Lupin Ltd (NSE: LUPIN) Q3 2026 Earnings Call dated Feb. 13, 2026
Corporate Participants:
Vinita Gupta — Chief Executive Officer
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Nilesh Gupta — Managing Director
Analysts:
Unidentified Participant
Nikhil Mathur — Analyst
Tushar Manudhane — Analyst
Kunal Dhamesha — Analyst
Neha Manpuria — Analyst
Shashank Krishnakumar — Analyst
Kunal Randeria — Analyst
Bansi Desai — Analyst
Vivek Agrawal — Analyst
Shyam Srinivasan — Analyst
Presentation:
operator
Evening and welcome. Welcome to Lupin Limited Q3FY26 earnings conference call. Thank you for your participation in the call today. Please note that all participants line will be in listen only mode and there will be an opportunity for you to ask. Foreign. And welcome. Welcome to Lupin Limited Q3FY26 earnings conference call. Thank you for your participation in the call today. Please note that all participants line will be in listen only mode and there will be an opportunity for you to ask questions after the opening remarks. Please also note that this conference is on recording mode. I now hand over the conference to the management.
Thank you. And over to you.
Vinita Gupta — Chief Executive Officer
Good evening everyone and thank you for joining us. I’m pleased to welcome you to a Q3 fiscal year 26 earnings call. Joining me today are our Managing Director Nilesh Asefo Ramesh and our head of Investor Relations Ravi. We look forward to sharing our Q3 performance and our outlook for the year ahead. We are pleased to report another quarter of strong execution with revenues passing last quarter’s performance. This marks our 14th consecutive quarter of year on year growth while the US continued to perform well. I would like to highlight that growth this quarter was broad based.
Most of our regions including India, Prescription Business, Europe, Latam and other emerging markets delivered double digit year on year growth. Turn to digital businesses. This quarter was particularly strong for us in the us. Many recorded the highest sales in the region so far. Exclusivity. Our first product from the proprietary Nanomi Long acting injection. Milestone this quarter was the successful US FDA inspection of a biologics facility in Pune followed by the approval.
operator
They can’t hear us.
Vinita Gupta — Chief Executive Officer
They can’t hear at all.
operator
Yeah, we losing you. Yeah, there’s a connection. Yeah, you can continue. Give us a minute. Yeah, you can hear me? Yeah. Yeah. Now we can.
Vinita Gupta — Chief Executive Officer
Okay. So. So an important was a successful USFT inspection of. First for the US market. We have entered into an exclusive licensing.
operator
Okay, we’ll just pause for a couple of connectivity issues that try to let me change to another device.
Vinita Gupta — Chief Executive Officer
They can’t hear us at all.
operator
We can, but we losing the speech. I mean this is staggered speak from Z from Zoom. Yeah, we’ll restart I think. Okay, we’ll keep the connection on. Yeah. Can you hear us now? We can, sir. Okay.
Vinita Gupta — Chief Executive Officer
Okay. Is this clear?
operator
Yeah, it’s clear.
Vinita Gupta — Chief Executive Officer
Okay. And could they hear us in the beginning or should we start from the beginning?
operator
It’s better if we start from the beginning, ma’. Am.
Vinita Gupta — Chief Executive Officer
Okay, so thank you. Welcome everyone. We are pleased to report another quarter of strong execution with revenues surpassing last quarter’s record performance. This marks our 14th consecutive quarter of year on year growth. While the US continued to perform well, I would like to highlight that growth this quarter was broad based. Most of our regions including India, Prescription Business, Europe, Latam and other emerging markets delivered double digit year on year growth. Turning to individual business segments, this quarter was a particularly strong one for us in the US where we recorded the highest sales in the region so far.
Growth was driven by new products such as Tolvaptin, where we benefited from being the only generic on the market. We also launched generic Risperidone constep with CGT Exclusivity, first product from our proprietary nanomi long acting injectable platform. Our base business also grew supported by higher volumes and seasonal tailwinds more than offsetting low single digit price erosion. An important milestone this quarter was a successful US FDA inspection of our biologics facility in Pune followed by the approval of Beckville Grastem, our first biosimilar for the US Market. We have entered into an exclusive licensing agreement with Valerim to commercialize the product with an expected launch before the end of this quarter.
We see meaningful tailwinds in this segment driven by favorable regulatory and commercial developments. As mentioned earlier, we remain focused on doubling the share of complex products in our US business over the next few years while continuing to expand our specialty portfolio through a mix of organic initiatives and targeted acquisitions. Moving to India, revenues grew 5.6% year on year with the core prescription business growing 10.9%, partially offset by lower local tender sales in our global institutional business. On a nine month basis, prescription growth stood at 9.4%, broadly in line with IPM growth of 9.3% excluding the impact of loss of exclusivity on products such as Gibtolio and Ajadua.
Domestic growth was 11.2% year on year for the nine months. Volume growth remains strong at 5.6% and the chronic segment now accounts for 67% of our portfolio up from 65% last quarter. Both cardiac and respiratory therapies continued their strong momentum, growing at 1.4 times and 1.6 times their respective market growth. During the quarter we also launched two new divisions including one focused on obesity. This division will engage diabetologists, cardiologists and gastroenterologists ahead of the planned Day one launch of Injectable Semaglutide while we continue parallel development of the oral formulation. In addition, we entered into a strategic partnership with Gannon Lee of China for Bofanglutide, a novel fortnightly GLP1 agonist, further strengthening our diabetes and obesity portfolio in India.
We remain confident that our India Formulations business will continue to outperform IPM by 1.2 to 1.3 times, supported by our strong sales force of over 11,000 people and pipeline of more than 80 new product launches over the coming years including innovative in house and in licensed products. Our other developed markets Europe, Canada and Australia accounted for 11% of our total sales and delivered 11% year on year growth this quarter. We expect this contribution to increase as we roll out our pipeline of complex products and complete the acquisition of Visu Pharma which we expect to close this quarter.
Emerging markets delivered an impressive 42% year on year growth led by Brazil, Mexico and Philippines. Brazil in particular maintained strong momentum post the turnaround last quarter, growing 99% year on year in local currency driven by successful commercialization of Depagl Flozen on R and D spend was 7.5% of sales this quarter, among the highest in the Indian Pharma sector. Reflecting our continued focus on complex and specialty platforms. We have over 50 active products in the pipeline with near term emphasis on respiratory, complex injectables and biosimilars. Over time we expect a growing share of R and D investment to flow into specialty programs and value added medicines including long acting injectables, green propellant products and 505B2 assets.
We are also strengthening our India Innovation portfolio through both in house development and in licensing of late stage assets. On the compliance front, we received nai status with zero observations for a Nagpur unit 1 facility along with EIRS for Nagpur unit 2 injectables and the Aurangabad facility. We remain fully committed to maintaining the highest global quality and regulatory standards across all our sites. Before I hand it over to Ramesh, I would like to reiterate that we remain optimistic about our growth prospects. We have clear strategic drivers in place to deliver sustainable long term growth across our businesses.
Innovation will be a key differentiator supported by continued investments in technology including AI to make the company future ready and resilient as we navigate opportunities and challenges ahead. With that, I’ll now hand it over to Ramesh to walk you through a detailed review of our financial performance.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Thank you Vinita. Friends, I welcome you all to our Q3 FY26 earnings call. As you may have seen from the results, we have again delivered a very strong quarter continuing the momentum of the last few quarters. Revenue from operations in EBITDA scaled a new high, exceeding the record performance we had delivered last quarter EBITDA margins reached 31.1%, 681 basis points higher than the similar period last year. Sales Diving to the numbers total revenues from operations the quarter came in at 7,168 crores as compared to 5,768 crores in Q3FY25 last year, a growth of 24% year on year.
Amongst the key markets, the US grew by 46% year on year, India grew 5.6% year on year, other developed markets have grown 11% year on year and emerging markets have grown 42% year on year. During this quarter our GIB business grew by 7% year on year. The US business coming to the US business this quarter the US business recorded sales of USD 350 million, a growth of 46% year on year and 11% quarter on quarter on constant currency basis, the highest sales ever recorded for this business. This growth has been due to new product launches including ton and growth in base number base business led by higher volumes and seasonality offset by low single digit price declines.
We’re pleased with the recent approval of Felgrastim, a first biosimilar approval for the US which we expect to launch shortly. We have a very exciting pipeline of products in this segment which reinforces our growth prospects in the US going forward. Turning to India, the India region business grew by 5.6% year on year during the year. I’d like to highlight that the CO prescription business grew by 10.9% year on year during Q3FY26. For nine month period our prescription business has grown 9.4% against IPM growth of 9.3%. In fact, if you normalize the loss of exclusivity on some of our diabetes products, the growth would have been 11.2% in the nine months period.
Key segments like respiratory and cardiovascular grew 1.6 and 1.3 times IPM respectively during the nine month period. Chronic share has increased to 67% from the 65% levels in Q2 and share of in licensed products is only 6% as compared to around 12% in FY25 which also has a positive impact on our profitability going ahead. Other Developed Markets as as far as other developed markets are concerned, which includes markets in Europe, Canada and Australia. Revenues in these geographies was 812crores representing a growth of 11% year on year. Other developed markets constitute around 11% of our total sales and their share is expected to increase going ahead with the anticipated closure of the acquisition of Visu Pharma.
During this quarter emerging markets grew by 42% year on year with strong growth in Brazil, Mexico and Philippines offsetting tempered performance in South Africa. Brazil has another strong quarter growing at 99% year on year in local currency terms. Getting on to the P and L Other Operating Income Other operating income for the quarter was at Rupees 67 crores as against 149 crores in Q3FY25 and 216 crores in Q2FY26 largely impacted by lower export benefits from the PLI scheme during the quarter. Gross Margins Gross margins continued upward trajectory during the quarter at 73.5% up from 69.4% in Q3 last year and up from 73.3% in Q2 FY26.
This 420 basis points year on year improvement is driven by multiple factors which includes better product mix, lower share of unlicensed products including higher profitability and loss of exclusivity products in India, increased volumes and other cost improvements and efficiencies which you have undertaken over the last several quarters. Employee Benefit Expenses this looks at 1143 crores an increase of 16.1% year on year from 984 crores in Q3 FY25 translating to 16.1% of sales as compared to 17.5% in Q3 last year. This change is largely at attributable to higher cost due to regular annual increments and business growth during the period.
Manufacturing and other expenses Q3FY26 manufacturing other expenses came in at rupees 1937 crores increasing 14.2% year on year from rupees 1696 crores in Q3FY25 translating to 27.3% of sales. Visa was 30.2% last year. The expenses were higher mainly due to higher volumes in the normal course of business. R and D at rupees 535 crores is 7% of sales as compared to 441 crores in Q3 last year with almost 70% of our R D directed towards complex portfolio. So the 9 months ended 9 months 526r d spend at rupees 1555 crores is 7 point percent 7.7% of sales for the full year.
As indicated we expect R and D to be around 7.5% to 8.5% EBITDA EBITDA excluding forex and other income during the quarter was 2,210 crores. Visa was 1,366 crores to the same period last year, an increase of 62% year on year with a margin of 31.1%. We serviced 24.3% last year the same period an increase of 681 basis points over the last year. On a nine month basis EBITDA was 5,988 crores an increase of 50% year on year with margins of 29.8%. Visa was 24% over the same period last year. We expect full year EBITDA margins to be in the range of 27 to 28% higher than our earlier guidance of 25 to 26%.
Whilst we expect business to continue to exhibit robust performance over Overall margins in Q4 would be tempered by higher R and D expenditure and a lower PLI income ETR. Turning to the tax rate, ETR is expected to be about 21.4% for the nine months FY26 for the full year we expect ETR to be about 21 to 22%. Operating working capital which stands at 7948 crores as of 31st December against 6821 crores as of 31st December 25th which translates to 101 days of working capital against 103 days in the previous quarter. Net cash Net cash stood at 2,879 crores as against 310 crores as of 31-3-25.
Whilst we focus on increased cash generation for our business, we would like to highlight that we continue to explore strategic allocation of our capital to ensure the long term mission of the company including on the specialty front esg. On the sustainability front Lupin has achieved the highest a leadership rating from CDP for both climate change and water security placing us amongst the select group of group of global companies recognized for excellence in sustainability performance and transparency of disclosures. In addition, Lupin’s greenhouse gases emissions reduction targets have been formally approved by the SBTI reinforcing the scientific rigor and credibility of our climate ambitions.
Together these recognitions reflect the strength of our climate strategy, disciplined execution and our unwavering commitment to creating long term sustainable value for all our stakeholders. With this we open the floor for discussions.
operator
Thank you very much, sir. We will now begin the question and answer session requested all the participants who wish to ask questions to raise your hands on the participant tab on the screen. We will wait for 30 seconds for the queue to assemble. Thank you, Thank you for your patience. We’ll take the first question from Nikhil Mathu. Yeah, hi, good evening. This is Nikhil from SDFC Mutual Fund.
Nikhil Mathur — Analyst
I have two questions. First and foremost, congrats on the continued grid performance. Now my first question is on the US outlook, let’s say in going into FY29 as well. Now obviously with the mirror background settlement, it seems that Mirabagrone should continue into FY27 and certain part of FY28 as well. But ma’, am, can you highlight what will be the drivers of the US business once Tolvaptin and Mirabagron start tapering off? I believe you have, I mean you have pector grim approval. We have talked about other respiratory assets. So any help on how should we look at launches, meaningful launches over the next two years so that once Mirabegra and Tolaptin come off and you go back to a growth part in the US that would be helpful.
Any color on this?
Vinita Gupta — Chief Executive Officer
Sure, yeah. So you know, we are very pleased that we have Mirabegron as a material contributor in the next two years as well as hopefully Tolvaptin also continues. Just given the size of the product and the share we have so far, Maybe we have 35% share of that market given that it’s a specialty product. So we continue to build share on Tolvaptin. Having said that, we have multiple new product launches planned over the next couple of years, in particular on the injectables front, some on the respiratory front as well as the biosimilars front. So as I look at the last couple of quarters, we’ve got approvals for injectable products like Glucagon, liraglutide, Risperidone, Consta and with the Pegfil Grastem approval getting into the biosimilars market as well to build the institutional business.
So the institutional business will be a material build over the next three years and we see it really ramping up very nicely over the next three to five years to be a material contributor to the US business. Likewise, the biosimilar business in particular will also be a material contributor to the US with Pecklegrastim then Ranibizumab that we hopefully will be able to launch in fiscal year 27 and then the on body Pegfil Grastim which is making good progress and then Eflipercept and eternacept in 29, calendar 29 that will be actually fiscal year 30. And then we have other products that we applied as well like Mepolizumab that are in the pipeline.
So pretty rich pipeline of biosimilars that we believe given the current momentum in the marketplace, access into the market will be a material growth driver for the organization. The additional I’d say growth driver which so far has not featured into Our business is 505B2S the company has been working on on 5,05 for the past couple of years especially on the injectable front. In fiscal year 27 we will start our first 5.05b2 and that’s going to ramp up in the next couple of years as a material contributor as well. So we have multiple growth drivers at this point for the organization and feel fairly confident that you know we can one sustain this billion plus revenue level over the next couple of years and build from there as we bring you know, material biosimilars, respiratory products as well as injectables including the other first two files that we have in our portfolio to market.
Nikhil Mathur — Analyst
Yep. So if I look at the three biosimilars that we talked about in the more near term which are pegfil, grastim plus renipizumab plus afibaseb now assuming that approvals come through in FY27, in FY28 and 29 they combine these three products, can they contribute let’s say $100 million or roundabout that kind of a number in next two, three years the combined basket of these three products.
Vinita Gupta — Chief Executive Officer
Yeah, the potential is there.
Nikhil Mathur — Analyst
Understood. Also I wanted to check on you have tentative approval for this product Zywave. I guess the litigation is ongoing. Any probabilistic launch timing of this product And I suppose Lupin could be sole FTF in this product.
Vinita Gupta — Chief Executive Officer
Yeah, we are exclusive to file on that product. The launch date I believe is fiscal year 29 if I’m not mistaken.
Nikhil Mathur — Analyst
Got it. Understood. And one final question I have on the India business. I think the JAN IQV data is showing good growth. Also last quarter X of the tender business I think the growth has come in good. So are we in a good let’s say 12, 13% growth environment for the company and with all the IL issues in the base now and insulin tailwinds.
Nilesh Gupta — Managing Director
Yeah. So I think 20 to 30% ahead of the market is what we would see ourselves at. The market is growing strong so double digit growth is assured and I think not just for the next couple of quarters but I think for the next couple of years we would expect to continue growth.
I think a lot of the exclusivities are behind us. The insulin opportunity is there. Semaglutide Will will come in as well. So lots of positive growth drivers for India.
Nikhil Mathur — Analyst
Got it. This helpful. Thank you so much. Thanks n for your question.
operator
We’ll take the next question from Tushar Manudani.
Tushar Manudhane — Analyst
Yeah, thanks for the opportunity and congrats on the good set of members. Just on your comments on use of AI. So if you could elaborate which geography or which divisions have we sort of started implementing use of AI and how faster or, or difficult, whichever way the use of AI has been on the development side, on the manufacturing side.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Yeah, you know, we have made some good progress on AI and this is across the entire company. We started off with sales and marketing, but clearly we are looking at other, other divisions also. But manufacturing and maintenance is one other part. The other is of course quality and the like. You’re working with multiple, you know, consultants. The first, most important thing is the fact that we need to bring all of this data together, you know, you know, over time you’ve actually created several repositories and it’s important to actually bring everything together under one architectural roof.
And that’s, that’s exactly what we’re trying to do at this stage. But clearly we have set our eyes on AI for all our functions, including finance, hr, legal and procurement and the like. And we expect a lot of these pilot projects that you have been working on to be kind of implemented over the next nine to 12 months.
Tushar Manudhane — Analyst
Got it, sir. And secondly, the opening remarks also alluded to forming a new division for semaglutide with respect to catering to diabetologist, cardiologists, gastroenterologist. So how many misses is like sort of getting focused for this particular product?
Nilesh Gupta — Managing Director
It’s about 200 people, but I think we’ll scale it up, up as, as needed.
Tushar Manudhane — Analyst
So how do you see this? You know, because given that there are going to be multiple players, of course there will be a pricing impact, but volumes scaling up again, how the demand is expected to shape up. That is something really interesting to watch out. But, but if you could, you know, throw, you know, your insights on this opportunity for India.
Nilesh Gupta — Managing Director
Yeah, I think many companies are going to launch it, but the fact that we are a large cardio metabolic player will make sure that we are able to get the right kind of prescription share in this product.
There’s, there’s a lot planned and you know, again, what we’re seeing is not unique. Everybody else is planning extra bells and whistles from that perspective. But I think we have a very deep patient support program that we intend to engage into this as well. We believe that we’ll be there on day one. And you know, again, as a large cardiometabolic player, it should be a nice opportunity. We have created this division. We have the ability to scale up, we have the ability to add it into other divisions as well. So you know, I think the, it would be interesting.
Let’s see. I think it’s just a month away.
Tushar Manudhane — Analyst
Great. All the best. Thank you.
Nilesh Gupta — Managing Director
Thank you, Tushar.
operator
We’ll take the next question from Bino.
Unidentified Participant
Hi, good morning and good afternoon. Just a follow up on Mirabegron settlement. From your notes I see that you have taken a, a provision of $15 million, whereas the total payout is 90 million. So why only 15 million dollar provision?
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Yeah, 15 is essentially what relates to as the very, the past, whilst 75 is linked to in fact future, you know, being in the market. So clearly it relates to the future and that’s the reason why you finally 15 at this stage, the balance 95 will be spread over the next up to September 27th.
Unidentified Participant
Okay. So that will come in other expenses later on in quarters.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
It’s actually, you know, would not impact the EBITDA because it’s actually a license that we need to kind of amortize over a period of time.
Unidentified Participant
Got it. Second, now that we have a license in place, is there room to improve our Mirabagran market share? Because I believe we were selling much lower quantity than the other generic competitor. Is there a chance to equalize this?
Vinita Gupta — Chief Executive Officer
Well, so we have 40% generic share and generics, you know, between us and Zytrus, we also have 40% of the overall molecule. So you know, we’ll see what makes sense. It’s a really good contributor to our P and L and will determine if it makes sense to take take on additional share.
Unidentified Participant
Got it. And why this end date of September 27? Because the next orange book patent of Mirabegron expires only in 2030. So what prevents you from being exclusive in the market till then?
Vinita Gupta — Chief Executive Officer
Till 2030 you mean?
Unidentified Participant
Yeah.
Vinita Gupta — Chief Executive Officer
We believe majority of the settlements that the brand has entered with other companies are to, you know, that date in 27th. September 27th.
Unidentified Participant
Okay. And one last question on Corvepton. What? How do you see the competitive scenario panning out? Why hasn’t a vortex launched till now? And do you expect more approvals if.
Vinita Gupta — Chief Executive Officer
You’Re not certain why they haven’t launched? We know that IP is certainly a hurdle that we have crossed and the others haven’t. So that could be a consideration. It’s not the Easiest product to manufacture. That could be another consideration. We don’t have any intelligence on, you know, Tevas approval. And then we know that other competitors have November 26, 30 month state 8 and into 27. So we think that, you know, if competition comes in, it’s likely going to be staggered.
Unidentified Participant
Got it. And one last, if I may add in any update on Breo Ellipta in your pipeline?
Vinita Gupta — Chief Executive Officer
Yeah, we’re still making progress with the development. We were hoping to have it filed by now, but I’d say that it’s still actively in our respiratory pipeline. We hope to really make material progress this calendar year.
Unidentified Participant
Thank you. I’ll jump back.
Vinita Gupta — Chief Executive Officer
Thank you.
operator
Thanks, Binu. We’ll have the next question from Kunal Damisha.
Kunal Dhamesha — Analyst
Hey. Hi. Can you hear me? Yes. Yeah, thank you for the opportunity. First one, just trying to understand the mirror background settlement little more. So we have this licensing outgo of 75 billion plus. We have a per unit licensing fees that we’ll pay. Right. So are those separate? Are those same thing? How to think about that?
Vinita Gupta — Chief Executive Officer
They’re separate. Can you still hear us?
Kunal Dhamesha — Analyst
Taken off from the revenue. You know, your.
operator
Kunal, can you repeat your question please?
Vinita Gupta — Chief Executive Officer
We can’t hear you.
Kunal Dhamesha — Analyst
Can you hear me now? Yes, yes. Yeah. So, so basically the prepaid per unit licensing fee, how will we account for that? Will it be offset from the revenue or will it be recognized in cogs or how to think about that.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
There are two portions, as we were just mentioning. There is a smaller portion which actually has to be knocked off from, you know, the overall operating profit and there’s an element which will actually get amortized over a period of time. So both will actually hit the P and L.
Kunal Dhamesha — Analyst
Okay. One above ebitda, one below ebitda.
Kunal Dhamesha — Analyst
Yeah. And then would you say that with this settlement the profitability of this product changes materially? If we just look at from an above EBITDA perspective,
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
the fact of the matter is it will impact profits, but we still think it’s still going to be attractive enough.
Kunal Dhamesha — Analyst
And second question on the overall profitability outlook, let’s say beyond FY26. I think earlier we had suggested for FY27 EBITDA margin range of around 24 to 25%. So how do we think that is going to play out now with the kind of products that we have in US and India, etc.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
So clearly the top line Bionc would continue. And we, you know, we just mentioned about the fact that Mira background will have a fresh lease of life, so to speak to. We are not seeing competition though of course we do expect that to enter at some point of time. And Vinita alluded to a number of new product launches that could potentially happen next year. And there’s semi clutide opportunities and the like and of course there are opportunities in emerging markets. So clearly we are very bullish about in fact keeping the top line buoyancy going. There is tremendous focus on costs as well.
There are a number of initiatives that you’ve taken up in recent times. All of this would also, you know, kind of help us to kind of maintain the gross margins and thereafter the EBITDA margins. Also whilst there would be a dip in terms of margins, we service the current year because of certain, you know, because of sheer competition for some of the products. We still believe that you’d be good for actually looking at 24 to 25% next year.
Kunal Dhamesha — Analyst
And last one for Nilesh sir on the semaglutide gender launch. You know, what is your expectation, let’s say from a year one market perspective, how much it can grow and did we allude to, you know, potential revenue size in year one in, in one of the media interviews, if I heard it correctly?
Nilesh Gupta — Managing Director
Yes, we did the, I think the internal modeling that we have at this point of time seems to suggest that this will be a 1500 crore odd opportunity in the first year.
And we talked about maybe doing 50, 60 crores, something like that in the first year. But we’ll see. I think there’s just too many variables right now. How much is the pricing going to go down? How much is the pent up demand? I mean you’ve seen how Manjaro went in the first five months since launch. When this happens, the price point, what it means and we want to be responsible, we want to do this the right way. You know, we don’t want to just sell this for the heck of it. So I think the intent would be to do it in as responsible a manner.
But I think it should be a nice opportunity
Kunal Dhamesha — Analyst
and so supply wouldn’t be an issue. Let’s say if we think about, you know, equitable market share or whatever we are currently having in cardio diabetic space. If we want to achieve that kind of market share, we are, we have good enough supply right for the market.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Yes, we don’t see a concern at this point.
Kunal Dhamesha — Analyst
Sure sir, thank you and all the best. Thanks.
operator
Before we proceed, this is a gentle reminder to request all the participants to raise their hands from the participants tab for more questions.
Can we have Neha Manpuria for the next question please.
Neha Manpuria — Analyst
Yeah, thanks for taking my question, Ramesh. Sir, on the 25% margin that you’ve mentioned for fiscal 27, given that we have a fair bit of visibility and MEA background on also 12 opt in at least for, you know, next few quarters, how should I think about the cost, you know, other than the investment in the field force expansion that you talked about, you know, what should be the, you know, R and D increase or investments in other areas that you’re looking at?
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Yeah, clearly you know, there is a lot of focus on costs and while that will certainly continue, there would also be, you know, spends for R D which may increase given the fact that we are focusing on a number of things out there.
So clearly, you know, combined with the fact that there would be some tapering off of top line products and the fact that you might have to provide for extra expenditure on the R and D, just being conservative in saying about 24 to 25% would be, you know, par for the course.
Neha Manpuria — Analyst
So the R D next year would be in the 7 and a half, 8 and a half percent range or would it be lower as a percentage of sales?
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
I think seven and a half, eight and a percent is clearly a good number to look at at this stage.
Neha Manpuria — Analyst
Okay, understood. And you called out seasonality as one of the factors for the strong growth that we saw in the US Was that a meaningful contributor to the quarter on quarter improvement in the US sales or was a large part of that driven by Tolvapt and Mirabagrone?
Vinita Gupta — Chief Executive Officer
No, Tolvaptin, Mirabagron certainly were the larger contributors. But even products like albuterol, tiotropium, oseltamivir have grown quarter on quarter because of the seasonality.
Neha Manpuria — Analyst
So that should normalize a little bit, right, as we go into the next two quarters.
Vinita Gupta — Chief Executive Officer
Yes.
Neha Manpuria — Analyst
Okay, correct. Thank you so much.
Vinita Gupta — Chief Executive Officer
Thanks Neha.
operator
Can we reiterate our reminder to request all the participants to raise the hands from the tab? We’ll wait for a few moment to few seconds to for the Q2 lineup please. Thank you. Go ahead. Hello? Yeah, can we have the next question from Shashankumar?
Shashank Krishnakumar — Analyst
Yeah, hi, thanks for taking my question, Vinita. Just to get your thoughts around some of the recent regulations that we’ve seen around PBMs in the US now my understanding is a large part of the benefit will probably flow down to the end customers, the payment and this is largely neutral from a generic manufacturer standpoint.
Now is that how you also probably look at it and. Or could there be any change in terms of the industry Rating levels, etc, which you probably foresee.
Vinita Gupta — Chief Executive Officer
Sorry, I missed your question. The front end of your question. Can you repeat it?
Shashank Krishnakumar — Analyst
Yeah, yeah. So I just wanted to thoughts around the recent regulations around VMs which you have seen in the U.S. regulations around what? PBM.
Vinita Gupta — Chief Executive Officer
PBMs in the U.S. oh, PBMs. Okay. Yeah, yeah.
Shashank Krishnakumar — Analyst
Understanding is part of the benefit will probably flow through to the customers and players and this is largely neutral from a generic manufacturer standpoint. Now is the. You also could there be some meaningful changes in terms of industry dynamics or rebating levels which you probably foresee.
Vinita Gupta — Chief Executive Officer
Yeah. So the new administration has been focusing hard on the PBMs and you know, also the Trump RX has gone live in the past couple of days. That really nets out the pricing for a number of the brand companies as they’ve committed, you know, in the agreements that they have signed with the administration. For the most part, as we understand it, the companies have really given the benefit of the rebates to PBMs, you know, to the government so that that benefit can be offered to the consumer, to the patients and consumers. So we really don’t see a material change in pricing.
Shashank Krishnakumar — Analyst
Thank you. And just a second one. You typically call out the growth figure for Europe. So if you could just share that.
Vinita Gupta — Chief Executive Officer
For this quarter, it was 11% growth.
operator
Yeah, got it. Thank you. That’s it for. Thank you. Shashank, can we have the next question from Nikhil Madhur?
Nikhil Mathur — Analyst
Yeah. Thank you for the opportunity again. I just wanted to understand the injectable strategy, let’s say from a two, three year perspective. So I mean, great to have products like Glucagon and Respital Consta Victor approvals and having been launched. But I suspect, I mean none of these products would be big enough to kind of move the needle so much as far as the overall injectable sales is concerned. So how far are we from a big material launch on the injectable side? So can you talk about what products have been filed? What are you looking at and which sort of products can give you, let’s say a 100, $200 million kind of a sales based on the injectables and over what time period can you achieve that?
Vinita Gupta — Chief Executive Officer
Yeah, so apart from the products I mentioned, you know, we also have Dalba Venson that we have filed that both the injectable, the generic version as well as a 505B2 version of the product, we have eribulin, smaller product. Just looking through the major products that iron sucrose will be a material one for us and yeah, and more 505 B2s that we haven’t announced. But we really see the injectables portfolio ramping up in the next three years to 100 million plus with the multiple, the tens of millions of dollars in individual products and then biosimilars adding to it.
Nikhil Mathur — Analyst
Understood. And on Peckflu Graston, I mean it seems like while it’s great to have the approval in place, but can it be a meaningful revenue driver because there is competition there. I mean some of the biosimilars are pretty well established for a number of years now. So what’s the go to market strategy on Peckville Grastem now and when do we start numbers showing up for Lupin in this product?
Vinita Gupta — Chief Executive Officer
So we would launch this quarter, but you’ll start seeing numbers really in the next fiscal year. And we are very encouraged with what we are hearing from the marketplace. We have tied up with this company with strong experts across the biosimilars market from the McKesson and other emeritusbergen and other specialty distribution groups. And we see a real place for a new Peckflograstum in the marketplace. So I’d say a couple of years ago we were not very gung ho on biosimilars, but today we see significant potential with Beck filled Grastim to start with, but also the other biosimilars that we have in our pipeline.
Nikhil Mathur — Analyst
But just curious, I mean, with so many biosimilars in this, in this product being already there, why would a ABC or a Mackesson tie up with Lupin? I mean, is the cost going to be the proposition here? But if the cost comes off, would the margins be lucrative enough for you to make money on this product?
Vinita Gupta — Chief Executive Officer
Yeah. Typically a new product is attractive from a reimbursement standpoint to the, you know, payers. So that itself will drive the initial uptick. And beyond that, you’ve seen a number of companies that have driven the price down actually get out of the market and potentially they will relaunch with a different pricing strategy into the marketplace. So we really see the market for biosimilars and for Pegfeld Grastum shifting. Also. We are the only truly integrated player with the India cost advantage. You know, having our own API, our own finished product, you know, the other companies don’t have the advantage that we do.
operator
Understood. Okay, got it. Okay, thank you. Thanks. Nikhil. Can we have the next question from Kunal Anderia?
Kunal Randeria — Analyst
Hi. Hi. Good afternoon. So my question is on R D spends in the last couple of years your R D budget has gone from around 14, 1500 crores, around almost 2100 crores crores now. So if you would like to share which area that you’re spending in, how much of this would be on biosimilars that you have budgeted? Because some of these spends I think, you know, would come off also in the, you know, years ahead. So is there a chance that maybe after FY 26 or 27, your R D, you know, starts going down also?
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
No, I wouldn’t think so.
Clearly we are spending on the more complex stuff, you know, which includes the injectable speeds, the inhalations piece. You know, any drug device combination always costs a lot of money with clinical trials and the like. And of course we have our bio, biosimilars. We’ve also always spoken about specialty ambitions and the like. So clearly the spends would keep going up. But if a turnover keeps going up also, you know, as a percentage of sales, you know, it might actually languish at a particular, at a particular point, but in absolute value terms, it would certainly keep going up.
Sure. So if I understand correctly, so you’re not adding more projects, it’s just that you’re expanding into a bit more high value, high cost projects.
Kunal Randeria — Analyst
So it is adding more projects overall.
Vinita Gupta — Chief Executive Officer
You’Re pivoting to more complex stuff. Right, right, but, but then, okay, let me put it this way. Is is your budget on genetics, the usual para threes and the paraphores, I mean the oral solids and all, is that same? I mean that is going up actually in absolute terms and percentage terms, it would be going down. Okay.
Kunal Randeria — Analyst
Yeah. Okay, that’s good to know. Second, second question again. You know, you have now a healthy cash balance. You are generating cash. So you know, is specialty on your radar and you know, exactly which therapies, in which markets would you be targeting?
Vinita Gupta — Chief Executive Officer
I mean, so it has been on our radar, as we have shared in the past and the therapy areas also we’ve been pretty vocal, you know, with the respiratory being an area that we would like to build given our current position as well as neurology, where we have nemuscula to start with. We are planning to bring Namuscula into the US and would like to get other products in the therapy area. And third now is ophthalmology. Maybe ever start in Europe with Visu Pharma, but we would like to get additional assets both in Europe as well as ideally US Europe and other developed markets.
Kunal Randeria — Analyst
So would you be more comfortable buying assets which have been approved or ones where you perhaps have to Do a phase three trial, file it and then, you know, commercialize it.
Vinita Gupta — Chief Executive Officer
Yes, sir. We’ve been looking across the board. I mean, of course, commercialized assets would be very lucrative, but they are far and few because companies don’t part with them easily. So we’re also looking at assets that are in phase three or have completed phase two successfully and, you know, are ready to go into phase three.
Kunal Randeria — Analyst
Sure. And just one more if I can, please. At last year you had announced that for Tiotropium, you had tied up with someone, a company in China. Do you think that’s a meaningful opportunity for you or you mean for the Chinese market? Yes, yes, I think it continues not. Not very meaningful. I mean, it’s not meaningful now or you don’t expect it to be meaningful in future too, when it’s not in the market. Right.
Vinita Gupta — Chief Executive Officer
It’s not approved.
Kunal Randeria — Analyst
Okay. Okay. Got it. Thank you. Yeah, thanks, girl. We’ll take the next question from Bansi Desai.
Bansi Desai — Analyst
Yeah, hi. Thanks for taking my question. So, you know, the first question is on the overall biosimilar, you know, landscape. In the US we see recent developments which are all aimed at improving affordability and accessibility, which is good, structurally positive for us as well. But at the same time it is also going to make market more competitive. So how should we think about what. Will be those key factors which will determine our success? You mentioned about having that cost advantage, but I’m assuming a lot of Indian companies would have that. So that’s number one. And the second is we also see PBMs having their own brands or bringing their own labels in the space. So that adds to the competition. Right. How do you think about that relationship?
Vinita Gupta — Chief Executive Officer
So I’ll maybe take the second question first. When it comes to the private labels, that’s actually avenue for us as well to gain share. When we see the Cordavis label, for example, for Yumira, that really drove significant share for Sandoz, we certainly see that as a positive for a biosimilar. So what we are starting to see is the block of the PBMS is actually going down. PBMS are partnering now with biosimilars to really bring access to biosimilars in the marketplace. So that is one second. I mean, we are very mindful of the fact that with the market opening up, the regulatory requirements, you know, becoming less burdensome, competition can increase.
So we are very selective in our portfolio, you know, shortlist, in a selection process of our pipeline, we are selectively going after programs that we believe we can be in the first wave, we believe we can be one of few based on technology advantage or otherwise. And third, we also have a lens of the three therapy areas that we want to build in the specialty front because we also are building commercial front end for the three areas that we can leverage across biosimilar as well as branded specialty products. We are carving our own therapeutic area strategy as well as on the biosimilars front.
So all of those give us a confidence that we have. We are not going after everything under the sun from a portfolio standpoint. We are being very selective around areas where we can truly make a difference. The other thing I will say is while you hear about the cost advantage of India across the generic drug companies, just look at how many biosimilars companies are out there. There are a handful of biosimilar companies at scale across the world between India, Europe as well as Korea. So it’s not the same level of competition as you see in the generic small molecule generic industry, which also makes biosimilars a more attractive area overall.
That’s.
Bansi Desai — Analyst
That’s very helpful, ma’. Am. And also just a second question, you know, which is a clarification on Mira background. If I think about $90 million of. Payment, is it more or less what. We have earned so far on this product or much lower than what would have made? You know, that’s number one. And second, you know, with the settlement, you know, until September 27th, does it. Does it mean that, you know, we should not anticipate any generic players to come in this period or they could. Come and settle, you know, with similar. Terms, that is, you know, paying royalty. Etcetera, on the sales that they could do.
Vinita Gupta — Chief Executive Officer
So it’s hard to predict what other generics will do for us. It’s given us certainty, right? I mean, we have no litigation burden anymore, no risk and no impediment to sell the product in the marketplace. And, you know, we still look at it as a very attractive contributor to a P and L.
operator
All right, thanks, Mansi. We’ll take the next question from Vivek Agrawal.
Vivek Agrawal — Analyst
Hello, Vivek, are you there? Hello? Yeah, we can hear you. Yeah, thanks. Couple of years back, you have highlighted that you are developing a product. It’s a drug device combination called Nexplanon. So just want to understand where the product is. Is it still in the development or have you filed this product, any status regarding this product? Thank you.
Vinita Gupta — Chief Executive Officer
Yeah, it is in clinical development right now.
Vivek Agrawal — Analyst
Okay, but don’t you think that’s quite long? That is, there still in the clinical development and all. So when you expect to file this product?
Vinita Gupta — Chief Executive Officer
I believe it is planned to be filed in fiscal year 28.
Vivek Agrawal — Analyst
Fiscal year 28. Yeah.
Vinita Gupta — Chief Executive Officer
It is a long development cycle also pretty complex development.
Vivek Agrawal — Analyst
Understood. And second question is related to India business where I think you have done the business quite well in the last couple of years and RX business is doing phenomenally well. Right. And the confidence is also there. So just to understand like the next three to four years how to look at the growth trends of India RX business and if you can outline for example the the kind of initiatives that you are, you are taking in terms of product launches, in terms of market penetration on salesforce etc so that what gives you the confidence, that confidence that you could continue to grow this business.
Thank you.
Nilesh Gupta — Managing Director
So our aspiration would be to continue to grow double digit. We believe that the market will grow 7, 8% and therefore we will grow double digit in this segment. That is linked with the fact that our focus is on chronic therapy areas. As you know, 65% of our revenues come from chronic side. We’re doubling down. We had added 900 people to our sales force in the last six months. So we’re doubling down on the market. We have expanded into newer divisions into newer therapy areas as well as. And we haven’t even done the innovation pipeline yet.
I think that’s something which has just started. In the next three, four years you’ll start seeing more innovative products coming from our portfolio as well. So I think a combination of the need for the market, expanding our reach, expanding the breadth of our offering as well, all of these together will drive it. We’ve talked in the past about other things like patient support and the like. I think all of these together will help deliver this growth.
Vivek Agrawal — Analyst
Understood. And just last question. If I can squeeze in in terms of capital allocation, right. Apart from R D investments that you are making and you are generating significant cash.
So if you can prioritize, let’s say a couple of I think top three areas where you want to spend money, let’s say the next three to four years. Thank you.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
So clearly we have the ability to borrow about 1.5, $1.6 billion so to speak. Apart from of course what we have on on our balance sheet in terms of cash already, you know, so from a purchase perspective we would be looking at specialty assets, you know, so hitherto we have been looking at impact critical, you know, something in the range of sweet spot being about 250 to 300.
We might up it a Little more based again on the proposition on the table. So that’s the most important part for us. We have also clearly defined the threshold limits when it comes to in fact adjacencies and so on. So we would, you know, invest only in. So as much as the initial estimates were. So clearly that’s again a threshold limit. And of course you’d be interested in actually looking at assets in India, the sweet spot here again being about 250 to $300 million.
Vivek Agrawal — Analyst
Understood. So when you talk about specialty assets, is it mainly related to us or are you also comfortable buying some assets, for example, which might be making losses initially and can turn profitable over a period of time?
Vinita Gupta — Chief Executive Officer
So we are looking at us, Europe, developed markets like the Visio Pharma was Europe. Right. And us as well. And as you mentioned earlier, we are looking at clinical stage assets too. Will require investment before we bring it to the market.
Vivek Agrawal — Analyst
Understood. Thanks. Thanks. That’s from my side, maybe. Last two questions. Yeah, thanks, Vivek.
operator
We’ll take the next question from Shyam Sri University.
Shyam Srinivasan — Analyst
Hi, good evening. Thank you for taking my question. Just one on Visu Pharma. Again, sorry I missed maybe the opening remarks. Has it now closed the transaction? When are we starting to consolidate it? I remember 57 or 60 products. 50. 55 million Euro was the annual expectation. So if you could just refresh those numbers, please. Thank you.
Vinita Gupta — Chief Executive Officer
Yeah. So we expect to close it in the next few weeks of this quarter, basically. So. So we’ll start consolidating next quarter onwards. And the revenues very much stay on track. I believe. 60 million plus.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
Yeah, a little more. And for the next fiscal. But really for the numbers that you spoke about for this, for this year.
Shyam Srinivasan — Analyst
Yeah, yeah. Sorry, Ramesh. Euros or dollars? Sorry,
Shyam Srinivasan — Analyst
just Euros. All of this is euros. You’re a million. Right, got it. And margin I remember was also high. 25% or 30% if I remember. Eventually, based again on our cost synergies, all of that will actually get to that level. It’ll actually more but 21% to start. Yeah, yeah, got it. Very helpful. Sec. Second question on emerging markets. Is there a base effect we had like 40% plus growth? Any geographies to call out?
Vinita Gupta — Chief Executive Officer
Is it Brazil that we called out? You know, Brazil had almost doubled in.
Ramesh Swaminathan — Executive Director, Global Chief Financial Officer and Head of API Plus
The quarter thanks to Dapaji Flows in that we actually introduced out there. And of course the lineup that we have for the future, that will kind of continue for some time. Sorry, Ramesh. Maybe constant currency growth, like 40% seems odd. So is it like local currencies what are these growing at? It actually nearly doubled in terms of turnover given the fact that this product was a big hitter out there. Got it, got it. And lastly on India growth, I know the 5.6% volume growth is 9 month. So what’s the 11? No, no, no. 5.6 is actually taking into account the fact that we actually had a, you.
Shyam Srinivasan — Analyst
Know, nine month volume growth. Volume growth. But I’m just looking at say Q3 in this 11 prescription growth. What is the price, volume split and how is chronic done? I think that that’s my last question.
Vinita Gupta — Chief Executive Officer
Extremely well.
Nilesh Gupta — Managing Director
It has done well. I want to say it’s similar on the, on the volume in Q3 as well.
Vinita Gupta — Chief Executive Officer
Actually the share of chronic has grown, gone up to 67% 5% and new.
Nilesh Gupta — Managing Director
Products gave us 1.5%. Sorry, unless your voice is cutting, can you. Volume growth was 6.5% for Q3 and it was 5.6 for nine months. Perfect. Thank you. Thank you. And all the best. Thank you. Thank you so much.
operator
Thank you very much for all your participation. I now hand the conference over to the management for the closing comments.
Vinita Gupta — Chief Executive Officer
Thank you all. Sorry for the technical glitches, but hopefully we were able to respond to all your questions. We are very optimistic at this point to close the year on a very strong note. And equally the. The year ahead looks pretty strong. We continue to work around our strategic drivers to build, you know, specialty and complex platforms to enable us to grow sustainably over the next few years. So thank you again for joining us and we look forward to interacting with you in the next couple of months.
operator
Thank you, ma’. Am. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us and you may now exit the webinar. Thank you.