Aurobindo Pharma Limited (AUROPHARMA) Earnings Call Transcript & Summary

Good morning, and welcome to Aurobindo Pharma Quarter 4 FY '23 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to the management for opening remarks. Thank you, and over to you.

Thank you, [ Ambit ]. Good morning, and a warm welcome to our fourth quarter FY '23 earnings call. I'm Deepti Thakur from the Investor Relations team. We hope you have received the quarter 4 FY '23 financials and the press release that was sent out on Saturday. These are also available on our website. I would like to introduce my senior management team today on the call with us, represented by Dr. Satakarni Makkapati, CEO of Aurobindo Biosimilars, Vaccines and Peptide businesses; Mr. Yugandhar Puvvala, CEO of Eugia Pharma Specialities Limited; Mr. Sanjeev Dani, COO and Head Formulations, Aurobindo Pharma Limited; Mr. Swami Iyer, CEO, Aurobindo Pharma USA; and Mr. S. Subramanian, CFO. We will begin the call with summary highlights from the management followed by an interactive Q&A session. Please note that some of the matters we will discuss today are forward-looking, including and without limitations statements relating to the implementation of strategic actions and other affirmations on our future business, business development and commercial performance. While these forward-looking statements exemplify our judgment and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors may cause actual development and results to vary materially from our expectations. Aurobindo Pharma undertakes no obligation to publicly revise any forward-looking statements to reflect in future events or circumstances. With that, I will hand over the call to Mr. S. Subramanian for the highlights. Over to you, sir.

Thank you, Deepti. And good morning, and welcome to all of you for joining this earnings call. This year has been very challenging due to various factors, namely, challenging macro environment and competitive industry landscape, et cetera. Despite these issues, we have delivered a good result in this fiscal year. We will now discuss the results for the fourth quarter of fiscal year FY '22, '23 declared by the company. For Q4, the company registered a revenue of INR 6,473 crores with an increase of 11.4% year-on-year. The EBITDA before ForEx and other income grew by 2.8% year-on-year and by 5% quarter-on-quarter to INR 1,002.2 crores. EBITDA margin for the quarter was at 15.5% and for the FY '23 was 15.1%. Net profit increased by 3% quarter-on-quarter to INR 505.9 crores. EBITDA margin before R&D is 21.8% for the quarter against 21.4% of the last quarter. In terms of the business breakdown, Formulations business in Q4 FY '23 witnessed a growth of 11.4% year-on-year to INR 5,455 crores and contributed around 84.3% of the total revenue. API business contributed around 15.7% and clocked in revenue of INR 1,017 crores for the quarter, registering a growth of 11.4% on a year-on-year basis led by improved demand for some of the key products. For the quarter, the revenue from the U.S. Formulations increased by 11.6% year-on-year to INR 3,045 crores. On a constant currency basis, U.S. revenue increased by 2% year-on-year basis to USD [ 317 ] million. We have received final approval of 26 ANDAs and launched 10 products during the quarter under review. We have filed 12 ANDAs, including 3 injectables during the quarter. Revenue for Aurobindo Pharma, the company -- Aurobindo Pharma USA, the company making [ oral ] products in USA, has increased by 1% quarter-on-quarter. Revenue of U.S. injectable business in U.S. increased by 3% year-on-year and 18% quarter-on-quarter to USD 71.9 million in Q4 FY '23. The total Eugia specialty sales in the U.S., including the specialty OSD, amounted to USD 81 million during the quarter, USD 81 million. During the quarter, the Eugia performance in various financial parameters are better than that of last quarter. We had a total 171 injectable ANDAs filed as on 31st March 2023, out of which 126 have been received in final approval and remaining 45 are under review or have tentative approval. The company as on 31st March '23 had 774 ANDAs filed with the U.S. FDA on a cumulative basis, out of which 565 are final approval and 34 having tentative approval, including 8 ANDAs which are tentatively approved under PEPFAR; and the balance, 175 ANDAs, are under review. For the quarter, Europe Formulation clocked in revenues of INR 1,660 crores, an increase of 7.7% year-on-year growth. In constant currency terms, Europe business clocked in revenue of EUR 188 million against EUR 183 million of last year for Q4. For the quarter, Growth Market revenue increased by 18.6% quarter-on-quarter and witnessing a growth of 51.2% year-on-year to INR 592 crores. This includes PLI incentive of INR 48 crores against INR 8 crores of the last quarter due to improved sales of eligible products during the quarter. For the quarter, ARV Formulation business clocked in revenue of INR 159.3 crores year as a whole. We reached an amount of USD 119 million against an estimate of USD 120 million. R&D expenditure is at INR 411.7 (sic) [ 410.7 ] crores during the quarter, which is 6.3% of the revenue. This is similar to last quarter R&D expenditure of INR 415 crores. The average raw material costs remained flat [ and saw ] marginal decrease during the quarter, and the freight costs also decreased -- reduced during the quarter. Net CapEx for the quarter is around USD 105 million, of which CapEx for existing business is USD 62 million, including USD 14 million for ANDA [ purchases ], PLI CapEx of USD 31 million and CapEx for new business for new markets amounts to USD 12 million. The PLI cumulative CapEx till March '23 amounts to USD 121 million. The average FX rate was 82.1936 in Q4 FY '23 against 82.10 Q3 FY '23. The average finance cost for FY '23 was at 4% mainly due to availing multiple currency loans. We have clocked in income from investment of INR 74 crores for the quarter, and cumulatively, it is INR 148 crores for the year. This is accounted in other income. This needs to be read in conjunction along with the finance charges. The business generated a free cash flow of USD [ 61 ] million during the quarter as a result of strong cash flow generated during the quarter. The net cash portion, including investments at the end of March 2023, was $194 million. The gross debt is $591.7 million. Our endeavor is to bring down the debt going forward. The high cash was due to some good collections in the month of March '23 by the U.S. business. Board composition. During the quarter, we have inducted one new Independent Director in the parent company and one new Independent Director in Apitoria Pharma, the API of the company. With this, the total number of independent directors in the company is now 5 out of total [ 10 directors ]. Also, we have appointed CEO for the API -- on Apitoria. We will be appointing one more new independent director in Apitoria. Facility centers. Out of the total 8 U.S. FDA-regulated API unit, 6 units got -- have VAI status. One unit recently got inspected. Earlier, it was in VAI status. And the balance [ remains under ] warning letter. We are putting our efforts to get it cleared. All the total 11 U.S. FDA-approved [ FDA units ] are under VAI status as on date. Major plants under commissioning. We have 3 plants, including 1 Eugia plant under commissioning in U.S. Of this, part of the Raleigh facility was commissioned in March '23. The balance is expected to get commissioned by FY '23 [ or ] during FY '25. The China plant is fully installed and is expected to be commissioned in Q1 FY '25. We are in the process of manufacturing the exhibit batches. The [indiscernible] plan, which will produce [indiscernible] is expected to be commissioned by F '23. However, it is our endeavor to complete ahead of the schedule. We are conducting clinical research study Phase III for biosimilar product, and the biosimilar plant is expected to commission by FY '23. So far, including the R&D revenue expenditure in biosimilars, we had invested more than INR 1,900 crores on biosimilars to date. Outlook. While our financial performance in FY '23 indicates our resilience to withstand economic adversity on the back of our strong fundamentals, we remain focused on continuing our growth, and we are cautiously optimistic on the business growth going forward. We are committed to deliver good performance in the coming quarters, while adhering to the regulatory and quality standards. Some of the key focus areas for the coming quarters are summarized as below. Clearly, implementation will be as per schedule as informed earlier. Post the PLI implementation by March '24, most of the major CapEx will be done. To improve the capacity utilization across the plants, we may be doing some debottlenecking on the maintenance [ step ]. We will continue to acquire ANDAs through market authorizations to leverage the existing capacity and our resources. Our differentiated business biosimilars is expected to contribute to margin enhancements from FY '25. New pipeline of approvals will include new high-margin, new generation product categories like peptide biosimilars, et cetera. Pricing has stabilized in the U.S., and there is price normalcy in the market in U.S. Both the R&D costs and logistic costs are reduced during the quarter, overall resulting in emanating a better business situation for the coming year. Eugia continues to do well and achieved various financial parameters, which are better than those of the last quarter. We expect to continue this. We expect to see some good cash generation from FY '27 onwards after capitalizing all the assets which have been enumerated above. This is all from our end, and my colleagues will give you better clarity more on it in our Q&A session. We are happy to take your questions now. Thank you.

[Operator Instructions] The first question is from Damayanti Kerai.

Sir, my first question is on your generic injectable portfolio. For the U.S., we have been seeing sales hovering in somewhere $70 million, $75 million a quarter. And similarly, branded oncology sales is hovering somewhere around $30 million in last few quarters. So how do you see these injectable sales picking up ahead given the approval rate is very healthy? And if you can say like if you'll be achieving your guidance provided earlier with this kind of run rate or you see a pickup ahead?

Damayanti, yes, in fact, like I stick to my earlier guidance of double-digit growth. And as you rightly said, we are doing as per our plan, and we will be continuing our journey with a double-digit growth. And on back of healthy approvals, we feel that it is achievable. And that's on the generic injectable side. In case, Swami, if you want to address on branded injectables?

Sure. Yes. Damayanti, this is Swami Iyer from U.S. So on the branded injectable, that's Acrotech, this is an asset that we acquired from Spectrum. And we have a larger plan here to market other products, too. We are in the process of getting to -- I mean, we have got into business development deals with a couple of other companies, and this could take some time. But right now, we are looking at maintaining this kind of revenue line at about $20 million to $30 million a quarter.

Okay. So you already have some products which you have identified which will be part of a portfolio ahead and then you might see a pickup from current run rate?

Yes, but that could take a little time.

Okay. And if you can also update on status of Vizag plant, which was, I think, mainly intended for European supplies.

Damayanti, like we started doing the exhibit batches in Vizag plant as per plan, and the first filing is expected to be in September '23. And it is not only for European markets and emerging markets, and we have identified multiple products even for U.S. filing because this plant is big and we have lot of scope for expansion. We wanted to use this as a global plant rather than a specific market plant. But it's on track and as per the project time lines because it's almost all the lines are up and running, and we started doing the products.

Okay. And my last question is if you can comment on your R&D spend ahead, how do you see moving it ahead in coming quarters?

So Damayanti, the R&D spend for the year was something like -- for the quarter was something like 6.3%, and the year was around 5.7%. We will be having around something like 6% to 6.5% anywhere. But more than that, I would say we will be incurring around INR 400 crores per quarter is very likely irrespective of how the turnover is going.

INR 400 crore R&D spend...

Per quarter.

The next question is from Kunal Dhamesha.

So first, on the PenG PLI scheme, would you provide some update as to what would be how cost competitive, we would be versus, let's say, the Chinese players? And what kind of scenarios you would have assumed while going for this plant in terms of pricing? Right now, it kind of remains high, but do we expect it to become more competitive once you enter the market?

Kunal, I think this question has been raised in the last quarter. Wherein I clearly said we will be able to give a picture only in the month of November. There is no point in guessing a price which is going to happen in the month of April '24, right? Now, but certainly, we believe with our financial metrics, et cetera, we believe we are very cost competitive, and we will be able to withstand any of the price erosion also. So we will see it only at the time, let's not count chicken before it hatches.

Sure. And then, on the U.S. price erosion, you said in your opening remarks, it has kind of stabilized. -- normalcy has returned but would you be able to quantify what kind of price erosion we saw in the quarter on a sequential basis, on a year-on-year basis, that would be helpful.

On the U.S. price erosion, if you're asked on year-on-year basis, first 3 quarters, we had fair amount of price erosion. And then the fourth quarter was somewhat stable, and we see the continuity. We are right now doing -- I think, we are pretty stable, I would say. If you talk about year-on-year, yes, it was -- first 3 quarters were fairly high. And I don't want to hazard a guess exactly how it is because we had some changes in the fourth quarter and then we had requested some changes. So overall, net-net, I would think we are in a better position today, that's what I would like to say. And today, we are pretty stable.

And, let's say, the trend that you saw in quarter 4, would that have continued in April and May as well?

Yes.

The next question is from Neha Manpuria.

Swami, sir, on the U.S. oral solid business, despite the fact that pricing erosion has normalized, stabilized as you mentioned, lean launches, data shows that Aurobindo is gaining share in a lot of the disrupted products. We haven't seen the commensurate increase in revenue in oral solid. So could you give us some color there? Do we expect more of this to reflect going forward because it's pretty much flat. I think it is up 1% quarter-on-quarter.

Sure. Yes, Neha. So the fourth quarter was -- that's when we got some of the awards, and we have ramped up some of the supplies. I think we would see more of this starting this Q1, and I think the impact would be more than a Q2's time frame. So the quick -- even though we got the awards, we need to give a quick turnaround. It will be a little difficult for [indiscernible] for the kind of [ firing ] that we got. We did see some surge in terms of sales, but it's not completely reflected, I would say, based on the awards that we received.

So do you think the bulk of the benefit of the incremental volumes that we have been awarded will be seen in the second quarter, not even in the first quarter?

First quarter, we would have some, and then need to continue from there. That's what I would say. And if you recall in the last 2 earnings call also, we mentioned that we're also launching some of the newer products. So the new products will also contribute to our top line in the next 12 months.

Got it. And sir, overall, on the market environment in the U.S., do you think these NBO opportunities, as we call them, is more short term? Or do you see this being slightly more part of the base business and not necessarily a onetime opportunity? How would you see the environments?

So the onetime opportunities or onetime opportunities that I'll cleave apart from the NBOs. NBOs have been pretty decent. And I would not assume that these are short term. I would assume that these are medium-term. I think the customers are looking for stable supplies, and we have been able to provide them that.

Got it. Got it. And Subbu sir, on the gross margins, despite the fact that price erosion has stabilized, the ARV sales are lower, injectable sales are higher. We did see a gross margin improvement in the quarter, and we had the PLI benefit. So was there any factor impacting gross margins?

Yes, we had certain one-off items, which has reflected -- reduced the top line item because of some clawback taxes in some of the European countries, which has really reduced the overall gross margin -- sales as well as the gross margin. And this is also one of the reasons. From an EBITDA margin perspective, also, we have taken some one-off write off of around INR 20 crores. So that also have taken. Overall, if you really see around INR 45 crores to INR 50 crores is the one-off items we have taken during the quarter.

Sorry, sir, I missed the number, INR 40 crores to INR 45 crores.

INR 45 crores to INR 50 crores is the one-off items we have taken during the quarter.

This is both on the cost and the revenue?

Yes, both on the cost and on the revenue, maybe in equal proportion, not 30-20 type.

The next question is Prakash Agarwal.

Just question on outlook. Actually, I mean, last 2 years, obviously, I mean, a lot has happened, growth has come down, gross margins have come down and so have the EBITDA margins. Multiple factors, so U.S. pricing pressure, some U.S. FDA issues. So how do you think the next couple of years will shape up? What are the big building blocks, if you can share which segment in your differentiated R&D assets will start coming out first? And how do you see the margin trajectory?

So I'll give you a broad direction and my colleagues will be able to explain in the detail. Swami has already explained that is expected to -- sales is expected to move in the first quarter followed by second quarter also. If you really first quarter and second quarter, there is sales are going to increase, right? If you go into third quarter, fourth quarter, I -- Mr. Yugandhar has already said in the last meeting itself that we will be launching Revlimid, which is also going to contribute to that. And next year, if you really see, starting April onwards, this is Q3 and Q4. And probably Q4, some biosimilar products may be get launched. And next year, by April quarter onwards, we can start seeing that PenG start to delivering, right? That is also there. And plus, we have also started seeing the biosimilar some more -- I mean it's a full year impact starter coming rather than some 1 or 2 quarters -- I mean one quarter impact this year. So I would request then another few colleagues to explain in detail.

I think Subbu, you covered it most of the things from agenda connectables which is under the Eugia. We will continue to grow, and our endeavor is to grow double digit. And we will keep Revlimid as one-off and that will count as over and above the base business for the next 3 years. But base business with the slow of launches and filings, we expect quarter-on-quarter, we should have at least 5 approvals and 5 launches. We just wanted to do 20 launches a year going forward every year, and that should provide us that double-digit growth, and we will keep Revlimid as one-off opportunity.

So you're saying base business U.S., you're expecting double-digit growth in fiscal '24 and '25 on a large base?

That's right. That is for the Eugia business, which is the generic injectable business, yes.

For U.S. generic business, I was asking.

That's right. That is further injectables and specialty products.

Which is $81 million for this quarter, which I explained in the script .

Yes, yes. No, just a little color on the U.S. generic business, ex injectable will also help, sir?

Swami, would you like to take it?

Yes. Yes. Just tend to do that. So Prakash, we have -- we talked about new products coming -- being commercialized during the current fiscal. All that I can say is that we would have steady growth. We anticipate about 40 NDAs to be commercialized during the year, that's a fairly conservative number. And that would add a decent amount of dollars to the top line. And I think we would consistently at least for the next few quarters, you would see this kind of product being commercialized from [ part of the visioned ] approvals that we are expected to receive.

So approvals, we are still getting a lot, sir. I'm just trying to understand a little quantitative idea also that with this high base, can we expect high single digit or at least mid-single-digit growth on the U.S. generic base business? Or given the erosion and the state the U.S. generic market is, that will be difficult? Or with the R&D pipeline, we can manage?

So all that I can say is restabilized. We are able to ramp up volume. There's a good demand. So on an overall basis, I think we should see a pretty decent demand. I don't want to put a number to it, but I think it will be fairly decent. It would be probably in the higher single digits. That's something we expect. And then we don't -- we are very optimistic.

Okay. And Subbu sir, for you on the margins, if you could give some qualitative and quantitative...

I think before that if I request Satakarni to talk about his launches, et cetera, because that is also going to make an impact on the overall margin profile improving in the coming years. Over to Satakarni.

Yes, Prakash. So continuing our journey to build on a differentiated portfolio, one of the key elements to us to achieve margin enhancement in future and also sustainable growth is bringing in biosimilars into the regulated market. So we are fairly confident that towards the end of this year, we will have at least one product in the market. Next year, we see at least 2 to 3 products in the European market with our first filing happening in the U.S. market. So I really see the inflection point for biosimilars to start from '25, '26. The amount of effort that had gone into conducting the clinical trials for biosimilars, we have a robust portfolio of biosimilars. As we talk now, we have 2 product filings, which were already made with European Medicines Agency. We had 3 product filings made with the MHRA in the U.K., and we have 2 product filings with Health Canada. I -- regulatory procedures on the procedural advances to conclude any time between Q2 of this year to the Q2 of the next year, that will bring in a series of launches in regulated markets. . Now staying on the same subject, I'm continuing my guidance for the last 3 quarters, the earnings calls to now, I'm happy to state that we have completed the treatment phase of trial in [ 690 ] metastatic best cancer subjects of a trastuzumab biosimilar, biosimilar has aseptic where our test product was tested for efficacy, safety and immunodensity versus the innovative Herceptin. After the completion of treatment phase and after initial read of the raw data, we are confident that the study, which is a 3-year long study, has achieved a similar object to response rate to that of the innovative's product in women with positive Her2 positive metastatic breast cancer. We are confident that the filing process in emerging markets will begin in June, July. The fast filing will happen in India. We will file with European Medicines Agency by September, and we will file with the U.S. FDA by quarter 4. We are prioritizing the filing of this very important life-saving biologic, biosimilar in India with an aspiration to launch in our country this year. We believe that more women will benefit from this life-saving oncology therapy on the back of extensive clinical data in 690 patients, usually not heard of in submissions that are done domestically. We believe this will give the oncologists and the patients an access to a good and reliable cancer therapy option for treating our women, mothers and sisters. So this is my update on trastuzumab. Likewise, as the discussion is on differentiated portfolio, as the filing process for our oncology biosimilar across markets is slated to begin, we are showing signs of advancing our differentiated portfolio to various autoimmune diseases. Autoimmune diseases is a huge market in the U.S. I am pleased to state that a full-fledged global Phase III clinical trial of a biosimilar to Xolair, we are announcing the name of the biosimilar for the first time. The Phase III clinical trial of biosimilar to Xolair which is omalizumab has begun as our trial sites are being readied now and our subject recruitment is ongoing. The patent expires in U.S. in November 2025. We have followed the due process of submitting the clinical trial plan and application for our biosimilar candidate. And we hope that this Phase III clinical trial, which is a comparative study on the efficacy, pharmacokinetics, pharmacodynamics, safety and immunogenicity, which is being conducted in 600 subjects with chronic spontaneous urticaria. The reason why I bring this up is to tie in this discussion with what Swami is saying. The Acrotech Biopharma, which is our brand business in the U.S. is investing in dermatology. Now if you look at our biosimilars and how we are positioning them in immunology and autoimmune decisions, as to our commercial front end and the business that we are establishing and nurturing in the U.S. with a long view to increase these margins, and to sustain our margins in this business. We believe that this biosimilar presents a sizable opportunity in a potential market of USD 4 billion with very limited biosimilar competition. It is our intent to file this product in 2025 just in time maybe 2 quarters ahead of the formulation patent that expires in U.S. in 2025. Further to stay on the differentiated portfolio, we are strengthening our immunology pipeline competitiveness in the autoimmune therapy segment by kicking off a Phase I 3-arm PK/PD safety study of another biosimilar aimed at treating osteoporosis. This is also immunology biosimilar, this will also fit very well into the portfolio in both our U.S. and European commercial front end teams. A Phase III clinical trial application for this product is being submitted as we talked this week with European Medicines Agency, and we are gearing up to initiate a Phase III trial by Q3 of this year. Likewise, third immunology biosimilars, again, a strong focus of the entire company on differentiated portfolio has already begun a Phase III clinical trial, where we completed around 40% of the recruitment already. We plan to file this product in the next fiscal year in India and emerging markets to start with. So to answer your question, overall, as a company and as biosimilars, we are maturing our R&D so that we can sustain our business in the future, especially with the high on the regulated markets, Europe and U.S.. Prakash, I hope this answers.

This is very elaborate. And some color on the margins will also help.

It will be too early to...

Overall, company level, sir?

Then Subbu would answer that. Subbu?

See, the overall company level, Prakash, if you have really seen last quarter, we ended with around 15.5%. Certainly, we'll not be limping, but certainly, we will go in an incremental pressure. Probably, I don't think a step jump approach will happen this year, right? So incrementally, probably we may be made -- we may not touch 20%, but could be midpoint in this year. It's what my feeling is.

The next question is from Shyam Srinivasan.

Yes. Just the first one on the Eugia. What is the full year number now for the revenue? I think $81 million per quarter also has some global part, which is non-U.S., I assume, and that is for the quarter. So what's the full year number? And did I miss it in terms of the guidance that we're talking about double-digit growth. So the $650 million, $700 million, would that come with generic rev limit on top? Is that how -- sorry, if you can help us reconcile with the past on how we were thinking about this business?

Even though like we don't give specific numbers on Eugia, but I'll just give you a prop guidance in terms of the close around INR 3,300 crores of top line. This is roughly around $411 million this year. This is a flat growth compared to FY '22, but we didn't decline. In fact, in a challenging environment, we could able to grow single digit. And going forward, I'm guiding based on the current pipeline, what we have, that we will continue on this INR 3,300 crores of base. We will continue our journey of double-digit growth. On top of that, development will get added that's how it is here.

Got it, Mr. Yugandhar. So just help us understand on the base business, you're talking about launches, like you said, 20 launches, I think in your previous comment. So I just want to understand how is the -- I think you've got a lot of questions on the oral solid side of things on price erosion, but what is happening on generic injectables? Anything that you can comment. What explains the flattish growth, right? I'm still assuming OSD is a very small percentage of your overall thing and largely injectable. So just help us understand pricing environment on the generic injectables side?

Shyam, like first 2 quarters of FY '23 were really like challenging. And I think the first time when the market opened up, post COVID, the Q1, Q2 of last financial year, this is FY '23. We had almost a double-digit price decline, which was unseen, unheard in injectable and specialty business. But from quarter 3 onwards, things have stabilized. And right now, the competitive environment is, I think, let me put it this way that we are in a good footing with respect to the competitive environment is concerned. And last 2 quarters, the pricing has been almost decline, has been almost negligible. And that is what we feel that going forward with. And also one more thing which is helping us is in terms of -- unfortunately, the drug shortages in the U.S. are at the highest level in its history. And all these things and on top of it slew of launches will help us grow the business. And as guided earlier, our gross margins in Eugia should be between 60% to 70% and EBITDA levels will be around 25% to 35%. It's a broad range. Okay, one quarter, we might be here, one quarter, we might be there depending on how launches will shape up.

Got it. Sir, just a follow-up on Revlimid. Is there anything that you've disclosed in terms of the time line for the launch, how large it will likely be for you in terms of -- because it's a crowded space, is there still elbowroom for everyone, 6, 7, 8 players now? So I just want to understand your thoughts on generic Revlimid?

In generic Revlimid, we already secured the final approval. As per the settlement, we'll be launching in October. But as we cannot disclose the percentage of settlement, so I will leave it there. it won't be a significant part of my revenue. It will be like a pretty good bottom line for my business. And as it is -- as you know, that like this is going to be limited share for multiple players. So we expect the price -- pricing to be stable and it doesn't matter before Jan 2026, whoever, a number of launches happen -- might happen, and but like the only thing is we don't expect -- because each player will be restricted by the percentage of share what we settled for, and we expect the pricing to be stable up to Jan 2026.

Got it. Sir, last question is on growth markets. I think you have seen good bump up there, 18%, 19% quarter-on-quarter growth. So what is driving some of this growth? Is it sustainable? I think 9% now is domestic formulations in India. So some qualitative color on that business.

I've already said in the opening remarks itself. This quarter, we have got good PLI I incentive, I mean, for around INR 48 crores against the last [ INR 48 crores ] Basically, the incentives depending upon the eligible product, which has been approved by the ministry. This quarter, the sales of the eligible products have picked up a lot. And because of that, we got this INR 48 crores, which has helped to take it. But still, we are in line with the overall number of around -- whatever would be the number agreed with the ministry, it is a number which has been reckoned -- achieved.