Torrent Pharmaceuticals Ltd (TORNTPHARM) Q4 FY23 Earnings Concall Transcript

Torrent Pharmaceuticals Ltd (NSE: TORNTPHARM) Q4 FY23 Earnings Concall dated May. 30, 2023

Corporate Participants:

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Sanjay Gupta — Executive Director, International business

Unidentified Speaker —

Analysts:

Unidentified Participant — — Analyst

Akash Agarwal — Axis Capital — Analyst

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Damayanti Kerai — HSBC — Analyst

Neha Manpuria — Bank of America — Analyst

Bino Pathiparampil — InCred Capital — Analyst

Cyndrella Carvalho — JM Financial — Analyst

Kunal Randeria — Nuvama Group — Analyst

Madhav Marda — Fidelity International — Analyst

Ridhish Shah — Nirmal Bang Securities — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Q4 FY ’23 Earnings Conference Call of Torrent Pharmaceuticals Limited. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes [Operator Instructions]. Please note that this conference is being recorded.

I now hand the conference over to Mr. Sudhir Menon, CFO of Torrent Pharma Limited. Thank you and over to you, sir.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Thank you. Good evening, and welcome to quarter four FY ’23 earnings call. Quarter four continued to witness robust growth in branded generic markets aided by market share gain performance of the top brands and new launches. The branded generic market, which now constitutes 70% plus of the total revenue has grown 20% plus. The scheme of arrangement for amalgamation of Curatio is approved by NCLT, and pursuant to this, the business combination has been recognized with effect from 14th of October 2022, which was the acquisition date, all the appointed date. The financials now reflect the effect of amalgamation effective 14th of October 2022. Curatio is now fully integrated into Torrent.

In terms of financials, during the quarter, revenues were INR2491 crores, up by 17% year-on-year. Gross margins were at 72%. Operating EBITDA margins were 29.2%. This quarter there was a one-time inventory write-off impact of around INR10 crores for one of the COVID product, which we had. Adjusted for that, the operating EBITDA is INR29.6 for the quarter. Operating EBITDA was INR727 crores and grew by 30% on a year-on-year basis. At the end of FY ’23, the leverage in terms of net debt to EBITDA stands at 1.55 times. The Board of Directors has recommended a final dividend of INR8 per equity share.

I now hand over to Sanjay for taking us through the year’s performance of the various geographies.

Sanjay Gupta — Executive Director, International business

So starting with India, the India revenue was INR1,257 crores. We grew by 22% as per AIOCD secondary data. Torrent’s growth for the quarter was 12% versus IPM growth of 11%. For the full-year FY ’23 Torrent’s growth was 16% versus IPM growth of 9%. Growth of strong performance of top clients and new launches momentum and the growth with synergies was bolstered by the integration of Curatio portfolio.

During the quarter, we have launched the Consumer Healthcare platform with a dedicated trade field force to augment our distribution. Field strength at the end of the year was 5,500. Consistent — with the acquisition of Curatio and consistent market-share gain in this business, the company’s IPM rank has gained two runs and now is the sixth largest player in the Indian pharmaceutical market. The ranking was in ’21-’22 was eight, and it is now currently six. Torrent has 18 brands and top-five brands of IPM with 13 brands more than INR100 crores. We expect our India business to continue current growth momentum backed by new launches, Curatio synergies, performance of top brands, and gradually of our consumer healthcare platform.

Moving onto our international territories and starting with Brazil. In Q4, Brazil is the largest revenue territory outside India with revenue of INR318 crores. This represents a growth of 27%. Constant-currency revenue is at we are INR201 million, up by 17%. As per IQVIA for the quarter-ending March ’23 Torrent’s growth is 24% versus a market growth of 12%. For ’22-’23 IQVIA data shows Torrent product growth of 22% as compared to market growth of 15%. We have launched seven brands in the last 24 months and as of today, we have double-digit market share in four of them, in ’23-’24, we plan to launch further six brands three in CNS and three in cardio. Brazil witnessed an all-round performance with market share gain in this portfolio. In CNS, we have 12 brands that grew faster than the market out of which nine grew more than 10%. In cardio diabetes, we have seven brands that grew faster in the market, out of which five grew in double-digits.

In ’22-’23, Torrent added 36 to it’s CNS field force bringing the total number of sales reps from Brazil to 295. Torrent continues to strengthen it’s pipeline with 14 filings and 12 approvals in ’22-’23. Our plan is to increase our portfolio coverage from the current 28% to 40% of CNS and CNB therapeutic areas by ’25-’26. Our generics business is growing rapidly and now represents 12% of our sales.

For Germany, our Q4 revenue was at INR253 crores, up by 16%. Constant currency revenue was EUR29 million, up by 11%. Since the last few quarters, Germany has been witnessing a steady sequential recovery driven by new tender wins and growth in the OTC segment. Incrementally, the company has one tender which shall complement the recovery tender in future quarters starting in H2 of ’23-’24. In ’22-’23, we have launched more than 10 new tests in Germany and a similar momentum will be maintained in ’23-’24. We have also increased the size of our OTC field force in Germany. Torrent’s focused areas will include cost optimization to improve our competitiveness in the tender segment, launching new products, and developing the OTC segment.

In the US, our Q4 revenue at INR280 crores down by 1%. Constant-currency US revenues at $34 million, down by 9%. Growth was impacted by the price erosion of the base portfolio and lack of new launches and the inspection of facility. USFDA recently inspected the base facility and issued a Form 483 with two observations. None of these observations are related to data integrity and there were more repeat observations. We have also received approval for our first onco product from our new oncology facility. Our plan is to continue to file two to three onco products every year. Focus — Torrent’s focus areas for the US shall include getting cadence of its US facilities, continuing to strengthen our product pipeline, and building a niche portfolio with a focus on profitability.

To conclude, I would like to say that we expect to further deepen our presence in branded generic market. We did this by Curatio integration, new launches, and foraying into new therapies and new divisions. Germany shall continue to recovery, continued recovery trend aided by incremental tender wins and OTC and expansion and until the case of our US facilities, our US focus continues to be able to maintain a niche and be profitable.

Operator, we can open the call to questions. Thank you.

Questions and Answers:

Operator

Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Akash Agarwal from Axis Capital. Please go ahead.

Unidentified Participant — — Analyst

Yeah, hi, this is Prakash. Good evening, all. A question on consumer platform. So if you could just give us some broad color apart from healthcare what are the products added or what is the plan ahead in terms of portfolio and what is the field force today on this?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

So, Prakash, we’ve just done a pilot on one brand which is Shelcal wherein we invested in advertisement in four steps and probably would take it pan-India in the coming year. That’s the basic plan. We’ve also identified couple of small products but we’ll start talking about it when we actually work on those products in ’23-’24.

I think in terms of the field force which is basically the logistics support and ensuring the distribution reach. It’s a combination of third-party services plus in-house managers, executives who would manage this. Total combined put together, we are talking about roughly around 250 to 300 foot on the ground.

Unidentified Participant — — Analyst

Okay. Okay. And so, any color that you are adding on what kind of products or brands, you will be adding in future?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Similar to something similar to Shelcal. I would say, Prakash. Another product which can be thought of is Unienzyme, but as I said. I mean maybe one or two quarters down the line will provide you with more colors on the number of products which would get added from here on.

Unidentified Participant — — Analyst

And what is the differentiator here, I mean in terms of pricing, in terms of I mean ODC, so anybody can take it. So it will move to higher savings in costs and better margins. So, what is the game plan here?

Unidentified Speaker —

Yeah, so you’re right. I mean, ultimately the end price doesn’t change, right, I mean, for both the segment the Rx segment, as well as the CHC segment but as I’ve said since the first quarter, we are getting into this platform. As we go forward the things will become much clearer, I would say, but you’re right, I mean, at least as far as the discounts, which we see in the channel, which is approximately 30% for Rx could be lower, I would say as far as OTC is concerned but as I said, we’ll have to wait for one or two quarters of performance before we can really confirm that whether there is a possible upside coming from this channel.

Unidentified Participant — — Analyst

Got it. And on the R&D inch up bit maybe due to rupee-dollar, but where are the efforts now since US is subscale now $35 million? So what are the key focus areas, top three focus areas for our R&D investments?

Sanjay Gupta — Executive Director, International business

So, essentially, top three focus areas includes our branded generics market. So we are doing, a little bit incremental innovations by India. We’re doing a larger portfolio, so between 10 and 15 products in Europe and Brazil and then we’re also doing oncology on a global basis. So there are projects which will work for US, Europe, Germany, and also for the out-licensing business in Europe. So these products are consuming more resources than before. And then there are a few US-specific products. I would say about five to six that are going to be taken up every year. So it’s less US intensive and more global and more branded generic orientation.

Unidentified Participant — — Analyst

Okay. And when you said oncology in your opening remarks. Two, to three products every year, you meant for global markets India, ROW.

Sanjay Gupta — Executive Director, International business

The new product will be for global markets.

Unidentified Participant — — Analyst

And currently, you have any portfolio, which is in the market and also in ROW and other markets.

Sanjay Gupta — Executive Director, International business

So we received the first approval from dealership which is the site of the new plant recently and the product sorafenib and it will be launched in the June-July timeframe.

Unidentified Participant — — Analyst

That is across your ROW markets.

Sanjay Gupta — Executive Director, International business

No, it will be first launched in the US and then subsequently in other markets.

Akash Agarwal — Axis Capital — Analyst

Okay. Got it. I have more questions, I’ll join back the queue.

Operator

Thank you. We have the next question from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Yeah, thanks for the opportunity. Just on Dahej now that I had a few observations. So, how to think about the product approvals per se, I mean, there would be Nomura products UMC arose primarily on account of compliance not being deliquence.

Sanjay Gupta — Executive Director, International business

Correct. You are right. So essentially, it’s still a few months off. So we have to respond to the concerns of the FDA, the two observations, and, then hopefully, we would get the EIR in three months, three to four months after that, and then new approvals will only come three to four months after the EIR has been received. So we’re talking about at least a six-seven month lag from today. So what you would see is that the current portfolio that has been filed from the date can be divided into three buckets. The first bucket is products, which would get approved, but which are still some economic value left, so I would say there is, I mean, others have launched it, but there is still enough pricing power in the market for us to make sense to launch these products. So this will be single-digit number of products. And then our second bucket would be products which are not economically viable. So these products because there’s too much competition or the pricing has gone down to a point where it makes it more lucrative to launch them. So again high-single-digit number of products which we were not launched and bucket number three from Dahej is products which were anyways scheduled to be launched in 2024, end of 2025 and this will be launched on time. So that’s. I would see it but it’s a little way off.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Particularly revenues if you can clarify from Dahej?

Sanjay Gupta — Executive Director, International business

So revenue is not constrained by the plant issue, let me remind we had a settlement and be in the third batch of people who launched or let’s say for instance. It’s really not a concern about the plant issue for M&A. For Torrent, it is not made in the Torrent plant anyway, it’s made at a third party.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

That’s good. And just lastly, if you could share key ratio change and EBITDA for FY ’23.

Sanjay Gupta — Executive Director, International business

So, Tushar, I won’t be able to share the EBITDA because as a policy, we don’t talk about geography-wise EBITDA but in terms of performance, I can say quarter-four Curatio has grown at around 19%.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Yes, this was somewhat at the time of acquisition, you had highlighted about or indicated about the overall sales and margin the present would end upon ability. So are we more or less on track?

Sanjay Gupta — Executive Director, International business

Yeah, yes, we are on track. Last quarter, if — I don’t know if you were there what we had indicated is there is already an improvement of margin by 4% to 5%. And now with the integration already happening or happened, you will see a faster margin accretion happening on this portfolio, Curatio. So whatever we have said we are on track to achieve it.

Tushar Manudhane — Motilal Oswal Financial Services — Analyst

Okay. Got it. Thank you.

Operator

Thank you The next question is from the line of Damayanti Kerai from HSBC. Please go ahead.

Damayanti Kerai — HSBC — Analyst

Hi, thank you for the opportunity. My question is regarding India business. So, first fourth-quarter numbers say like what is base business growth excluding Curatio and if you can split that base business growth into volume, price, and new launches. That’s the first question.

Sanjay Gupta — Executive Director, International business

Yeah, I have the internal numbers with me, so I think India business, we have grown at around 22%, including Curatio. Excluding Curatio, it is around 15%, the base business. The breakup of the growth drivers for the 15% would be broadly 3% is volume, 7% is price and the rest is new products.

Damayanti Kerai — HSBC — Analyst

Okay. And in your opening remarks, you mentioned that new launches will be key, one of key driver for the India business next year. So what are your thoughts on volume and price contribution for 2024?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

I think we should, we should be able to maintain at least 2% of volume growth going forward, but I think, additionally, new product contribution, we expect a higher share from the new product introduction is what we had communicated.

Damayanti Kerai — HSBC — Analyst

And price part whether it will be similar to what we have seen in the prior quarters etc or there could be some change.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

No. I would think. So it should be around the same number for the next year as well because we’ve already implemented the price increases for ’23-’24. So It should be around the same number.

Damayanti Kerai — HSBC — Analyst

Okay. And another question is, now you have launched the consumer platform for India business, which you spoke earlier. My question was a few quarters back, you launched a trade generic business also, right, what is the status of that? And now like. If we look at India bucket, what are your priorities in the audit part and then the consumer part? And then maybe if you can talk about priorities that came up this.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Well, absolutely. So I think as far as the base business is concerned, it’s basically following what the market growth is all about, right, I mean, and as per the historical performance, we try and beat the market by at least 200 basis points. So that’s something which will continue. What we also expect is at least some of the new products which we have launched over the last two years has really done well for us, and, therefore, at least for the next one or two years, the contribution from these products should inch up a little bit more, I would say, so that’s an incremental growth which we see. We’ve carried out, expansion of field force across many of our divisions. That should start playing out now, maybe in two quarters’ time. So that should bring us some incremental growth is what we believe as far as the base business is concerned.

I think as far as CSP is confidence it’s too early for me to comment on this — at this point in time. All that I can say is that there is a pilot, which we have done in four states for Shelcal, and probably, we are thinking of going pan-India for this particular product in ’23-’24. The initial response we see is quite positive and encouraging, I would say, quarter one of this year is is also looking positive in whatever initiatives we have taken as far as CHC platform is concerned.

Trade generic perspective. Yes. I think that segment is small today but again, parallelly growing along with the branded generic piece, I would say, so not very large to talk about but growing nicely. I would say.

Damayanti Kerai — HSBC — Analyst

Okay, three to four years from now, still be like a major part of your business, right? And these two will be say going but still the smallest segment,

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

So absolutely. I think at least for the foreseeable future. That is all it should be.

Damayanti Kerai — HSBC — Analyst

Okay. And my last question is, your outlook for Germany, you mentioned about new kind of tenders, etc. So as we look at current quarter sales as new ways to INR50 crores to INR60 crores number.

Sanjay Gupta — Executive Director, International business

In rupees it is difficult but in terms of euros or so, I would say that EUR28, EUR29 million per quarter seems to be the base for the foreseeable future until new wins or losses kick-in nominally down the line.

Damayanti Kerai — HSBC — Analyst

Again, if I just clarify these tenders open up like every year or like how does the tender cycle work where you intend to participate?

Unidentified Speaker —

There is about 50 to 75 tenders that have rolling opening and closing, so there are tenders which happen every quarter, and the duration of each tender is two years. So once you win or lose your output two-year duration, but it’s happening all the time. There’s a lot of insurance companies and each insurance company has multiple tenders.

Damayanti Kerai — HSBC — Analyst

Thank you. I’ll get back in the queue.

Sanjay Gupta — Executive Director, International business

Thank you.

Operator

Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.

Neha Manpuria — Bank of America — Analyst

Yeah, thanks for taking my question. So the first on the consumer healthcare platform business. Have we earmarked as to how much we want to spend on sort of growing that business given we want to give or take advertisement, pan-India, we are planning to launch more products, so what kind of spend do we think we can have on the consumer business.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

So absolutely, so we worked out a budget. I don’t know at this point whether I can communicate that to you. What I can tell you is, at least for the next two quarters, the spend would be similar to what we have done in quarter four of this year.

Neha Manpuria — Bank of America — Analyst

Okay. Okay. So it’s not, okay but as we go pan-India, launch new products. It’s fair to assume that the spending this through the course of the year.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Depending upon the outcome of what we do, at least for the next two quarters.

Neha Manpuria — Bank of America — Analyst

Okay, got it. In that case. So the margins given of Curatio synergies have come through in this quarter, while there is operating leverage. In India, how should we look at the margin trajectory for the next year?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Yeah, Neha, I think, I would wait for quarter one to get reported to actually provide you a guidance, but as of now, as we, as I see, there is nothing which can, I would say derail the existing margin which we have in quarter four but I would wait for quarter one to come in to provide a full clarity on how the full-year would look like.

Neha Manpuria — Bank of America — Analyst

But is it fair to say that synergies that you still talk about consumer platform spend remaining the same, hopefully, our remediation cost for the US going away, there is scope for margin improvement next year or you would say, you’ll probably see one more quarter before you guide that?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

No-no, definitely there are margin improvement levers, I didn’t say that. The only point I’m trying to make is, let’s wait for quarter one to be reported. So that directionally, it becomes very clear where we are headed for the full year.

Neha Manpuria — Bank of America — Analyst

Understood. And last, on the US business. Historically, we had mentioned that we’re evaluating now with the FDA inspection done. When we say profitable growth with niche launches, does this mean we would scale down the business further from here or is it in the green or at least in the black, and therefore it’s not burning money and we don’t need to do too much, the US, and keep it at the current run rates.

Sanjay Gupta — Executive Director, International business

So I think our strategy for the US, is firstly to stop the bleeding, and which we think will be successful in doing it through a combination of various initiatives including cost-reduction, outsourcing, discontinuations. So there is a complete effort to we evaluate each SKU and to figure out what makes sense to keep manufacturing in-house, what makes sense to take it outside, and what makes sense to reduce, are there any levers to reduce costs? So that exercise has been undertaken, and maybe an ongoing exercise. In terms of new launches from our own plants, as I mentioned earlier, that is still six, nine months away. So we have in-licensed portfolio. So this year we would be launching three to four in-license products. We’ve already, I mean launched some niche products. So let’s see what kind of traction that we will be launching our own portfolio. So I would say the idea in the US is to, firstly, we keep the focus on the bottom line and given the focus on launching new niche products from internal plants and more commoditized products from third parties. So that is the way forward. I’d think in terms of top-line, you give what we get. So it’s hard to kind of project top-line for the US and to tell you where we would be, but definitely, I would say the minimum threshold is, in broad terms in the area where we are and I see us essentially progressing from here, provided, of course, we get the new launches.

Neha Manpuria — Bank of America — Analyst

Understood, sir. What I was trying to understand. Sanjay is we don’t need to, let’s say, rationalize our portfolio to at least stop the bleeding from the business side that part of it is. So a large part of it will all come from cost reduction and all of that.

Sanjay Gupta — Executive Director, International business

Correct, correct. So the portfolio strategy is clear. We’ve already outsourced some products. We discontinued others and this would be our ongoing exercises because as the price erosion happens, you need to revisit that you cannot just simply say, but the idea is not to we don’t need any more capex for the US business, it’s all done, the plants, the strategy, and R&D expenses have already been scaled down. We basically did five around us each year in the last 12 months and then five before that. So the part of resource allocation, the orientation has already been done. So, I would say that but we will continue to find new opportunities in the US and to do opportunistic new business development deal and onco products will be launched globally. So if it works in the US, fine, if it doesn’t, we would recover our costs and make money in other parts of the world.

Neha Manpuria — Bank of America — Analyst

Understood. Thank you so much.

Operator

Thank you. We have the next question from the line of Bino Pathiparampil from InCred Capital. Please go ahead.

Bino Pathiparampil — InCred Capital — Analyst

Hi, just a clarification on REVLIMID. If I heard right, you said you are set to launch with the current wave of launches. As far as I understand, already we have seen three wave, one was last March, then in September, and again in this March. And I believe there is a round of launches happening in September-October this year. So are you alluding to that September October?

Sanjay Gupta — Executive Director, International business

No later than that.

Unidentified Participant — — Analyst

Later. Okay. Thank you.

Operator

Thank you. The next question is from the line of Cyndrella Carvalho from JM Financial. Please go ahead. Cyndrella, the line for you has been unmuted, you may proceed with your question.

Cyndrella Carvalho — JM Financial — Analyst

Yeah, am I audible?

Operator

Yes, you are.

Cyndrella Carvalho — JM Financial — Analyst

Yeah, thanks for the opportunity. Just to understand the consumer health businesses like the objective could you help us understand because at this point in time, you said you have only one product and you would evaluate adding five-six more products through this, but can you help us understand the objective, is it because you want to focus more on the Indian market and given that our US business remains at this current stage. So the idea is to go deeper in India, and that’s why we are evaluating this, or your thought process would be helpful.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

No, I think we’ve been thinking since long I would say. So the first thing what we’ve done is we thought of taking Shelcal as a product to OTC and that’s typically because the new products under the Shelcal brand, which is Shelcal XT has been reasonably doing quite well in the prescription segment, I would say and Shelcal 500 which is the biggest brand within the Shelcal brand, I would say is now being taken to the OTC platform for getting higher-growth because that’s, because I think the major share of Shelcal 500 has been taken by Shelcal XT. So there is an opportunity for us to really expand the Shelcal 500 franchise, right? So that’s something which we have been thinking since long and we have done that In-quarter four now.

As I’ve said, we did a pilot in four states and we’ll be expanding pan-India during ’23 ’24. With this, I think we’re already seeing positive signs in the initiatives which we have taken for Shelcal 500 and there a total five brands, I mean, five products, which we have identified as part of the CHC platform, but as I’ve said that will come start coming maybe two quarters down the line. Once we see a positive sign on whatever we do with Shelcal brand. So that’s the current thinking. I would say, but I think to really talk about how this is going to look at over a three-year period or a five-Year period, it would be a little early for us to really guide you on that. So I would say the correct time would be maybe three quarters down the line when we get a sense of how those initiatives is going, we’ll start talking more about it and give you more clarity on what we are thinking about on this platform over a period of three to five years, I would say.

Cyndrella Carvalho — JM Financial — Analyst

And would it be considered easier to move to the OTC platform in India, you think that is getting easier route nowadays or the system taking time for taking products for OTC sites?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Well, as I said, as long as you are able to generate good growth from the prescription segment, why would you get into OTC right up and so I think basically, it’s very important for you to establish a brand in the prescription segment which has an endorsement by the doctor, right, I mean larger the brand you make, there already in endorsement by the doctor but when you start thinking of taking to OTC for getting of better access, I would say and making the brand bigger. So that’s something which we thought and started off with Shelcal, I would say.

Cyndrella Carvalho — JM Financial — Analyst

And any update on [Indecipherable] what does the makeup OAI we have interacted with the agency asked, and what’s the update there?

Sanjay Gupta — Executive Director, International business

Yeah, so essentially, we’ve already had the regulatory meeting with the agency and we are expecting the agency to have another inspection down the line and until then, we expect the status quo to continue.

Cyndrella Carvalho — JM Financial — Analyst

And just one more from the Dahej point of view, you highlighted that nine months kind of six to nine months time with, but this seems like at least Dahej will be opening up again for us. So FY’25, we should be able to see decent number of launches, you already divided the products in three buckets. I heard you, but I’m just saying some more FY ’25 perspective, should we keep now US market coming back?

Sanjay Gupta — Executive Director, International business

Yeah, I think there’s just one caveat, I would add. So bucket number one, which is a product with remaining economic value, and bucket number three which are products which are anyways scheduled to be launched after ’25. So those would be we would be bringing onto the market subject to revalidation of the market at that point in time, right, as to what the economics look like. As of today, I can tell you that at least the high-single-digit number of growth that we should launch, but I really don’t know where those products will be 12 months down the line, what the economics would look like. So we will reevaluate, but yeah, and secondly, the door would be open.

Cyndrella Carvalho — JM Financial — Analyst

Okay, I’m sorry, and one small clarification. [Indecipherable] FY ’25 launch,

Sanjay Gupta — Executive Director, International business

Yeah.

Cyndrella Carvalho — JM Financial — Analyst

Okay, thank you so much and all the best.

Sanjay Gupta — Executive Director, International business

Thank you.

Operator

Thank you. The next question is from the line of Kunal R from Nuvama Group. Please go-ahead.

Kunal Randeria — Nuvama Group — Analyst

Hi, good evening. So my question is sales post productivity. So in the longer run, do you believe that Curatio sales could generate the same kind of creativity as your own sales force?

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

Yeah, absolutely. I think that’s our objective.

Kunal Randeria — Nuvama Group — Analyst

So in that case, if you look at my question in a different way. So you have added 1,000 people of your own this year. Curatio would have 600 more and Curatio’s structure will be around 400, for next, I believe, right? Yet you have maintained 2% percent kind of margin. So without adding a single person and if I were to just now and maybe a 9 million, 9.5 million that we used to earlier. It seems there’s a huge runway for domestic growth, top to the gross margin. So, is it too simplistic calculation or I didn’t understand you correctly.

Sudhir Menon — Executive Director, (Finance) and Chief Financial Officer

No, I didn’t get your question clearly.

Kunal Randeria — Nuvama Group — Analyst

Okay, sir last year you had around 3,900 people, right and you generated somewhere INR100 crores kind of revenue and productivity was somewhere over INR9 lakhs last year, right? I think and just. Yeah, so now it would have come off, right. You would have added 1,000 more people of you own and 2,600 from Curatio, is that right?

Sanjay Gupta — Executive Director, International business

Yeah, that’s right.

Kunal Randeria — Nuvama Group — Analyst

Thanks. So to your productivity would have now fallen maybe below seven around 7.5 lakhs or so-so if I were to assume that you go back to historical levels of INR9 lakhs nine and in terms of new sales what would still be sort of yet to contribute to those who are historically not run-rate it seems there is a huge runway for growth in the domestic business, as well as 21% of margins there should be still some more upside in the next two to three years. Is that a fair understanding?

Sanjay Gupta — Executive Director, International business

No, no, it’s a fair understanding, I would say. And you’re right, actually, the productivity has fallen down one-notch, I would say based on the expansion and. Curatio new people getting added. Curatio PCPM being very low, I would say compared to our base business. So I agree with you and that’s the way to look at, I mean, having a double-digit growth from here for the next maybe three to four years should improve the productivity and improve the margin. That’s one of the levers, I’ve been talking about as far as the branded business. More specifically, India business is concerned were the productivity improvement improves your overall margins.

Kunal Randeria — Nuvama Group — Analyst

And sir, if I want to sort of consider giving any kind of margin we would like to let’s say, three years down the line that will be comfortable to give at this stage.

Sanjay Gupta — Executive Director, International business

Well, we don’t give any guidance. All that I tried to say is that the branded generic business today for us is 70% plus for the total revenue base and there are two important levers which play out every year for us in terms of margin improvement. One is the price increases which are quite similar, I would say, across all the markets we take. And the second is the operating leverage playing out. I think both put together on a long-term basis, I’m saying, there is a margin improvement potential of maybe 60 basis points to 100 basis points year-on year.

Kunal Randeria — Nuvama Group — Analyst

Thanks a lot and all the best.

Operator

Thank you. We have the next question from the line of Akash Agarwal from Axis Capital. Please go ahead.

Unidentified Participant — — Analyst

Yeah, hi, this is Prakash. Again, just one clarification. So. Curatio margins last year were around 25%, 28%. So when you mentioned, it has increased 400 to 500 bps, so it has crossed the company level, but it is still to touch the domestic level. Is that understanding correct?

Sanjay Gupta — Executive Director, International business

Correct, Prakash, whether it’s yeah, it’s above the overall company EBITDA number.

Unidentified Participant — — Analyst

Okay. And there is a catch-up to do till the domestic business margins.

Sanjay Gupta — Executive Director, International business

Absolutely. And also the integration has happened, it will happen. I think it’d be earlier savings.

Unidentified Participant — — Analyst

Okay. And the second one was on the price hikes. So the price hike impact comes late Q1 or it has already started to come in Q1.

Sanjay Gupta — Executive Director, International business

Yeah, it happens in Q1, I would say maybe by May or June. It depends on the products inventory, which we have at the point of taking price increases but generally, we see a substantial part of it starts flowing from May and June.

Unidentified Participant — — Analyst

Okay. So why that cautious or conservative outlook on margins. So we already on an adjusted basis 29.5%, so ratio inching up and price hikes should go take the margins 30% plus for sure, so. Why you want to see one quarter, I mean, what are we missing here? Anything to be cautious of.

Sanjay Gupta — Executive Director, International business

No, nothing, Prakash and this I’m not giving any guidance on the margins for next year. What I’m trying to say is that, since there are new initiatives, which have been taken, I just want to see what margins we achieved in quarter one, which could be directional, but at this point, I mean, it would not be correct for me to give you any guidance for the next year.

Akash Agarwal — Axis Capital — Analyst

Okay. And you mentioned Q4 expenses already account for the consumer business, which is similar. Would you expect similar quarters expenses in the following quarters.

Sanjay Gupta — Executive Director, International business

For the next two quarters at least.

Unidentified Participant — — Analyst

Okay. Okay. And just one more guidance on understanding on the two databases you showed divergent growth trends. So AICD is showing flattish April data, whereas IQVIA showing up 8%, 10% growth, so I mean, if you could just help us understand how is the growth going to be.

Sanjay Gupta — Executive Director, International business

Let me come back to you on this. Prakash, maybe properly. Analyzing it and then commenting on it.

Unidentified Participant — — Analyst

Okay. And lastly, on the debt reduction plan. So what is the expectation for debt reduction for this year and is a fundraising resolution, if you could clarify enabling resolution? Are you still looking out for assets?

Sanjay Gupta — Executive Director, International business

No-no, so. I think it’s an enabling resolution which we take every year during the same time, right. I mean, so just to have a preparedness, in case there’s some opportunities nothing on hand so far. So it’s a continuing thing which we do every year, so nothing. On I think on the leverage. I think today 31st March, we are at roughly 31.5 times of net-debt to EBITDA. End of FY ’24 we should be less than one, I would say.

Unidentified Participant — — Analyst

So about INR1,000 crores to INR12200 crores.

Sanjay Gupta — Executive Director, International business

Correct, correct,.

Unidentified Participant — — Analyst

Thank you so much.

Operator

Thank you. The next question is from the line of Madhav Marda from Fidelity International. Please go ahead.

Madhav Marda — Fidelity International — Analyst

Yeah, good evening. Sir, have we guided for bonds similar price hike as last year in both 57%. Does it come from taking price hikes in the base portfolio or from our move to newer products are priced higher is looking at this portfolio. So overall sort of price movement is positive. Just wanted to understand that.

Sanjay Gupta — Executive Director, International business

No-no, the price increase. When we say 7%, we say whichever product is existing on the date when you take a price increase. So that becomes a basket for you. So, therefore, on an overall basis, 7% is the price impact, which is going to come. So the new products which are getting launched later on will have its own price depending upon the competition intensity, which is there.

Madhav Marda — Fidelity International — Analyst

Generally, there seems to be a higher end of the call when it comes to prices. Is that just a function of our chronic portfolio or the kind of brands that we have, is that the right thing to think or is there some other factors,

Sanjay Gupta — Executive Director, International business

Yeah. All that I can tell you is that if you look at my covered market, you will generally find the market also taking similar kind of pricing,

Madhav Marda — Fidelity International — Analyst

Okay, perfect.

Operator

Thank you. The next question is from the line of Ridhish Shah from Nirmal Bang Securities. Please go ahead.

Ridhish Shah — Nirmal Bang Securities — Analyst

Thanks for taking my question. I just have one question on the consumer business, we, in the past also started consumer business with Unienzyme, and we closed out that. So just recollect that what went wrong and what we are doing differently this time.

Sanjay Gupta — Executive Director, International business

Yeah, so you’re right. And so, Unienzyme was an acquired brand from Unichem, right, which was under what they see but when it came to us I think what we felt is that it’s very important that you have better doctor endorsement on this kind of brands because you take it through OTC. And therefore, we had taken Unienzyme to a prescription platform compared to the OTC platform which it had in the answer Unienzyme. I’m saying now since the brand has reached a reasonable size we feel this is the right time to now get into this.

Madhav Marda — Fidelity International — Analyst

Got it. And they also Curatio is of one of the key reason that we are looking to the consumer brand, now that we can be — do the same platform opportunity OTC product would be a different market altogether.

Sanjay Gupta — Executive Director, International business

No, I would say Curatio helps us to create bigger. portfolio under CIC, but as I said, even without Curatio, we already had plans to look at CSC on some of our products.

Madhav Marda — Fidelity International — Analyst

Okay. Got it, thanks. That’s it from me.

Operator

Thank you. [Operator Instructions] As there are no further questions, I would now like to hand the conference over to Mr. Sanjay Gupta, Executive Director of International Business for closing comments. Over to you sir.

Sanjay Gupta — Executive Director, International business

So I would just like to thank all of you for participating in today’s call. Thank you very much and wish you a good evening.

Operator

[Operator Closing Remarks]