Sanzyme and today, the MR strength for JB on the ground is close to 2,500.
Aarti Rao — Anand Rathi — Analyst
2,500. So how do we see this MR productivity, I mean, particularly for Sanzyme growing ahead? I mean, I believe I believe it will be INR3 million per MR per year, if I’m not wrong? If it does go by the numbers?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
I think it is better than INR3 million. It is, I think close to INR3.5 million, if I’m not wrong.
Aarti Rao — Anand Rathi — Analyst
Okay. Okay.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
And now, going at a pace of around 20%, because if you look at the productivity that JB as a company, now we are what we are enjoying is close to INR6.5 million, that is INR6.5 lakhs. So, there is a huge scope in terms of how do we come at par and with the way we are growing at 20%-plus and with the expansion in portfolio that we are doing, there is no need, that we want to add people, but to penetrate better, widen our portfolio and meet the same set of doctors, be in the world of infertility, be in the world of mass and class probiotic, be in the world of gynecologist. So, that overall help us in terms of how do we enhance the productivity in the world of Sanzyme.
Aarti Rao — Anand Rathi — Analyst
Okay. And sir, if I may ask the last question, given that Ranitidine is now out of [Analian], we used to have like 30% plus kind of exposure on a company-level. So, how much can that possibly come down to probably 20%? Is something — I’ve been estimating.
Kunal Khanna — President, Operations
So our current exposure to [Analian] portfolio is closer to 12% to 13%.
Aarti Rao — Anand Rathi — Analyst
12%. Okay. Thanks a lot. That’s it from my side.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Thank you.
Operator
Thank you. The next question is from the line of Cyndrella Carvalho from JM Financial Limited. Please go ahead.
Cyndrella Carvalho — JM Financial Limited — Analyst
Thanks for the opportunity. Any color that we can provide on the Russia and the ROW business that we have and what kind of growth estimate should we work with for the coming year?
Kunal Khanna — President, Operations
See, overall, the good thing is that our international business, even outside CMO has kind of trended very well in terms of, if you see the Q3 performance. As Nikhil mentioned further, if we really dissect this business, the two to three key parts are, rest of the world, South Africa, as well as Russia. Russia, we saw very good demand coming from the cough and cold segment, which is pretty much reflective in our international business growing. Overall, our ROW markets have also rebounded well and as we see the order book position, we are quite confident of maintaining that trajectory.
South Africa will be — there is possibly be some level of moderation which we are seeing more on the public side and as the next two quarters progress, we will have further form of visibility of how the mix of public and private portfolio will kind of stack up. But we are still looking at, despite all this, we are still looking at are closer to a double-digit kind of growth for our International business.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
I want to share one more point, in terms of our BGX market in the world of ROW, which happens in four clusters, that is sub-Sahara Africa, Latin-America, Southeast Asia and Middle-East. You should see us launching some progressive portfolio in second part of next — in second part of next year, that is H2, because this part of the world was being denied new launches. So the teams have been working in R&D in terms of identifying the right portfolio, and this overall business model is distributor led, where we have been talking to the regulatory bodies of that part of the world and with the product development that we have done, you should see us doing BE filings and as and when things progresses, we will be more than happy to share.
Cyndrella Carvalho — JM Financial Limited — Analyst
That’s helpful. And one clarification. You mentioned the CDMO contribution from 12% to 20%. Is that 20% for FY’24 or what’s the timeline?
Kunal Khanna — President, Operations
This is essentially our long-term aspiration. When we look at the contribution coming in from CDMO and it inching up to closer to 20%, it’s a long-term, three-year, three to five year time period, which we are looking at.
Cyndrella Carvalho — JM Financial Limited — Analyst
Okay. And in terms of all the cost efficiencies that we were talking about, considering, majority of the acquisitions and synergies that you have already spoken on the call, how should we see this going ahead in FY’24?
Kunal Khanna — President, Operations
See, there are areas where we have got operating leverage and cost synergies on day-one. Particularly, when we acquired the pediatric portfolio or for example, even when we are looking at the Razel acquisition, because there is no real need for us to add incremental feet on-street. So cost synergies for those have been kind of already being realized.
Our main focus is to drive these brands which we have acquired, right. Some of them were under-invested. If you take an example of Sanzyme, Sporlac, you see what we have done with the pediatric portfolio or Azmarda portfolio. Our main focus and trust is how do we keep on improving, increasing our market-share, get more top-line synergies and revenues which will further kind of help us drive better operating leverage. That’s the way we are looking at our acquisitions.
Cyndrella Carvalho — JM Financial Limited — Analyst
But in terms of further synergies or overall cost efficiencies that we have been working on, we should be able to see some more benefits coming in FY’24 as well, as we have seen so-far?
Kunal Khanna — President, Operations
Certainly yes. And there is always an area for improvement as far as cost synergies go, be it on the front-end side or the back-end side. And the fact that we are not kind of committing to any significant feet on-street additions, we have paid the certain marginally pockets territories, but the fact that we are not committing to significant go-to-market addition of numbers, we will certainly see more synergies and benefits coming up.
Cyndrella Carvalho — JM Financial Limited — Analyst
And if I may ask one last question. On the women’s health side, Nikhil was mentioning that even though we have a good strategy, but do we see ourselves well in place from WH category side or do we still seeing some gaps there on the woman health which we may need to address over coming 12 to 18 month time-frame? What are we thinking?
Kunal Khanna — President, Operations
Our main strength in the Women Health portfolio is basically reproductive health or IVF portfolio. There, we have some very strong relationships with CAM accounts, which we continue to build upon. We don’t see ourselves as a company, which will be present in every molecule and every subcategory of women health. We want to continue to expand our presence in the areas where we play with, which are essentially, reproductive health, IVF portfolio and some hormones categories. So, as long as we are kind of playing and building on our strengths in those categories And increasing our market share, we will be kind of pretty much well-placed with respect to our aspiration. But we don’t aspire to be there in every molecule within Women Health portfolio.
Cyndrella Carvalho — JM Financial Limited — Analyst
Thank you so much. That’s very helpful.
Operator
[Operator Instructions]
The next question is from the line of Alka Kataria from Centrum Broking. Please go ahead.
Alka Katiyar — Centrum Broking Limited — Analyst
No. It already got answered.
Operator
Thank you. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
Thanks for the opportunity. So just to understand price-volume, new launches growth for the domestic formulation base business for the quarter, without acquisitions?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So, if you look at market first of all, market is flat to negative for volume growth and we are going at volume growth close to 4% to 5%. Price growth is close to 7% to 8%, and new introduction contribution is close to 5%.
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
Okay. And in constant-currency terms, how much would have been the growth for international formulations, overall exports?
Lakshay Kataria — Chief Financial Officer
In terms of top-line, if you look at it, there will be an impact roughly about INR20 crores on the revenue. That’s about — what we reported is about 23% growth. That will come down to about 17%, 18% on constant currency.
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
And then just broadly, what could be the gross margin sort of breakdown for domestic formulations and exports?
Lakshay Kataria — Chief Financial Officer
Sorry, we don’t share that number.
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
Okay. Okay. And just lastly, post these acquisitions and the base business, so in terms of tier of cities of presence as we stand today, if you could just share that detail?
Lakshay Kataria — Chief Financial Officer
Sorry, could you come again. We didn’t get the question.
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
In terms of presence across, let’s say, top one top one or top two tier cities or top three cities, that way, what would be the presence of JB brands?
Kunal Khanna — President, Operations
So you are talking about our field force presence across Metro, Tier-1, Tier-2 and Tier-2 and beyond?
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
Yes. Both on the MR side, as well as on the brands.
Kunal Khanna — President, Operations
Where the MRs are present, that’s where the brands are present. Essentially, our presence kind of varies depending on the portfolio which we are catering, which we are operating in. So, for our acute portfolio and especially, where we have our mature brands such as Rantac and Metrogyl, our presence is very strong even in Tier-3 and Tier-4 markets and semi-urban towns. For our chronic portfolio, 70% of our business is essentially coming in from Metro, Tier-1 and Tier-2 and remaining 25%, 30% comes from Tier-2 and beyond towns.
Tushar Manudhane — Motilal Oswal Financial Services Limited — Analyst
Got it. Thanks. That’s it from my side.
Operator
Thank you. [Operator Instructions]
The next question is from the line of Neelam Punjabi from Perpetuity Ventures LLP. Please go ahead.
Neelam Punjabi — Perpetuity Ventures LLP — Analyst
Yeah. Thanks a lot for the opportunity. My first question is on the CMO business. So we have been — the business has been quite strong for us this year and we’ve been sustaining the INR100 crores quarterly run-rate, plus-minus, 5%. Are we confident of sustaining this kind of numbers for FY’24, about INR400 crores annually? And how is the order book looking for this business for us?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So, Neelam, I think one of your colleagues had asked this question, but let me repeat in terms of the way we see. The order book for quarter four looks good. That is point number one. See, this year, our business almost has doubled in the world of CDMO. This does not happen in a hurry. And this has happened because of the entire upsurge that we saw in the world of anti-inflammatory cough lozenges, particularly in Southeast Asia, Australia, New Zealand, Canada.
Now depending upon the seasonal variability, tomorrow, and we’ll be able to add more color. Probably in our next conference call, we may be able to — we may be close to what we are doing today. We have the capability in terms of giving the output. Today, we are a manufacturing close to around 8 crores to 9 crores lozenges in a month. Long-term agenda, that is what we spoke earlier, probably three years from here, two, three years from me here, you should see us getting into new portfolio of lozenges. That is a long-term plan. In terms of what I shared earlier, sleep disorders, motion sickness, irritable bowel syndrome, some of the new concepts that we have developed and equally, the business development team is working in terms of adding new partners across geography. So that is across geography, outside India. So those are the plans that we’re putting in-place in terms of the way we look at this business0.
Neelam Punjabi — Perpetuity Ventures LLP — Analyst
Sure. That’s very helpful. Secondly, my question is on the operating EBITDA margins. So, could you please give us a guidance for FY’24? Are we planning to be in the range of 24% to 26% orhigher?
Lakshay Kataria — Chief Financial Officer
So in terms of EBITDA margins, our endeavor is to up the level of operating margin next year compared to this year, right. I think we are still sort of working through the plans. This is obviously budget seen. So, I think probably once we meet in May, I think we’ll be able to give you a better sense, but it will surely be upward from where we are standing this year.
Neelam Punjabi — Perpetuity Ventures LLP — Analyst
Sure. Okay. And lastly, on the API business. I’m not sure if this was touched upon earlier, but the business is down about 4% Y-o-Y, although it’s small for us. Could you highlight what was the reasons behind this thing?
Kunal Khanna — President, Operations
It’s just like got to do with some offtake patents. Last year, there was a significant uptick for us in Q3. So the business, we believe will end with moderate growth, but there is no real aberration from what we see fundamentally in our business, and Q4, we expect the muted offtake, which happened in Q3 to cover-up for that.
Neelam Punjabi — Perpetuity Ventures LLP — Analyst
Got it. Okay. That’s all from my end. Thank you so much.
Operator
Thank you. Next question will be the last question that is from the line of Yash Sinha from MICL. Please go ahead.
Unidentified Participant — — Analyst
Yeah. Hi. I just wanted to understand why the purchase of stock and trade metrics on the balance sheet has more than doubled from the same-period year-on-year?
Nikhil Chopra — Chief Executive Officer & Whole-time Director
Sorry, could you repeat the question again?
Unidentified Participant — — Analyst
Yeah. I wanted to understand why on the balance sheet, purchase of stock and trade metric has almost doubled year-on-year?
Lakshay Kataria — Chief Financial Officer
That is because the this heart failure product that we acquired this year is largely being acquired on a P2P basis. That’s why you’re seeing a significant upsurge.
Unidentified Participant — — Analyst
Okay. Okay. Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Jason D’Souza for closing comments. Thank you, and over to you.
Jason D’Souza — Vice President, Investor Relations
Thank you. Thank you, Aman. I’d just like to hand over the mic to Nikhil Chopra to say the final remarks.
Nikhil Chopra — Chief Executive Officer & Whole-time Director
So first of all, thank you all. Thank you all participants participants for participating in today’s conference call. Closing remarks in terms of what I have shared earlier, I think JB continues to deliver a performance in terms of market beating and the guidance going ahead is in terms of India business, where we will continue to gain market share. In terms of the portfolio that we have organically made, inorganic acquisitions that we have done and equally, the new products that we have launched which should help us to deliver market beating performance, may be close to mid-teen growth that is where we see our sort of position.
International market if I have to comment, overall, the way we see volatility, opportunities probably our should be close to low-double-digit. That is where we see ourselves in the coming time. And as Laskhay shared in terms of EBITDA margin guidance, I think we should be better placed for t he coming year in terms of inching up as compared to where we stand in terms of operating EBITDA margin. That is what is the closing remark from my end. And once again, thank you all and we’ll be more than happy to share the proceedings and the development happening in the company as we have been doing it regularly. Thank you. Thank you, all. [Operator Closing Remarks]