Lupin Ltd (NSE: LUPIN) Q4 2025 Earnings Call dated May. 15, 2025
Corporate Participants:
Ravi Agrawal — Head of Investor Relations
Unidentified Speaker
Vinita Gupta — Chief Executive Officer
Nilesh Gupta — Managing Director
Ramesh Swaminathan — Global Chief Financial Officer
Rajeev Sibal — President, India business
Analysts:
Kunal Lakhan — Analyst
Unidentified Participant
Surya Patra — Analyst
Kunal Randeria — Analyst
Neha Manpuria — Analyst
Kunal Dhamesha — Analyst
Presentation:
Ravi Agrawal — Head of Investor Relations
Good evening dear friends it gives me great pleasure in welcoming you all for our investor meet, including the people who have joined us online. Apologies for the slight delay, but it’s great to have you all here and welcome again. On the dias today, we have Vinita Gupta, our CEO; Nilesh Gupta, our Managing Director; and Ramesh, our Global CFO; I’m Ravi Agrowal, Head of Investor Relations at Lupin. We have a small AV, which will run for you and then we will get into a presentation and then after that we’ll follow it up with Q&A.
Over to you for running the EV here to start the —
Unidentified Speaker
Everyone has the right to a healthier tomorrow access to the medicines they need and the quality care they deserve. At Lupin we’re pioneering that brighter future today by putting science into action it’s a commitment to having the best people, creating the best treatments the best way. It’s ensuring those treatments reach millions of families and it’s delivering relief to those who need it most. It’s a better, healthier tomorrow powered by people who care. We are we catalyze treatments that transform hope into healing.
Ravi Agrawal — Head of Investor Relations
Can we just start the presentation now if you could just roll-over to the second slide please with the safe-harbor statement yeah. One slide after this. The next slide, please. Yeah, before we start, I think the safe-harbor statement. Information provided during this presentation may contain forward-looking statements. These statements are based on current expectations, forecasts and assumptions that are subject to risks and uncertainties which could cause actual outcomes and results to differ materially from those statements. The company disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements, whether as a result of new information, future events or otherwise, unless required by applicable law. I’d now request to come and just start the presentation for us, please.
Vinita Gupta — Chief Executive Officer
Thank you, Ravi. If you can hear me, I’m likely going to do it from here because the acoustics there seem okay to me. Yeah. Great. Well, it’s a real pleasure to meet all of you here today in-person. I know we haven’t done face-to-face meeting for a good number of years. The last-time I recall we met it was I think in 2022 when — thank you. When we were just coming out of COVID, had gone through a number of challenges that had impacted our performance. And from there in 2022, with the effort that we worked upon, I think about it, number-one, execution of new product launches, in particular in the US to turn-around the US business, leveraging our complex generic portfolio to build other developed markets, growing India and other emerging markets on a consistent basis. At the same time, focus on cost optimization, whether it’s footprint rationalization or a broad efficiency measures.
And third, our quality and compliance efforts that enabled us to work-through our OAI site, three sites in particular, have really enabled us to turn our business around over the last three years. We’re very pleased that fiscal year ’25 has been a stellar year for the organization where we have continued the momentum, the growth momentum as well as continue to evolve our strategic growth drivers and capabilities to continue to grow in the future. So we look-forward to sharing with you our performance this far and our plans going-forward. So before that, I’ll just start with where-is today. When you look at our company globally, we are the 12th largest generic company by revenues. Had a great year with $2.7 billion in revenue and $625 million in EBITDA, delivered by a very strong group of lupinites.
But you look at our presence across our key markets, we have a leadership position in all our key markets. The — starting with the US, where we are the third-largest company by prescriptions dispensed. India, where we’re the eighth largest primarily organically. I mean there are companies that have done acquisitions that have gone above us, but as a — from an organic growth standpoint, we have consistently grown our India business and other markets like Australia, where we are the fourth largest company on the generic front and South Africa, we are the eighth largest company on the generic front. So really a substantial position in all our critical markets, driven by a very strong pipeline of generics, branded drugs as well as complex generics. If you look at our business globally for this past year is very well-diversified.
You look at the developed markets and the emerging markets, the US and other developed markets are roughly 50%, India and other emerging markets are roughly 50%. And when you look at the nature of the business, the India and emerging market is primarily branded business, US, other developed market is primarily generic business, so very well-diversified business geographically. Very pleased with the progress we have made on the ESG front. So it’s been a stellar year for us, not only from a financial perspective, building on the growth momentum, but also growing sustainably as an organization. So this is our current footprint around the world.
In particular, on the manufacturing front, we have a very strong footprint that supports our generic business globally with 15 manufacturing sites around the world, four in the Americas, two in the US in particular that give us tremendous capability and flexibility to be able to manufacture more in the US if it made sense if based on the tariff considerations and also the economic incentives that the government puts in-place, if it’s attractive, we will have the flexibility to manufacture more in the US. Look at our R&D centers, seven R&D centers around the world, including four in the Americas again two in the US as well as in Mexico and Brazil. And then one in the Netherlands, the Nomi long-acting injectable R&D center in Nanomi.
So tremendous capabilities on the R&D and manufacturing front to drive growth going-forward have certainly contributed significantly to our growth so-far as an organization. If you look at our manufacturing plants, in particular for the US, we have 12 plants that serve the US market. I’d say 11 right now because the Pune biotech facility is yet to be approved by the FDA but have multiple manufacturing sites that are approved by the FDA as well as other regulators that enable us to build a generic business.
So if you look at our major pillars of growth, first purpose, you saw a purpose statement that we take a lot of pride in, we put a lot of effort in crystallizing that statement and are very proud of catalyzing treatments both across innovative medicines as well as affordable medicines to serve the communities and the patients that we provide drugs to. When you look at our major pillars of our business, the US in particular has come a long way for the organization, evolving our portfolio from the simple products to complex generics, in particular on the innovation front, very soon on the injectable front as well, fiscal year ’26 is going to be a material year-on the injectables front and biosimilars, which is an opportunity that is emerging now for us. There’s been a lot of back-and-forth on the biosimilars front over the last couple of years. But given the changes from a regulatory perspective, the FDA reducing the requirements for interchangeability studies as well as the private-label model appearing in the US, the US is emerging as attractive biosimilars market, of course with selective portfolio choices. We also continue to operate our legacy business of oral solids, ophthalmic dermatologies and leverage product opportunities that differentiate us like you’ve seen Mirabegron Tolvaptin that is going to be a material contributor in fiscal year ’26.
So the US is on a very strong foundation, a very strong trajectory from a growth perspective in the next couple of years. Other developed markets, you know, especially Europe, Canada, Australia, leveraging our portfolio in the US, the platforms in the US complex generics are the largest part of growth in other developed markets and allow us to really, you know, build both on the — on our capacities, manufacturing as well as R&D capabilities to gain operating leverage across the globe. In India, we continue to focus on delivering growth above the market. The last five years, the last 10 years, we have consistently grown above the market. We’d like to grow 1.2 times, 1.3 times the market and we have done that in many years.
In the last couple of years with the loss of exclusivity on in-licensed products, the growth has been a little below that, but it’s still been above-market growth over the last many years. And our strategy is both innovative products as well as a pipeline that we have built internally as well as licensed through partners as well as acquisitions. You saw recently, we acquired the insulin brand from Lilly, which enables us to really gain the end-to-end economics on the on the product. And we’ll continue to look at acquisition opportunities to bolster our portfolio in the India business.
Simultaneously, we also are expanding our footprint. We have done a pretty well in terms of sales force expansion over the last couple of years and continue to focus on expanding our footprint as a business within India. Also, you’ve seen us getting into strategic adjacencies that enable us to go beyond the pill, beyond the prescription medicine into diagnostics, digital OTC products that enable us to bring a full solution to the patient as opposed to just the prescription. We are starting to see the benefits of this strategy. We’re starting to see the impact of, you know, the strategy on our prescription business and we’ll continue to evolve these areas to be able to both strategically contribute to our position in the marketplace as well as build value through these efforts. Other emerging markets, in particular, South Africa, Brazil, Mexico, Philippines, we have strong local businesses that are pretty self-sustaining, all of them tend to really run the business on a positive cash-flow on — growing profitably, primarily through their own pipeline developed internally or in-licensed, but also there possible, integrate with Lupin’s pipeline, in particular on in the key areas like respiratory, CNS, biologics as well.
In the emerging markets, we also have a strong position in institutional business with our TB portfolio, which is the company’s legacy business. I’m very proud that we are continuing to maintain a leadership position in this segment. On the API front, we have built substantial scale and it’s enabled us to really build very strong reliability of supply on the genetics side of the business has been a critical piece of discussion in the US conversations very recently where the US would like to bring API manufacturing in the US if possible. But we as an organization have more than 50% of our generic portfolio vertically-integrated through our own APIs that enables us to really have a very strong cost position as well as reliability of supply that we’ve been able to leverage to ensure that we meet the market requirements on a consistent basis.
We also have leveraged the API business and capabilities to build a CDMO business as you saw. This past year, we have made significant progress there in terms of the teams and capabilities and we’ll continue to evolve our CDMO business based on this API capabilities to be able to build value on — with this vertical. So multiple growth drivers in the organization that give us the confidence of consistent growth going-forward. So when I look at the journey over the last five years, many areas to highlight. On the commercial front, the turnaround of the US business was a material event for us over the last couple of years that enabled us to get back to consistent growth and more importantly, profitable growth for the organization evolve our EBITDA margins on a consistent basis over the last 10 to 12 quarters.
On the complex generic front, we were the first Indian company to launch a DPI. In the US, we were very proud of with Spiriva to be able to get that approval in 2023 and launch it as a sole generic. We are still the only generic in the marketplace. It took us long five years from filing to get FDA approval. But you know it’s enabled us to build respiratory as a major vertical for our business in the US. When I look at our MDI and DPI business in the US, right now, it’s one-third of our US portfolio from a revenues perspective. So material contributor to our business in the US as well as globally and also differentiates us as an organization. In India, we have expanded our position with 11 new divisions, field force up from it was 5,000 I think five years ago to 10,000 plus at this point, a significant expansion that has enabled us to grow above the market growth rate in the country.
If you look at our chronic share in India, so this is a — again, we’re very proud of this accomplishment. Five years ago, the picture looked very different. Our chronic share was sub 50%. Today, it’s 64% chronic, so more sustainable, more profitable business. And when we compare ourselves with our peers, we actually one of the best mix of chronic versus acute as an organization in India. We have continued to focus on commercial excellence through in areas that we felt needed dedicated focus like the trade generics business that we recently spun out into a wholly-owned subsidiary with the idea of really focusing hard on driving that business given the growth of the trade generics business in India and manufacturing solutions, which again, as I mentioned in the previous slide on the API front allows us to leverage our capabilities on the API, R&D and manufacturing to build the CDMO business.
We’ve also had strategic acquisitions over the last five years, in the US enabled us to get into the brand side of the business. When was looking to get-out of the market, we thought it was a strategic opportunity for us to have a foot into the brand business on the respiratory front in particular. So — and the product has grown since we acquired with very limited promotion efforts. So we’re looking at how we can build further on this start. In France that enabled us to get into — we didn’t have a presence in France until we acquired and gave us a very nice injectables portfolio that enables us to build our internal pipeline on-top of this to build-up our business in France and Southern Cross in Australia that allowed us to almost double our business has been a significant contributor to growth in the Australian market and has enabled us to get to that position of fourth largest generic in the Australian market.
If you look at the material product launches over the last five years, Suprep from Somerset, Albuterol from India, that I just mentioned, our first dry powder inhaler in the US,, material contributor in the last fiscal year and continues to be this fiscal year as well. In India, we are very pleased to launch differentiated product like and, unique novel respiratory products that enable us to differentiate our product offering with the pulmonologists. In Europe, has — which is a first air generic has enabled us to really double our business in Europe. So significant contributor to growing our business in Europe that has done extremely well over the last three to five years. And Namuskla, our first orphan drug, our first brand in Europe has grown very nicely over the last five years as well.
We actually in the process of the second indication, we started with the NDM indication, which is a smaller DM indication is much larger and they’re going through a Phase-3 study at present for the DM indication in Europe as well as the US that will enable us to maximize this brand globally. And lastly,, which has been a material contributor to our business in Europe and as well as other parts of the world, Japan, Southeast Asia, Latin-America. And we are very pleased with how things are evolving in the US and will determine how we commercialize this product in the US in the years ahead. ’29 is when the pattern goes off in the US.
If you look at the impact on the financials, we have improved our gross margins from 64% five years ago to 69%. Look at our EBITDA margins gone from 16% to 24%. We are a zero-debt company. At this point, we have strong cash flows and have considerably improved our ROCE from the 10% level to 20%. So very pleased with the financial results of all of the efforts over the last many years. On the compliance front, we’ve made material strides, getting three of our sites, Pitampur, Goa, Somerset out of warning letters to a VAI status and I’m confident if the FDA was to visit the two pending sites, Mandy Deep as well as Tarapur, our sites are ready to receive them. But we don’t have any pending products from the site, so they don’t have any hurry to come into inspect these sites. But I’m confident in the near-future, we will get those sites cleared as well.
The last couple of years, it’s not been quiet. We’ve had multiple inspections across all of our different facilities and we have sailed through each of them. So looking-forward to continuing that strong trajectory going-forward. You can see the impact of all of these efforts over the last five years. I just mentioned the financial results, but as you can see from the chart, the last three years has been a really strong trajectory for us and has also reflected in the shareholder value that has built over the last few years.
So for fiscal year ’25, you’ve already seen the numbers. So I’m not going to reiterate them. It’s been a stellar year from a revenue growth standpoint, from a margin growth standpoint, a net income standpoint, but we are very pleased that all our markets, all our regions grew this past year and majority of them grew double-digit. If you look at India grew at 14%, America — North-America grew at 16%, US per se grew at 17%. EMEA grew 22%, so they have a stellar year in EMEA. APAC grew 5%, LatAm grew 10% after our Mexico facility came back up last year. It’s now back to the pre-closure levels. So very pleased with the growth there as well. The rest of the world, along with our GIB business, the Tuba TB tender business grew 11% and our API business grew 3%. So a stellar year for us as an organization.
So I want to switch from there to a couple of the trends in our industry as you know we are looking at the industry, certainly a lot happening in the US, but also multiple other trends that pose both challenges as well as opportunities for us as an organization. If I look at the geopolitical situation, a lot of things happening around the globe that really put India in a very strong position. In particular, as countries and regions are derisking from China. The US in particular is very focused on de-risking from China and you — and India, I think is very well-positioned to leverage that opportunity on multiple fronts. Our tariffs are certainly going to shape the trade relationships between countries, the US is every day, every week-in the news about tariffs on China, tariffs on other countries, tariffs on India, we are hopeful that based on the bilateral trade negotiation between India and the US, the importance of Indian pharma sector in the US, given 50% of the prescriptions in the US come from India that we are going to be able to convince the stakeholders to have either zero tariff or limited tariff on drugs from India.
Suddenly there’s been a statement from the Trump administration on that front in the last couple of weeks that sounded promising so fingers crossed on that front. There’s a paradigm shift in the US healthcare industry with all of the changes the new administration has made a number of areas that are impacted so-far. Many healthcare programs have been impacted, a lot of research funding has been impacted in the US. Dosch has made material cuts across multiple areas. The FDA has lost 20,000 people. Thankfully, the reviewers are still there. I mean, they cut a lot of the policy folks, but not the review branch that actively reviews and approves products the Inflation Reduction Act you know the government is actively reviewing the pill penalty on IRA I mean as a number of you might know, the IRA allowed HHS to negotiate drug pricing for biologics 13 years after the product is approved, while on small molecules, it’s nine years after product is approved, which was considered really a discrimination against small molecules and that is under active review at this point.
So we expect that it could land in the same place as biologics. You’ve heard in the last couple of days MFN, you know the executive order from the Trump administration linking the price pricing in the US to most favored Nation pricing across developed markets in particular. We’re going to see how this evolves. I think a lot of analysts are saying this is more bark than bike. At this point, you know, a number of big pharma companies have made commitments to invest in the US and very likely will renegotiate or backtrack those commitments if the government is going to pay pricing to overseas markets. We know that the US market actually funds for majority of the innovation in our industry. So really reducing pricing in the US is going to have a significant impact on the innovation front in the pharmaceutical industry.
Yeah. There’s a there’s growing talk about onshoring, manufacturing in the US As I mentioned, this is likely going to be very closely linked with what the administration does on the MFN front, also very closely linked to what happens on tariffs. If there are material tariffs in-place and there is an economic incentive to manufacture locally that makes products more viable, certainly that there will be an opportunity to expand in the US, expand manufacturing in the US that is. Switching to India, the pharma industry in India is poised to grow double in the next five years. And this is not just in India, but also, you know, exports from India outside of the country. So it’s a expectation of the revenues of the entire industry out of India is expected to double over the next five years. You fueled a good part by the growth in the middle-class you know that’s expected to be 170 million people in by 2030 and also very pleased that the government is now supporting develop in India in the new R&D scheme, the research scheme, incentive scheme that the government has talked about putting in-place just like the production link scheme, PLI scheme that has really benefited the industry in the last five years.
We expect that this will certainly encourage more innovation in India and was much-needed for the country. The India opportunity is pivoting from pharma alone to overall healthcare. We talked a little bit about this in our context and patient-centric adjacencies like diagnostics, digital health. Consumer health is gaining momentum. So the full solution for patients and physicians is gaining momentum in India. On the generic side of the business for the developed markets, there certainly is a move towards complex generics as well as specialty. We see multiple companies moving in that direction, both on the complex generic front as well as the 505B2 as well as innovation front. We have an active, of course, on the complex generic front, we have executed in multiple areas, inhalation in particular.
But also on the specialty 505B2 front, we have active portfolio together, pipeline together of both transformative opportunities as well as incremental innovation that will help us differentiate our portfolio in countries like the US as well as other developed markets. We have seen over the last couple of years, blockbuster drug classes emerge like the, diabetes, obesity class that is set to grow to $100 billion over the next five years. So certainly a material opportunity that has emerged in the marketplace. And as some of these products go off-patent like semaglutide in particular goes up patent March of next year in a handful of countries, it will open the market for a further expansion on these class of drugs.
I’d say likewise, there’s also an emergence on the biologics front. In India, in particular, we are seeing a emergence of biologics, in particular in areas like immunology and oncology that is set to grow very nicely. Lastly, the rising impact of AI across industries and in pharma as well. On the brand side of the industry, there’s certainly a very strong focus on drug development front through AI, delivering both efficiency as well as from a timing as well as cost perspective. On the generic side of the business as well, there are multiple areas where we have potential gains here from an efficiency standpoint, from a commercial execution standpoint, from operations standpoint, from a cost optimization as well as quality perspective as well that our industry is going to leverage.
So a lot going on across the globe in our industry. So that brings me to our strategic areas of focus as an organization. Looking at all of these trends, the areas that we have prioritized for our organization. Number-one is to sustain our growth in our two major regions, India as well as the US and based on the portfolio we have based on the investments that we plan to make, we are confident of continuing to grow in both regions in the foreseeable future. Second is expanding our inhalation business. We have established a very strong position on the respiratory front. Today, if I look at our global turnover, 25% or so is on the respiratory side. We were always very strong in India, but over the last five years, we have built a significant presence in the US, Europe and emerging in other parts of the world like Canada, Australia on the respiratory front.
So we continue to build-on this pillar as well as innovate. I mean there is a material move-in particular in countries like Europe to move towards green propellants on the meter dose inhalers. And we believe we are at the forefront with this. Our R&D teams, our manufacturing teams have looked at our evolution from a pipeline perspective on the green propellant side, both for India as well as developed markets like US, Europe and other parts of the world. Third, delivering on our new product launches on-time and on-budget is a major part of our focus. It’s been a substantial success for us over the last three years. Our team has come a long way in ensuring that the products that we target, we deliver them in time and that’s how you’ve seen products like products like products like Spiriva come to-market in time and there’s a very strong focus in the organization to deliver on new product launches.
Number four is establishing a specialty business. I mean, a number of you know, we have had a legacy specialty business in the US. We actually started the US business on the specialty front on the pediatric side. And then over the years, we went into the women’s health side of the business, which we had some success with and got out when we saw challenges when we went through three, four years ago, when we went through the downturn, we decided to get-out of women’s health, but are refocusing our efforts on building the specialty side of the business, both with acquisitions as well as internal pipeline, especially the 505B2 pipeline that we are developing in-house.
Fifth is establishing injectables and biosimilars a growth driver for the future. I mean, we have capabilities across both in R&D and manufacturing as you know. And this year in particular, we’re going to see material inflection on the injectables front with products like glucagon products like liraglutide, from Nanomi coming to-market. And with the emerging biologics opportunities with the FDA regulations easing up as well as the private-label business emerging in the US, we expect biosimilars to be a material growth driver going-forward. Of course, as the barriers reduce, the competition tends to increase. So we are very, very selective with our portfolio here to ensure that we are either in the first wave or we are one of a few players that will enable us to get a solid return on our investment with biologics as well as grow that business on a sustainable basis.
Six is establishing a novel product pipeline. I mentioned the 505E2 pipeline that we are developing internally on our long-acting injectable platform, on our respiratory platform, some oral solids as well that will help us build both our specialty business and in some cases, also help us build a hospital business in the US in particular. Then building scale across other developed generic markets. So we believe that the platforms that we have in-place and the pipeline that we have in-place, whether it’s on the respiratory front, biologics front or the injectables front has tremendous opportunities outside of the US, in particular in Europe, Canada as well as Australia like countries and there’s a tremendous opportunity for us to gain operating leverage from these platforms across the global generics market, especially in the developed markets. So very focused on growing our European business and other developed markets at a faster pace through these strengths that we have established.
And lastly, I’d say that continued focus on the cost position across our network. The bulk of our business is still generics and cost is and cost optimization has to be a consistent effort to drive profitability on the generic side of the business. There’s still tremendous opportunities. As much as we have gained a lot of efficiencies over the last five years, there’s still a lot of opportunities that we have on the operational front, on the supply-chain front on the quality front to be able to continue to improve our cost position as an organization. All of this is enabled by, number-one, our focus in quality and compliance. We have an aspiration to be best-in-class in compliance. We were best-in-class 10 years ago and there’s no reason why we can’t get to this goal in the next few years. We are exploring areas that we can leverage digital and AI to get more efficient, to get more creative as an organization, it’s a big lever that is yet to unfold, yet to really conclude what areas make — makes sense for us to double down.
But we have embarked on five or six material areas where we believe we can make a material difference through AI as well as digital. And last and most importantly is our people strategy. I mean, all of what you have seen so-far has been delivered by a very strong committed team and we continue to work on our team, both developing our people internally as well as bringing capabilities from the outside to complement and drive growth going-forward along with our internal team. So very strong areas of growth that we have identified for ourselves. We’re very focused on each of these areas and are confident that we will continue to grow our business on a consistent basis in the years ahead. So with that, I will hand it over to Nilesh to walk us through a deeper review of the business.
Nilesh Gupta — Managing Director
Thank you,. Is this working? Yes, it is. Yeah. First of all, thank you for coming today. We used to always love doing this investor meet in-person and COVID derailed it and then we did it in ’22, then we didn’t do it for a couple of years after. We certainly hope to do this regularly. We just think it’s a wonderful opportunity to engage with you today. Talked about people. I’ll just quickly introduce some of our people. I’ll start here. Ranjana, our Head of turnaround Wave, Ranjana are Head of Quality; Rakesh, our CIO; Kristoph, our Head of TechOps; Rajiv, our Head of India region, Yashar HR head, moving to the next level to our as Chief of Staff, Saurab from our India region, the power behind Rajiv Sumita, Head of BD for India, Mohan, they in-charge of taxes. I’m with our Company Secretary, Robin, our finance team, Suresh from our finance group and then last of all, Ravi, I’m missing out a few in the back, but I think this is an opportunity for you to see some of the power behind Lupin as well.
So on the business I think the biggest change which has happened is the US business where you know we were in this lump and then we’ve grown the US from a net sales perspective back up to the $900 plus million, 925 million year-over-year growth of 13%, that is obviously — I’m going to move this side. That is obviously one of the biggest moves that we’ve had in the number numbers. As you know, we’ve been number three in the US in terms of generic market-share, 4.9% market-share. We’re very proud of the position that we have and especially at times like today when India’s role is being questioned, when tariffs are coming in question, I think a very important lever in this all is the market-share that we have. We’re very proud of the market-share that we have in the US and you’ve seen this before, but in terms of the number of products, about 138 products in the market, 105 of them were in the top three, 45, we’re actually a number-one.
We have more than 100 product spending in the pipeline addressing a market size of close to $150 billion. And you know the recent NPLs, Big, Viriva, and of course, earlier this week, 12. So obviously on a very, very good plot from a launch perspective, as Vinita mentioned, the focus is on cost-efficiency and optimization. And then obviously, we want to build-on that base business that we have of specialty. We have Namuskla that we have, but this was legacy for us, we started with Suprax in the US so certainly want to build-out that specialty. But if you really see what that’s done, if you look at the journey in the last five years, I mean, 800 went to 720, 738, 632, I mean that obviously was a very disruptive time for P&L. And if you see the last three years, you see that consistent 21% growth in the business.
We’re very proud of the way that we’ve turned this around. And obviously, our collective goal is to sustain this growth that we have had and build-on this business. Obviously, that’s come from the move to complex generics. So if you see in FY ’25, complex generics is about 30% of our revenues. If you look at the next five years, that complex generics will move to 49% of revenues. And then obviously, the key growth drivers for the generics business remains NPLs within 100 plus NPLs, 65% of revenues that we will get will come from complex generics. Over 60 filings in the next five years, focused highly on first two files on products and then clearly, in the US, the key imperative would other than the move getting deeper into complex generics would be to build-on specialty, both through our own portfolio, but through acquisitions and alliances as well.
On our second key market, India, we’re ranked number eight. We’re not happy at all with this rank. I think we have to be in the top-five. That’s currently number eight. Good growth rate in the last 10 years at 12%, 1.2 times the market growth rate, 3.4%, market-share. Of our key therapy areas, as you know, are diabetes, cardiovascular and respiratory. GI is actually the fourth largest therapies area for us doing well in diabetes and cardio. Respiratory has been extremely sluggish in the last two years. I think this will be the year that it will bounce-back as well. GI again growing very strong double-digit. Vineita mentioned the sales force side, but total more than 10,000 people across the — across the sales team. Clearly, our focus is on building the innovation pipeline for India and part of that is going to come from very strong in-licensing as well.
So if you see the India business and just double-clicking on that a little bit, if you split it between the IL, the in-license and the non-IL, you’ll see that the in-licensed portfolio actually helped us grow in the past, even in ’21, ’22, you see the growth coming from the darker green bar, which is in-licensed portfolio. The last three years, that portfolio has been challenged, de-growth in FY ’23 of 13% in that portfolio, minus 1% and minus 12% and despite that minus 12% growth, we’ve grown at 8% — at 8.4% versus a market growth of 8% in FY ’25. The loss of exclusivity, the erosion on the in-licensed part is largely played out and therefore from FY ’26, we see getting back on the double-digit growth across the portfolio and continuing double-digit growth going-forward.
The focus, as Vinita mentioned, is on chronic. If you look at the current portfolio, 64% of sales come from chronic. If you see by FY ’30, it will actually move to 70%. So, 69%, 70%. So we actually will get even deeper onto the chronic side. You’ve known this, we’ve talked about this before, number two in respiratory, number three in diabetes, number three in cardiac as well. The growth going-forward, you know, first of all, the aspiration is to grow at 1.2 to 1.3 times the market. And part of that is it’s going to come from enhanced reach, over 2,000 representatives to be added in the next four, five years. Basically programmatically, we want to add the 400, 500 representatives every year. A scientific approach when we’re reaching out to doctors and the community, including the patients that we would work with as well. NPLs, new product launches is going to be a key growth driver, over 80 products in our portfolio for the next five years.
Focus will remain on chronic therapy areas. Obviously, as a large cardiac and diabetes player, GLP-1s is going to be an important part of that play. But also beyond that, getting deeper into GI, building that as the fourth large therapy area for us, getting into oncology, we’re there, but we’re fledgling in our presence. So oncology, CNS, vitamins scaling up in these areas as well as the next three areas that we come into our India region. Obviously, partnering as the market is changing with e-commerce, with organized retail, with the institutional business as well. We’ve evolved organization structure to meet with that target M&A. So sorry, before that, the extra urban, this is a part of the of the market that we feel is very exciting. I think really going into Tier-2, Tier-3, we started with the pilot. The pilot was successful. We’re now scaling up and that’s where the major addition in Salesforce is happening this year.
And obviously, we would look at opportunities in India. They’re few and far between, but we want to be there. We’ve acquired a few, but not of scale. So I think that is certainly an organization priority and then moving closer to physicians, closer to patients through our adjacencies as well. Other developed markets, I think Europe is — we’ve always talked about the fact that we built India and the US and in that neglected Europe, we are certainly focused on Europe. At this point of time, it’s grown to a reasonable scale, $195 million in the last fiscal 14% growth rate in the last five years. Obviously, products like Namuskla, the respiratory portfolio is driving the business in the US, including biosimilar. We are in a few regions and the others are through pan-European partnerships.
So nice reach across Europe. But to be scaled, if you look at the next five years, 50 plus NPLs in Europe, 55% of revenues will actually come from complex generics and obviously expand into other markets with our own onshore presence within Europe. Canada, again, a nice little business, $47 million sales FY ’25, 18% CAGR for the next five — for the last five years, years and 60% of the business coming from specialty. And if you look again going-forward, complex generics will drive that portfolio, a lot of it led by inhalation.
And lastly, on the other developed markets, Australia, $78 million sales. We are ranked number four in the Australian generic market, 20% CAGR in the last five years, growth led by both our own business, but our partnered business within Australia as well. The focus is on new product launches there, including biosimilars and we are expanding into the New Zealand market as well. To the next bucket, other emerging markets, South Africa, $83 million, number-one rank in cardiovascular, the eight largest generic company in South Africa. Focus again remains new product launches there as a large cardiac player to move into GLP-1s as well participating in ARV tenders as well.
Philippines, smaller, close to $40 million in sales, we are number two ranked in our reference market in that, again, a very wide portfolio of products. You see GLP ones everywhere, but 50-plus launches, including biosimilars planned for the Philippines, Mexico about $50 million. Net sales were number three ranked as an ophthalmic player, 70% of our revenues come from ophthalmics and more than 20 products lined-up for launch, including Namuskla. Brazil, $42 million, number three rank in their reference market, a lot of their business there is OTC, 40% of our portfolio in Brazil is OTC. We’re looking at point-of-sales expansion and we’re looking at new product launches across multiple therapy areas in Brazil.
And lastly, our GIP business actually had one of the best CAGRs across our businesses, 20% in the last five years. Growth obviously led by scaling up TB, including prevention of tuberclosis with products like and then and building out the HIV portfolio as well. So the adjacency really quickly. We don’t talk that much about those. On Lupin Diagnostics, 44% year-on-year revenue growth. We have been amongst our peers the fastest to get to INR100 crores. And all our labs are approved by NABL and that was a key part because we want to be a trusted partner on the diagnostics side. That is our differentiation in this area. The target is to be EBITDA-positive in FY ’27, a pretty good reach across most cities. We’re not in North India other than that, we’re actually across most geographies in India. Life is our OTC business, INR150 crores, you know, big plans to grow. The aspiration is to well more than double this in the next in the next three to four years.
A lot of reach being expanded at this point of time. We have two anchor products. There are two more products that we’re launching as well. So small-business today, but certainly another anchor to growth in India. Our digital health, and we’ve talked about this a little bit, but this has been a challenging part of the business for us because you’re actually changing physician behavior as well as patient behavior. So it’s been slow. I think it’s getting to that inflection point. At this point, the goal there is to be the partner of choice for post-discharge care of cardiac patients. And we have our first product, there’s a follow-on product and we can talk a little bit more about this, but I mean the focus here is connected devices, AI-powered apps, experienced healthcare professionals backing it up. If somebody has a cardiac event, we want to be the partner of choice post-discharge.
Lupun Life Sciences is our trade generics business. We launched this last year, obviously building on the equity of the Lupin brand and quality products from Lupun. The focus is primarily on Tier-2 and Tier-3 towns in areas where we’re currently under prescribed and we’re building a lot of on-the-ground presence with more than 400 people in that field force, which is different from the model which many other people do it. The idea there is really to emerge as a strong player in this space. And the last of the adjacencies Manufacturing solutions, our CDMO business. We have a full team, right, global commercial, we have all the structures in-place. I think we’ve taken a lot of effort to put the team together in the course of the last year. We have this legacy of developing complex products, including fermentation products and we have large-scale manufacturing from a CGMP perspective as well.
So — and we have a R&D center in Puna, that really positions us to be able to work on innovation pipeline, but also to carve-out our own differentiation within the space and part of that is going to be in areas like peptides or in ADCs. On the R&D and the portfolio it’s been a fun journey, right? So I think it’s been over 20 years and you know we started with the first two files, right now, we’re pursuing 30-plus first two files as I mentioned, then we moved into inhalation. We really have that franchise across the inhalation space. So MDIs, DPIs, SMIs even. So obviously getting deep into inhalation across the US, India, across Europe as well to expand to other geographies as well. Building that presence next on injectables, on the complex injectables, in particular, depot injections, peptides, liposomal products as well. We’ll talk a little bit more of our pipeline in the next few slides, but clearly, that was the next bucket.
Biosimilars where we’ve built a nice commercial presence ex-US, but the intention, of course, is to be meaningful in the US on that as well. And what we have is absolutely world-class R&D and manufacturing capabilities and the ability to do a pretty wide array of products. And then last on the product development and capability building is obviously specialty, building out the 505 B2, building out the value-added medicines, whether it’s long-acting injectables, oral solid, IoDs implants, green propellants as well. So you see a wide array of capabilities that we built over the years. And this — and what it’s really done is deliver on the business. So if you see the US FY ’20, complex generics was 2% of the business, grew to 34% in FY ’25. And if you see again the next five years will grow to 55% of the of the business in the US. In Europe, even more stock, right? So 9% was the composition of complex platforms in FY ’20, 55% at this point of time and growing to two-thirds of the business in — by FY ’30.
I won’t talk through the entire portfolio that has driven this, but obviously, we’ve had some nice launches. We had a tendercept. We obviously held Albitorol in the US in 2020, that we launched in Europe became a big anchor product and then obviously came products like and there’s a whole slew of products, especially on the inhalation side, which have helped deliver this. If you look at the upcoming launches and we were cognizant that we’ve obviously had a good year last year. We have a good FY ’26 as well. What’s happening in FY ’27, it’s actually a good portfolio coming in FY ’27 as well. Three products that we intend to launch on the inhalation side, a couple of products on the injectable side, biosimilars, two products that will come to-market and a couple of important oral solids that will come out as well. And our first specialty product in FY ’27.
Before that in FY ’26, you see injectables picking-up. You see glucogone, you see leraglutide, you see risperidone long-acting that we hope to launch this year. In Australia, obviously, 12, which we’ve launched and another oral solution that we will launch, which will be a key product as well. This is on the back of a good number of products in the market. So again, if you read-through this in, 12 products in the market across geographies, injectable over 10 products, biosimilars, obviously, only at this point of time and the oral solids obviously well over 300 products over-time. And you see the products in the pipeline and inhalation, that’s where we’re all-in 30 products in the pipeline, injectable, another 30 products that are in that pipeline as well. Biosimilars, we have over 10 products in the pipeline and obviously the — all the other dosage forms kind of adds up in the number as well.
If you look further, if you look at FY ’28, you see more of that inhalation, you see injectables, you see the biosimilars coming to-market as well. In FY ’29, you see a whole slew of inhalation products that will come to-market and that’s I think when we’ll get steady on the injectable side as well. So we can talk more about this, but if you see the pie-chart at the bottom, I think those are the revenues of new product launches that will come from complex generics. So the lighter green is — if you see that FY ’26, obviously, products like Old are contributing significantly to the new product revenues, but FY ’27, you see a very large portion, 55% coming from complex generics, similar in FY ’28, 54%, even higher FY ’29, 61% coming from complex generics and even higher thereafter with 62% revenues coming from complex generics in FY ’30.
Quickly on quality. You know, we’ve color-coded this a little differently because we wanted to add the biotechs facility, which is pending a little bit as well. Like we said, we’ve got two sites which have been in a non-satisfactory state of compliance, obviously biotech, we’re pending approval from the US as well. So we put that into the list. Other than that, obviously, the rest of the facilities have been — have been inspected regularly and have good standing. As you would see over the years, I think the FY ’20 was obviously the worst where we had five sites, which were not in a satisfactory state of compliance, now down to two. And obviously, we’ve had a bunch of inspections, so EIRs from about six sites that have been received in the last year. Our goal is one to be best-in-class, two to target all sites to have — to be you know ready at any point of time for an inspection. We we’re looking at really the supply-chain. So it’s not just us, what happens before us with KSMs or API that we would buy. So that’s part of the ensuring quality. And the other part is on training. Can we really use training as a differentiator focusing a lot more on training than what we did in the past.
And lastly, we talked about, we’ve set this global techOps function very good results over the last few years on this. If you look at from a customer focus perspective, our levels are at 100%. We used to be there about 10 years ago and everything we need to at peak, our FTS became 50 million or yeah, it is a horrible number, right? So now our OTF levels are really 100% in FY ’25, even for India, 98%, lowest ever back order, lowest ever FTS. And our focus is on derisking, whether it’s from China, or whether it’s other single-source entities, we are working to build agility into the system so that our lead times just keep getting better and better. That’s our focus. So we’re not done. I think there’s a lot more that we would want to do on that customer-focused path.
On the cost leadership, we’ve talked in the past, $50 million were delivered last year through AVDs, through freight optimization, yield improvement and the like. We’re optimizing our global footprint. Our air ocean ratio is down to an all-time low. Basically, it’s only new product launches that we would send by air, everything else pretty much goes by ocean. So again, the supply-chain is really, really working, including our manufacturing procurement and the like. And the next anchor on this is technology leadership, whether it is AI, digital transformation, we have Kinaxis, which enables the entire organization globally. We have several of our sites, which are fully paperless. And on the backbone of that, you can imagine what you can do with AI today. And now we’re investing a lot more into automation and the like continuous floor reactors.
We started with one or two use cases. Now there’s three or four cases that we are considering, robotics that we’re introducing into some of our plants as well. So very exciting time from a manufacturing perspective. I’ll hand over to Ramesh now for the most important part.
Ramesh Swaminathan — Global Chief Financial Officer
Well, the strategy and of course, the actual operations are very important. Thank you, you, Nilesh. So friends, we are meeting after a gap of nearly three years. Obviously, this used to be an annual event and we were very, very happy to meet everybody, but unfortunately, COVID actually put press to that for some time. But glad to be back-in action in that sense. But it’s not as though we have not been in touch. We obviously have been in touch — in continuous touch for that matter. We still continue with our road shows, we meet with all of you on a one-on-one basis or in groups or in the various broking houses conduct their meets out here we certainly meet in that sense we certainly have been in toucha and Nilesh of course, are focused a lot on FY ’25 and took you through the strategies that we have for the future and of course, give you a glimpse of what we intend doing over the next five years and how we’re going to achieve our goals.
But I’m just going to focus on, in fact, the current year, what have we done in this particular quarter. The momentum for the current quarter was, of course, set a few quarters ago. So the last seven to eight quarters have been — it’s been a period of continuous growth and that’s reflected in the numbers that you see out here as well. This quarter, again, it is great growth across various markets. The good thing about Upin is the fact that it’s been secular growth across all markets and this has come about with the number of the kind of products that we’ve introduced, which of course you will see in the next couple of slides. Equally, there has been good performance across all markets in our — and of course, a lot of focus across various lines and Nilesh spoke about various initiatives that you’ve taken and all of those have borne fruit.
Talking about in fact, this particular quarter, US, of course, we had de. We also had other products, and of course, the in-line products of Spiriva which delivered talk about the advanced markets in Europe, UK, continues to do pretty well and of course, totoring up pretty, pretty good growth. India, this particular quarter, there was in a seemingly lackluster, but the fact of the matter is we lost exclusivity on a couple of products when it came to diabetes and that — and of course the respiratory portfolio, the overall market itself has not performed too well. But clearly, if we compare year-on-year, we’ve done pretty well there as well. API, of course, you know, for the full-year, we’ve done extremely well.
The GI business and API, of course, has done extremely well as well, but it’s a cyclical business in a general sense. But the most important story is really on the EBITDA and the last several quarters, we’ve seen continuous growth. This particular quarter, we ended-up at 23.2%, but this is after taking into account a couple of things. The first is essentially, you would see a INR100 crore increase when it comes to the R&D expenditure and that will be — and there has been a decline in terms of PLI that claim for this quarter is about INR50-odd crores. So you would adjust for these two, the actual EBITDA margin would have been close to about 26%. And the other thing that you should certainly take into account is the fact that some of our adjacencies that we started in recent times are still making a loss.
Obviously, you know, it’s a question of time before they also evolve and grow in size in critical mass and of course, contribute to the overall profits. If you were to take that into account, that would actually be a good — another 3.7 percentage points. So clearly, the EBITDA margins are in-line with in fact the rest of the competition, the peer group, and we are caught on pretty well. For the full-year, of course, done extremely well. Last year’s margins are close to about 19%, full-year, we are moving it at 23.7%. Clearly, you know the momentum has been maintained and more to come as Vinita Nalesh was saying.
Clearly we learn from history and whilst we have come a long way it’s also equally important to see how the magnitude of change really. If you clearly peaked way back-in 2017, 18 when we had products like and and the like and of course, at this time when the entire industry is also doing pretty well. Lupin is, of course at its peak, our market cap was close to about $13.5 billion and the like. But since then, a lot of water has flown and you would recognize that the entire structure of the industry changed quite a bit.
First, we had the enactment of GDUFA, which changed in lots of ways the industry because there were faster approvals and the like. Second is of course, the channel consolidation which happened in America, which of course set us back because it was stacked against the manufacturer, so to speak. But if we move to FY — so then there of course, COVID which stuck and then that’s when actually we also had our own systemic problems in terms of our five of our facilities were under OAI status and because of that, we are not getting approvals. So whilst we had a pipeline of close to about 109 molecules, we unfortunately were not getting the approvals to launch them. And to that extent the top-line was not moving. The actual movement started in 2021 when we got our approvals for Albatrol. And since then, the was back ’22, we actually brought in — we brought in a couple of other products also.
We had in ’22, we had no forget what the product was. But was one of the products then of course, Bravana. Bovana is what we launched in ’22. In ’23, we had products like, which came in. We also had Suprep. In ’24, we had Spiriva and before that we had. And this year, of course, we have Mira. All this has brought in a tremendous change when it comes to intract the top-line. But more importantly, what it did was also increasing the gross margins, the quality of the products, it went up over-time. Whilst we reached in the deal of about 58.3 and this is the time when we are actually plagued by affiliate — affiliately supplies penalties because of that and of course, returns in America because of products and issues and the like.
And clearly, all of this was something that we addressed with the team that that’s out here. And since then, the margins have crept up. The gross margins are now moving up in ’24, we saw it at 66 and this year we closed at 20 — at 69.2 a big increase over the last several quarters. Whilst we focused on in fact the Mojo on the top-line, of course, bringing good products, we didn’t lose sight of in fact the various lines across the entire P&L. And as the leaders were saying, there’s a lot of work done on every line of the P&L. We looked at on the gross margins, of course, in terms of alternate vendor development, routes to synthesis, productivity across various lines in terms of R&D, in terms of manufacturing in terms of our sales force and the like.
All of this actually resulted, in fact the expenses what we brought in-line. You see that we also undertook a mission to actually bring down costs by close to about INR750 crore to INR1,000 crores. Nilesh just mentioned the fact that there has been good success in that and we saw the numbers as well. And you could actually see, whilst in FY ’20, it was about INR30.4% and FY ’21 was the period when you had COVID and there was a reduction in terms of sales and promotion expenses. But since then, a lot of the measures that we took have seen bring these lines back to less than 30%, something that we committed to the investing community some time ago. A lot of emphasis on moving to more complex products and though, of course the R&D spends have been increasing as a percentage of sales, it’s actually been kept constant around 8% — about 8%, though of course, you might actually see an absolute numbers and as a percentage of sales going up over the next few years.
As a result of all of this, obviously, the EBITDA margins have seen an all-time growing continuously. The analyst community would talk to us and talk about the fact that our — our margins were less than the peers, but we have addressed that. And as I was just telling you, we were at 23.8%, thanks to all of this. And if I were to knock-out the impact of in fact the adjacencies and one times and the like, obviously, things would be much more. Capital expenditure has been contained. We address the footprint are still addressing that as well. A lot of the capital expenditure has already been done, not too much actually happening out there. From that perspective, you would also find the free-cash flows increasing.
There’s been a lot of focus on operating working capital. You know, some time ago, we were the darling of the crowd when we actually had happening working capital of less than about 96 97 days. It went up over a time because we look at lost sight of that or for a period of time, but the issue is back and we find that the focus has brought us back to pretty good operating working capital. The operating working capital today is amongst the best-in the industry at just about INR110 crores. And obviously, all of this results in much larger free-cash flows. We are talking about a figure of about INR1,330 crores this particular year-after taking into account all the amounts that we expanded in terms of capital expenditure, the increase in working capital and also in terms of investments for the M&A that we have done.
The — the company is very happy to — you’d be happy to note that we are now a cash surplus company. The overall net-debt of the company has virtually zero. It’s come down to — so it’s the ability to actually raise monies and of course, go in for acquisitions is far superior right now. All of this is of course resulted in much higher ROCEs, which has been climbing over-time. Today it’s a good 22%. It’s still a far cry from what we were about a few years ago, we were 27% 28% and it’s a question of time if we get to those levels. Of course, we would be looking at M&A because clearly, that’s something which is important from our perspective to grow our specialty business. And of course, course, look at growth in India, but clearly there is a lot of focus on ROCE.
We started our ESG journey quite several years ago, but of course, we are not articulating that in terms of our annual report. But today, the last three years, we’ve been to be reporting a lot of stuff on the — in the integrated report and you would find that we have made pretty good progress out there. In terms of a lot of frameworks that are there in existence, we have actually done extremely well. On a DJ Si score, we have scored a high of about 75s last year, which is amongst the top three in the industry. Equally, we have actually got a lot of accolades across various frameworks, on in terms of UNGC, in terms of TCFD and all of that. And all of that is reflected in the various metrics that we keep publishing from time-to-time. In terms of our goals itself, the number of goals that we’ve taken for FY ’30, I don’t want to get married to each of those, but clearly, there’s a lot of focus because we are passionate about it.
We’d like to actually look at a very differentiated way of for presenting this and taking this as in terms of our responsibilities and done a pretty good job there. Some of these are actually mentioned out here in terms of — we’ve done a lot of stuff when it comes to climate change and there has been a 38% reduction — a 23% reduction till-date, whilst the goal, of course, is about 38%. In terms of water, I think we are leading the industry out there and we’ll talk about recycling about 50% by FY ’30. Similarly, there are a lot of other goals that we have taken and — and this is something which is very important from — from a European perspective because there’s a lot of focus on ESG goals when it comes to Europe. So I think it’s taken a bit of a backseat with the current administration in America. Thank you friends and with that I think we just move on to the question-and-answer session.
Questions and Answers:
Ravi Agrawal
Thank you. Thank you,, Nilesh, Ramesh. We open the floor for Q&A. We have an online audience as well. So I mean, I would just request that whoever has got questions could just give the name and the name of the company. And for the people who joined online, there’s a chat box with request if you could just put in a question in the chat box and we’ll answer those questions as they come.
Kunal Lakhan
Hi, this is Kunalia from CLSA. Thanks for outlining the product pipeline for the next five years. That’s quite articulate. Just to back that up, like how do you look at, say, revenue, revenue growth going-forward in FY ’26 and possibly beyond that. Also, I mean, if you can articulate for both India as well as US business? And also on the margin side, right, with the share of complex generics increasing by FY ’30. At the same time, you spoke a lot about the cost-efficiency — cost-efficiency levers that you have. How should we look at on the margin side, margins play-out over the next — in FY ’26 and beyond that as well? Thank you.
Vinita Gupta
Yeah.
Ramesh Swaminathan
So clearly, you know, the buoyancy and the top-line would contribute tremendously because as Nilesh, Vinita were talking about, the pipeline is very strong and given that we would of course expect that to contribute. And there is of course, tremendous focus on cost itself. So as a combination of that, you would expect margins to certainly go up. This year, for example, we have and there’s a host of other products that you lined-up for next several quarters. So the margins would continuously go up and we speak about the adjacencies, I do enough. So we have plans to of course at some point of time in our — they would of course evolve in terms of growth and of course, critical mass itself and start contributing profits.
And if that were to be brought in, you would certainly expect the margins to creep up. Next quarter, next this year, of course, we think it will go up by at least about a percentage point as in the past. And then, of course, it will increase in terms of the way we — the pipeline evolves.
Kunal Lakhan
Sure, thanks. My second question is on — if you — one of the growth levers that you spoke about was a focus on the Nobel drugs, right? With the MFN the MFN policy now, like how should we look at that strategy going ahead? Also on the — the second part is on the tariff side, we do have two facilities in the US and you also in your opening remarks alluded towards, you know if there are enough incentives, you would look at setting up more facilities. What kind of flexibility, first of all, the two facilities offer us in terms of like managing supply chains on some of our key products and then obviously, if you can talk a little bit about how we can — how are we looking at you know setting up any new facilities if possible.
Vinita Gupta
Yeah so I think the MFN will definitely impact the brand side of the business much more than the generic and the focus you know under IRA has been on the highest-value drugs. So it’s really the highest-value drugs that will likely get impacted. I mean, I think that at the end-of-the day, the value of the brand has an impact on the opportunity for generic. So obviously, we track it very carefully. We don’t see a direct impact on our brand products, which are relatively speaking small in the scheme of things. I also think that the MFN hub order would be challenged quite a bit, like it was in the last-time Trump was in the office. I mean, I think you’re going to see litigation. I think you’re going to see big pharma fight it pretty hard.
If they’re going to make the 10s of billions of dollars of commitment to manufacturing in the US to reshoring in the US, they would not accept you know, price pegging to ex-US markets. So I think that there is a lot that’s going to unfold over the next couple of months here. So I’m not very concerned about MFN at this time. As far as tariffs go and our flexibility, what we are willing to do in the US, my first hope is that the bilateral trade negotiation is successful. I mean, we heard the US — the administration talk about the fact that India is willing to reduce tariffs on pharmaceutical steel and automobiles to zero. Hopefully, that is somewhere in the negotiation and means also the tariffs into the US should be at the same level.
Having said that, given the flexibility that we have with Coral Springs as well as Somerset, if there is a need to manufacture essential drugs in the US, we will explore it. We are actively exploring that with the National Security Council you know as part of the White House right now. The government has identified nine drugs that they believe that are essential and we go into a dialogue back-and-forth with them to determine how we can build a partnership between India and the US to ensure to give them the confidence that they will have reliability of supply.
So on our own investments in Coral Springs, we are investing into the Elipta line. We are investing into the line that was already underway even before this administration. So we are continuing to invest in the respiratory franchise. And if there are incentives offered, grants offered to set-up more manufacturing, more — do more development in the US, we certainly will be open to it. We have an active dialogue right now on that front.
Kunal Lakhan
Thank you.
Unidentified Participant
Hi, from Quantum. Just on same note, your views about Medicaid, the House of Representatives cutting cost per Medicaid by day-to $880 million. So what do you think if that goes through, how do we or the Indian generic companies get affected?
Vinita Gupta
Can you just repeat that question?
Unidentified Participant
The South of representative in the US is trying to cut the cost of Medicaid by $880 billion to fund the gap in the tax. So just wondering how — and how could it affect the Indian hemisphere if it does get through? That’s on the —
Vinita Gupta
I think the big part of the CMS spending is on branded drugs. So I think the first impact you would see is on branded drugs. And that’s what they’re trying to do with this MFN clause to negotiate pricing on-brand drugs at a level similar to Europe. I don’t expect it to get to generic drugs very quickly because generic drugs are already a pretty low spend, you know. And we have emphasized to the government as part of the 232 investigation in the Commerce Department that there’s a lot of inefficiency in the supply-chain. When you look at the generic side of the industry, there’s only a small percentage of the value that is that comes to the manufacturer, there’s a big part that goes into the GPOs and PBMs and that’s where they need to focus to be able to gain efficiency.
So I think that is also think resonating with them, they are looking at the numbers and saying this is really, they can see that how skewed the value chain is. And so we think that the PBMs are going to be challenged quite a bit. We already started seeing some of that few of the states have already started disintermediating PBMs. So I think that you’re going to see potentially more negotiation with big pharma on brands. Again, to be seen how that syncs up with the reshoring goal that the administration has and I see limited impact on generics. J
Unidentified Participant
Ust on the India piece, how do you see our insulate acquisition of the Lily drug playing up with Sema when it goes off your comments on that, how do you think you can play that?
Kunal Lakhan
Yeah. We have Raji here. We have Rajiv here. We can ask him to answer. Give it back to us out.
Rajeev Sibal
So as far as Lilly acquisition is concerned, our objective was to acquire human insulin so that we can penetrate into Tier-2, Tier-3 markets also and we can capture that market of insulin there. And now Novo going out as far as insulin market is concerned, particularly cartridges, we expect that we will be able to garner that market-share also, which will be vacated by that. At present, our human insulin market-share is 18%. We expect with this space becoming available, we will be able to garner another 6%, 7% market-share as far as human insulin is concerned. So that’s absolutely our strategic move as far as acquiring human insulin is concerned. Semaglutide, going off-patent, as Vineit also mentioned in the March 2026, we are developing in-house also semaglutide and we have partnered with other partners also.
So we are very much ready once it goes LOE. And we expect that this market is going to go up because once the prices come down, the usage is going to go up like anything. I hope I answered the question.
Unidentified Participant
So you don’t see cannibalization happening if comes in?
Rajeev Sibal
No, apart from diabetes because there is a separate market for GLP ones, there is a separate market for insulin and particularly in obesity, insulin has no roles. So GLP-1s are going to be the ones which are going to play a major role in obesity.
Unidentified Participant
Last one on MIRA background, where do we stand? What is our stance on that right now?
Vinita Gupta
We continue to sell the product. No change. I mean, we have the trial in February and believe that we have plenty of defenses that have a good chance to fight at that point in time. So we’ll find out in February.
Unidentified Participant
And Albitral market-share right now for us.
Vinita Gupta
Sorry.
Unidentified Participant
The market-share for Albitral right now?
Vinita Gupta
Is close to 20%, 19% 20%.
Unidentified Participant
Stable. Thank you.
Unidentified Participant
Hi this is earlier in TV interview, you mentioned 250 million US sales is a new run-rate for you. But just want to understand, you continue to sell Mira and then has come. So why should not be much higher you?
Vinita Gupta
So hopefully it’s higher. We think that we’re going to see pressure on. We’ve already started seeing it. We think Tolvaptin will be a great contributor in the first-half of this fiscal year. But second-half, we certainly expect other competitors to come in. And while our first-mover advantage will be there because it’s a specialty drug, it’s a REMS product. We will expect to give up share. And so it’s really — we expect some products to go down and therefore like and continued growth in Spiriva offsets some of the decline in other products and helps us hopefully grow over 250 a quarter.
Unidentified Participant
Does it look that your first-half will be much bigger than the second-half.
Vinita Gupta
So for the company, it looks like both first-half, second-half would be great. For the US, first-half certainly has a lot more of vaptin than the second-half does. But in the second-half, we have injectables coming in. In particular, the three I mentioned, glucagon, liraglutide and risperidone all come into a tail-end of the first-half, so really have strong contribution in the second-half. We certainly had the US more front-loaded in the year.
Unidentified Participant
Yeah. My second question is on your injectable launches, which you just mentioned. So in terms of your application, what is the current visibility? Like are you like confident about timely launches?
Vinita Gupta
Yes. So we think that majority of these products, we’ve heard recently about glucagon, we have heard recently about Victoza, it’s between July and August that we should get approval. We haven’t heard any different on risperidone in the next couple of months we should get that approved as well.
Unidentified Participant
Okay. Thank you.
Surya Patra
Hello. Yeah. Hi, this is Surya from PhillipCapital Man. My first question is on about the CDMO initiatives. Could you could you share what is your plan there and how would you be positioning your CDMO or CRDMO business while you are having established a generic business here?
Nilesh Gupta
So I think the CDMO market is very mature in the fact that people would pick people for their reputation, for their manufacturing capabilities, their compliance record and the like. I think that the fact that we’re a large generic company as well, I don’t see that as a challenge at least in none of the conversations that we’ve had so-far, we’ve seen that as a challenge. This started with the fact that we were overinvested in API and we had additional capacity, which was available as well. But I think you know with some of the China rhetoric, with some of the alternatives that people have been seeking as well, I think it become a large opportunity.
It’s also an opportunity that we can do at-scale. So I think there’s multiple reasons why we’re excited with it and we need to build. Once we’ve got numbers, we’ll present those numbers get it to scale, but I don’t see anything coming as a challenge at this point of time. We have to build capability though. So I think our key goal was commercial capability, project management, it just operates at a very different level versus a generic company in that. So our goal has been to build that and the team that we’ve built is all from the CRDMO space. So optimistic, but I think we put our heads around work for two years and then talk about good numbers.
Surya Patra
Any sense about the timeline of the progress of this?
Nilesh Gupta
So it’s fully functional. I mean, it’s a separate entity they have a separate office, they don’t even sit in the local offices. So they’re fully functional already. I think the — we certainly want to get a bunch — you know, the entire business is about building a funnel. So we want to build that funnel with a good number for this year as well. I think in the revenues, I mean, it will be nothing meaningful at this point of time. I think in the next two years, it will get to a meaningful number.
Surya Patra
Okay. Second question is about the margin for the quarter that you mentioned,, that after adjustments, it is something like 26% kind of a margin profile for the core business for the quarter. And there are adjacencies also which are currently having negative impact to the overall FY ’25 margin. So two things, what would have surprised this 26% kind of core EBITDA margin for the quarter? And is it Mira only driving that or you can clarify that? Secondly, what the impact of the adjacencies, if you can quantify that for FY ’25.
Ramesh Swaminathan
I said in terms of adjacencies, and this is essentially the digital business, the diagnostics, then of course, the API and of course, the bio business, all of these API, CDA moderas, all of these are still evolving. So if you were to knock-out that impact, it will be about 3.5 percentage points. And in terms of the first part of the question, you actually said, this is — yeah, if I had to — you know, we lashed out in terms of PLI because not last actually capping out because there is a limit to which we can actually claim for any year. So the previous quarter was lower — it was higher by about INR50 crores. This quarter, that’s the impact. It’s about 1 percentage lower because of that. And the higher impact in terms of R&D, I specify that again, the R&D spends are a lot higher.
So if you knock-out that impact, then potentially the 23.2% would have been 26%.
Surya Patra
Okay. Just last one question. There has been a kind of 20% — more than 20% kind of CAGR growth on the R&D spend over the last three to four years that we have seen. And obviously, there are some result that we are witnessing now on the market. Going ahead, what would be your plan in terms of the spend quantum in terms of percentage or in terms of growth? How do you think that as a kind of area of —
Ramesh Swaminathan
You know our R&D expenditure is certainly set to go — it would be — would go up. So next year, for example, I expect at least about 10% to 15% growth out there, principally because of the kind of products that we are working on. So there is a slant towards more complex stuff. Clearly, that will bring in a lot more expenditure as well. If we take account actually close to about 70% to 72% of our spends today is really on complex stuff. It includes biosimilars, the inhalations portfolio, the complex injectables, the 505B2s, all of this and in some parts, the specialty as well. So clearly, that calls for a lot of expenses and therefore, the absolute numbers are set to go up. And as a percentage of sales also, so it’s about 8% right now. So I personally believe that it will be upward of 8.5% next year.
Surya Patra
Okay. Thank you. Just one last clarification, ma’am, from your side, any competition for Spiriva one should think about?
Vinita Gupta
I mean, there are one or two filers that you have filed already but just given how long it took us to get approved, it took five years for us to get approval. Now the FDA would have gained a lot through the interaction back-and-forth. I think the next 12 months we should still be on the sole generic in the marketplace.
Surya Patra
Sure. Thank you. Wish you all the best.
Ramesh Swaminathan
Just to clarify, again on R&D and when I talk about actually EBITDA margin increase next year, it is after taking into account this increase in R&D expenditure.
Surya Patra
Sure. Thank you, sir.
Kunal Randeria
Hi, good evening. Kunal Randeria from Axis Capital. On Vineitas, should we expect Periwa launch in FY ’27?
Vinita Gupta
No actually was one of the FY29 DPI products.
Kunal Randeria
Secondly on-again just a bit more R&D while Ramesh did give some color, since majority of your incremental growth is coming from inhalers, how much of that spend is being spent on inhalers?
Ramesh Swaminathan
We don’t share platform-wise details, but clearly, we’re just saying bundling all of this expenditure relating to complex together and I’m saying as a percentage, it’s close to about 70%.
Kunal Randeria
Sure. And just one more if I can.
Vinita Gupta
I think is probably 30%.
Ramesh Swaminathan
Yeah, I would say roughly about that.
Kunal Randeria
30%, right. Great. And just one more. I don’t quite understand your biosim strategy. So when I look at your pipeline, most of your products are coming when four or five years after the first entrant. So I don’t know, is it more opportunistic because the regulatory barriers seem to be lower now. So just the thought process behind it.
Vinita Gupta
Yeah, so it’s been quite an evolution. The strategy has been evolving on the biosimilars front, just given the market evolution. You know, when you look at the changes that have taken place in the US, it’s really creating opportunity for older products as well for us. I mean, for example,, it’s a very old product, multiple players in the marketplace. But as we’ve had conversations over the last year with the customer-base, the fact that we will come in with a new ASP that’s attractive for providers makes it a very attractive opportunity.
So we really see value in bringing pecfilgrastim to-market, whether we do it ourselves or we do it through a partner is a question mark, you know. We have both options available to us. You know. So when you look at the other products, so if you start looking at the first product we had invested in was, Enbrel. And the idea with was global. We wanted to get into the US market, European market everywhere we can and there is a submarine pattern that appeared in the US that held the product back until 2029. But we launched it in Europe through Viatris and now Biocon as well as other parts of the world through other partners.
In the US, we have the ability to bring the product into the market ourself in fiscal year — fiscal year ’29 is fiscal year 30 actually that the product will come to-market. It will be a material opportunity for us because we likely will still be one of four in the marketplace. So for us, so-far, it has been a learning on the biosimilars front. We’ve tried to mitigate the risk through partnerships, partnerships on the development cost, partnerships on commercialization. In the last 12 months with the changes in the US, we really see an opportunity of going direct into the market with biosimilars. In particular, for products like, certainly, there is an opportunity, but also for the ophthalmic products, the two products that we have on the ophthalmic front, ranibizumab and aflibercept, we have the relationships with ophthalmic distributors right now., which is now Sencora, is 70% of the market. They visit 70% of the ophthalmic clinics.
So we have the relationships in-place to be able to enter that market if we get approval in time and can launch the product.
Kunal Randeria
Yeah. Sure. Thanks.
Vinita Gupta
Yeah. Having said that going-forward, we are now given the barriers are reducing, it becomes like a complex generic play for us. So the focus is on products where the number of competitors are limited or where we can — we can be one of few in the marketplace.
Kunal Randeria
It’s what we need to with competition also increasing in future, the price erosion will be much sharper. We have seen it in the last couple of years that it’s almost like an oral solid where the price been very, very sharp and now it can get even sharper then. So the cost — I don’t know if that costs justify you know, launching this.
Vinita Gupta
Well, so the cost has come down in development. The cost is going down on-market access with these private labels. If you have a private-label avenue like, the CVS, private-label or one of the other private labels, where you’re not creating the commercial infrastructure, we already have the capabilities on the development and manufacturing front. Why would we not leverage it to get products where we are in the first wave of products where we are one of few in the marketplace?
Kunal Randeria
Got it. Thanks.
Neha Manpuria
Yeah hi, this is Neha from Bank of America. Thanks for taking my question. Ramesh, if I was to think about margins after ’26, obviously, ’26 we have helping us and then you have the injectables. As we think about after that, when probably as Vinita mentioned competition,, FTF goes away. Is the margin expansion entirely dependent on the adjacencies turning around given we would continue to invest in R&D?
Ramesh Swaminathan
Yeah, I do see that turning around would of course be a very important part of the whole thing. At some point of time you would also perhaps look at allowing them to kind of spin on their own access by getting a private-equity player or a strategic end to kind of allow them to grow also. But clearly, you know, their evolution and their growth and their profitability is also important, but it’s not going to be the most critical factor from our perspective and it’s going to be really the core of really contributing in terms of the buoyancy on the top-line and other imperatives that you’ve taken — other initiatives that you’ve taken on.
Neha Manpuria
Understood., on your again into specialty. One, what are the therapy areas that we’re looking at this time? Is it different from what we were looking at previously, which was women’s health? Second, from a P&L as well as balance sheet investment, when does the P&L investment kick-in, how much are we thinking we want to invest given the pipeline that you have? And from balance sheet, what’s the number that we’d be looking at committing for M&A or asset acquisition for specialty?
Vinita Gupta
So on the areas of focus, they are very much respiratory and CNS. I mean respiratory, given that we have Zopenex, we have a position in respiratory already. We can bring synergies through development, life-cycle management within our internal capabilities. So respiratory definitely is a big focus, building on what we have and CNS Neurology with Namiscula. We are now doing this study to bring the product to the US as well. That’s multiple times the opportunity of the current product. If you can get other neurology products, they will be synergistic with the infrastructure that we have in Europe as well as what we will build-in the US so those are still the two focus areas.
Opportunistically, look, we look at other areas as well based on the assets that come to-market. Our focus is very much on accretive assets. On a limited basis, we are looking at pipeline assets. On the pipeline front, we obviously want derisked pipeline, so late-stage programs and we’ll want to look at creative structures around it to be able to mitigate the risk-on our P&L. In terms of allocation, capital allocation, maybe I’ll let Ramesh talk about it. I mean the overall allocation is the focus is specialty and India region. Yeah.
Nilesh Gupta
So we have actually drawn very good guardrails in terms of our overall capital allocation policy. So in terms of, for example, the overall debt that we’ll take on the balance sheet, be around the twos to one ratio in terms of EBITDA to debt that is. So if you’re talking about EBITDA of close to about INR5,500 crore INR5,500 crores, then you’re talking about potentially, you know the debt we can raise is about INR10,000 crores, INR11,000 crores. Clearly, we also kind of prioritizing in terms of where we would be putting our monies in. And from our perspective, it’s going to be in India and of course in specialty, though we would of course like to address white spaces in our distribution program across, say, countries like geographies like Europe. And of course, we have also said that when it comes to adjacencies, we would actually strict — restrict our overall involvement to what we actually at the time of drawing up the investment program for various adjacencies.
Beyond that, we would actually involve private-equity houses or potentially a strategic or the like. So clearly, we have — as we also said in terms of financial returns, we would be expecting a return of about 20%, 20% and in terms of a payback period between four to six years depending on the project. So some of these guard deals have already operational and going-forward, we’d be pretty you know, make sure that most of the projects qualify under this.
Neha Manpuria
Thank you. And Nilesh, last one for you. For the India business, you talked about double-digit growth for next year. Given we — just went generic, we had that impact. We had a large tender number in the base. Despite of that, we would be able to grow double double-digit. Would that be a fair conclusion? And what would be driving that growth? You know, is it new product launches? Is there more — you mentioned about 400 to 500 MR addition. So are there new divisions that you’re launching? Just some color there. Thank you.
Nilesh Gupta
Yeah. So Rajiv is here so don’t say anything less than double-digit because he will very happily reduce it to that. But no, so I think we’re really coming into our own in some of these therapy areas. We’ve had all these disruptions on the — on the cardiovascular side. So that’s all played out and the like. So now we are seeing that 30% ahead of market growth. You see diabetes, obviously with this happening, but we’ll still see good volume growth. I think we’ll still grow at a good single double-digit in diabetes as well. Respiratory has been slow in the last couple of years. We’ve launched a new task force for. We’ve got — we’ve expanded our Rode division, which is focused on extra urban as well.
That will lead to growth again as well. So you know, the sum of it all, I think we are going to grow at double-digit and not just for the next year, I think the intent is to grow 20% 30% ahead of the market, we believe the market will grow at 6%, 7% or 8% as the case may be. And on-top of that, if you grow at 20% 30% ahead, you will be at that double-digit. So I think some of this all trade generics, we’ve launched that into a separate subsidiary and that entity is expected to grow at a strong number. OTC is expected to grow at a very strong double-digit number as well. So yeah, I think the, all of this adds up to a good double-digit number.
Ravi Agrawal
So while we collect some of them, the audiences, while we put up a queue here, there are a couple of questions from the people who have joined online. One question is like the US government has expressed a desire to reduce dependencies on PBMs and increase the transparency of drug pricing. And the question which is asked is, does this lead to better predictability of drug pricing? And is it a positive measure from a generic pricing perspective going ahead.
Vinita Gupta
The scrutiny on PBMs?
Ravi Agrawal
Yeah, they’re saying that actually the question is that the dependency on PBMs, the government in the US would like to reduce. And what does that mean that the pricing environment for generics in the US actually improves going ahead.
Vinita Gupta
I think the PBMs are — take a big part of the value. So it certainly improves the opportunity for generic drugs also is a big opportunity for the government to save drug spend. So it’s a combination. I mean, we certainly think that it will reduce drug spend overall because right now it’s going into the pockets of folks that don’t pass it on to patients, not payers either and potentially can help us with generic pricing.
Ravi Agrawal
Sure. And a couple of questions on Mira. I think we did answer some parts of it, but one question is, are we continuing to sell Baground till the litigation dates in Feb? And our added question on that is on the 780, are we filing for fighting against infringement or invalidity? And the add-on question to that is, if you win against infringement, do we have a gate — a pathway to 2030 when the patent actually was of patent.
Vinita Gupta
Well we hope but so the first question was do we continue to sell? Yes, we continue to sell. And two in terms of our defenses is going to be both non-infringement as well as invalidity. And then if you have the opportunity to prevail on infringement only, we like might have a long-term opportunity. So we’ll see.
Ravi Agrawal
A couple of questions actually come. I think Rajiv did answer, but again this concern that with the launch of the generic GLPs in India, there could be some cannibalization on the diabetes side, especially on insulin. And I know Rajev did mention that there are two various different categories, but is there anything else we have in terms of just talking about the fact that our diabetes portfolio, we have visibility and confidence that it will continue to grow even with the GLPs coming in.
Nilesh Gupta
I mean, the market is going to open up, right? But it’s going to take time to shape therapy itself, right? So it’s a near-term opportunity to grow on the GLP-1 side itself. That doesn’t take-away the fact that there is a lot of diabetes in India, a lot of untreated diabetes in India. It’s not like everybody is going to jump onto a GLP-1 product to change where the therapy will headed. Obviously with the genericization price point comes down, access becomes much you know, much more available to people to access GLP-1 products itself. But yeah, I think we’re talking many years out in terms of this. In the near-term, certainly our MTP is talking about double-digit growth on the diabetes side as well.
And to add to that, I think Rajiv talked about insulin, I think the insulin opportunity, I think we can emerge as a very large insulin player. As and especially if we can bring access to Tier-2, Tier-3 towns, I think the insulin opportunity is a very large opportunity and itself.
Ravi Agrawal
Questions to the audience I think we have some.
Unidentified Participant
Yeah, hi. Thanks. Christian here again. Just quickly, Canada $45 million, we are not there, we are launching in India, we are not there in Canada, are we?
Vinita Gupta
No, we don’t have the product as of yet. The team is actively looking at an opportunity of in-licensing, but you know, we have an internal product which will come later into Canada.
Unidentified Participant
And just on the European part, Nanami acquisition, we and French injectable acquisition, just how does it come — we have respital from coming from Nanami. So how does it complement some light as to that question both together, how does it help us or it doesn’t help us at all? Just trying to understand that.
Vinita Gupta
What —
Unidentified Participant
The and the French, we acquired a French injectable —
Vinita Gupta
Medicine?
Unidentified Participant
Yeah. So I’m just trying to understand, is there any benefit both combined because I think so, we call respital culture injectable formed nanomi as far as I remember. So does it help us?
Vinita Gupta
I think they are independent in any case. I mean, anomi is more a platform that we bought for long-acting injectables and it’s a very unique platform. I mean, Consta, of course, will be validation of the platform. It will be the first product that we bring to-market through the platform. But what we’re doing with that platform is really exploring innovative opportunities, 505B2 opportunities. We have put peptides on that platform. We are working on biologics on that platform to see how far we can extend the use of the platform.
But to us, the biggest opportunity with is really the ability to innovate and build a novel pipeline. The acquisition was really injectable business acquisition in France. We didn’t have a presence in France until we bought. So it gives us a presence in France. And on-top of the portfolio we have there, we’re looking at all of the injectables that we have in India, including, but I’m really looking at the broader portfolio of injectables to bring into France.
Unidentified Participant
Last question, all the DPI India coming from Indor. Just a clarification.
Vinita Gupta
So right now?
Unidentified Participant
Future filings.
Vinita Gupta
Yeah the future filings will be a combination of India as well as coral Springs.
Ravi Agrawal
Any more questions from the audience?
Unidentified Participant
Yeah, hi. You spoke about pricing pressure in. Can you elaborate?
Vinita Gupta
I mean with additional competition, you have pricing pressure. So we’ve had some.
Unidentified Participant
And another question to Ramesh. Ramesh, you showed the chart on capex of INR700 crores or INR600 crores kind of run-rate for last several years. But your cash-flow statement shows a capex of INR1,600 crores, INR900 crores for last year, FY ’25, ’24. So what is the difference for that number?
Ramesh Swaminathan
Essentially, essentially the free-cash flow is actually a function of your additional working capital and of course, capital expenditure and the acquisitions. So there have been acquisitions across various paths. So it’s really a function of that.
Unidentified Participant
So these are acquisitions of or intangibles like other than the —
Ramesh Swaminathan
Could have been intangibles. We bought into companies like just mentioned that. So all of those acquisitions that came in. The free-cash flows after taking into account all of that.
Unidentified Participant
I was talking about the capex number. The INR700 crores number which you had showcased for last couple of years on an average versus the cash-flow statement where there is a — the capex number over there. The gap is very wide is what I.
Ramesh Swaminathan
No, so I showed only one figure, which is really the capex capital expenditure on an annual basis. So for four, five years really. And that I think averages about INR500 crores to INR700 crores. A larger chunk was really for maintenance capex and there’s been some expansion in some parts, especially when it comes to biosimilars, injectables in the back.
Unidentified Participant
So you’re seeing the gap between —
Ramesh Swaminathan
You can take it offline again if there is.
Ravi Agrawal
Any more questions from the audience?
Kunal Dhamesha
Hi this is Kunal from Macquarie the first question is on the I think our understanding was that this — this is going to be a long-tail product for us. Has there been any change in that view that we had on this product?
Vinita Gupta
No, we’ve always said that obviously in the six-month exclusivity, we will — we will gain a lot more than the period where we have additional competition. But given the launch efforts and what we have learned in the last couple of months, the specialty distribution — distributors and that market works a little bit differently. I mean, they really like to establish longer-term relationships. So for a REMS product, we expected in any case the tail to be longer and now with the relationship that we’ve established with the specialty distributors, we feel even stronger that we should be able to maintain a high share in the time when others get-in.
Kunal Dhamesha
Sure. Thank you. And second question on the overall impact on our P&L, let’s say, from next three to five-year perspective because we are looking at a lot of shift towards complex generics and specialty. Right. So margins wherever they are right now or ROC, whatever it is right now, where do you see that panning out over next three to five years? Because it also seems that the lot of investments, R&D may be inching up for that future pipeline. But so how should we think beyond FY ’26, just looking at the shift in the business mix that we have put out today.
Vinita Gupta
So I mean, the team has worked hard to really improve margins year-after year and that’s a consistent effort going-forward. I mean, as we look at the situation right now based on the pipeline that we bring to-market, certainly R&D spend on complex generic is up, but also the new product launches of complex generics are up and increasing over the next five years. So we should be able to afford the investment and still grow our margins.
Kunal Dhamesha
Sure. Thank you.
Vinita Gupta
Last question.
Ravi Agrawal
Yeah, I think we’ll take a last question. It’s online. So on semaglutide, we’ve highlighted that we have partnered as well as we have our own version. The question is what is the reason to have both? And is it the reason is to compress the timeline or is there something else?
Vinita Gupta
And do we have a play in the oral solid, the tablet as well as injectable. So the tablet we have internal injectable we apartment.
Ravi Agrawal
Yeah. Thank you. I think if we have no further questions, we’d like to-end. Thank you so much. We really appreciate your time, effort. It’s been a busy day for you, but we’d end this session and looking-forward to seeing you and connecting with you again going ahead as well. Thank you.