Lupin Limited (500257) Earnings Call Transcript

Hello, and good evening. Welcome to Lupin Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] Please also note that this conference is being recorded. I now hand over the conference to the management. Thank you, and over to you.

Hello, friends. I am very pleased to welcome you to our Q2 Fiscal Year '26 Earnings Call. I have with me our MD, Nilesh; our CFO, Ramesh; and our Head of Investor Relations, Ravi. We look forward to sharing our Q2 highlights and outlook for the year ahead. We are truly delighted to announce a record quarter with total revenue from operations and EBITDA exceeding INR 7,000 crores and INR 2,100 crores, respectively, for the first time in our history. Our margins have expanded by 750 basis points year-over-year and 470 basis points quarter-over-quarter, reaching 31.3%, the highest level recorded in the past many years. This exceptional performance reflects the consistent growth momentum we have sustained since the beginning of fiscal year '23. Notably, Q2 fiscal year '26 marks the 13th consecutive quarter of year-over-year growth, a testament to the strength and resilience of our business model. Our top line growth, combined with an unwavering focus on operational excellence and compliance across all geographies we serve, has built a robust and sustainable foundation for the future. This quarter's results were driven by broad-based growth across all our key markets, exceptional growth in the U.S., supported by continued exclusivity for tolvaptan, strong momentum in India and solid contributions from both developed and emerging markets. Coming to individual business segments. This quarter represented a notable achievement for our U.S. business as we recorded one of our highest revenue figures to date. This was aided by new product launches like tolvaptan where we continue to enjoy first-to-file exclusivity and also products like Mirabegron and generic Spiriva that offset low single-digit quarter-over-quarter price decline in base products, including albuterol. We are particularly pleased to report successful approvals of several complex injectable products during the quarter. Notably, we became the first Indian company to secure approval for generic Victoza, Risperdal long-acting injectable, the first approval from our Nanomi platform and glucagon, all of which further strengthened our portfolio of complex injectables for the U.S. market. In addition, we expect our biosimilars portfolio to start positively contributing to U.S. revenues from fiscal year '27, and we target to have at least 5 products in the market by fiscal year '30. We are very pleased with the market momentum on the biosimilars front in the recent past with the FDA easing the clinical study and interchangeability requirements as well as PBMs and potentially CMS starting to prioritize biosimilars. Altogether, this sets us on track to double the share of complex products in our U.S. business over the next few years. In parallel, we continue to invest in expanding our specialty portfolio through a combination of organic initiatives and targeted acquisitions. Switching to India. Revenues grew 3.4% year-over-year with the core domestic formulations business delivering a healthy 8.8% growth, translating to 1.2x IPM growth. The overall India number was moderated by lower local tender sales within our global institutional business. Excluding the impact of loss of exclusivity on products like Gibtulio and Ajaduo, domestic growth stood at a robust 10.7% year-over-year for H1. Volume growth remained strong at 5.2%, while the chronic segment now represents 65% of our portfolio, up from 64% last fiscal. Therapy-wise, GI grew 6x its category rate, while cardiac and respiratory grew 1.5x their respective category averages. We remain confident that our India formulations business will continue to outperform the IPM by 1.2x to 1.3x as we have stated in the past, supported by our 10,000-plus strong sales force. With the revival of the respiratory category and exit of mix start in the insulin market, we see near-term tailwinds for both our respiratory and diabetes portfolio. We have over 80 new product launches planned over the coming years, including innovative products from both in-house development and in-licensed. This includes GLP-1s, where we expect to be in the first wave of launches with semaglutide in India and also are working on strengthening our innovation pipeline for the long term. Our other developed markets, including Europe, Canada and Australia, delivered 19% year-over-year growth, with Europe as the standout performer, growing 26.8% year-over-year for Q2 and 27.3% H1. These markets now represent 12% of total sales, up from 11% 2 years ago and are expected to expand further as we roll out our robust pipeline of new products. The planned acquisition of VISUfarma with its portfolio of 60-plus innovative eye health products and established infrastructure aligns well with our strategy to expand our European footprint and build a global specialty franchise. This acquisition expected to close by end of 2025 will enhance both growth and margins, adding diversity across key European markets. It will bring our global specialty business to $150 million annualized revenues next year, starting to build some scale. Our emerging markets grew an impressive 45% year-over-year, led by strong performance in Brazil and South Africa. We are especially pleased with the turnaround in Brazil, which grew 141% in local currency, driven by successful diabetes product launches. Turning to R&D. Our spend stood at 7.5% of sales this quarter, among the highest in the Indian pharma sector, reflecting our focus on complex and specialty platforms. We have over 50 product filings planned for the U.S. with a near-term focus on respiratory complex injectables and biosimilars. Over time, we expect an increasing share of R&D investments to flow into specialty programs and value-added medicines, including long-acting injectables, green propellant-based products and 505(b)(2)s. We also plan to strengthen our innovation ecosystem in India through both in-house development and in-licensing of late-stage assets. On the compliance front, we recently received VAI status for our Pithampur Unit 3 respiratory facility and are actively addressing the OAI at Unit 2. We remain fully committed to ensuring that all our sites adhere to the highest global quality and regulatory standards. In conclusion, while we take pride in our strong results, we remain grounded in our long-term aspiration to build a company for the future, one that is resilient amid challenges, agile in seizing opportunities and anchored in scientific innovation and patient trust. With a clear strategic road map, disciplined execution and a deep sense of purpose; Lupin is well positioned to deliver sustained value for all stakeholders in the years ahead. With this, I'll now hand it over to Ramesh for a deeper analysis of our financial performance. Ramesh?

Thank you, Vinita. Friends, I welcome you all to our Q2 FY '26 earnings call. As you may have seen from the results, this has been a record quarter for the company with the company recording its highest quarterly revenues and EBITDA. We delivered positive results on most key financial metrics, be it growth, gross and operating margins, earnings per share or leverage ratios. As a result, our ROCE is above 25% as at the end of Q2 FY '26. Diving into the numbers. Total revenues from operations, including other operating income for Q2 FY '26 came in at INR 7,048 crores as compared to INR 5,673 crores in Q2 last year, a growth of 24% year-on-year. Amongst the key markets, the U.S. grew by 47% year-on-year. India grew 3.4% year-on-year. Other developed markets have grown 19% year-on-year and emerging markets have grown 45% year-on-year during this quarter. Our GIB business grew by 9% year-on-year. Speaking about the U.S. business, this quarter, the U.S. business recorded sales of $315 million, a growth of 41% year-on-year and 11.5% quarter-on-quarter on a constant currency basis, which is one of the highest we have achieved in this business. This growth has been due to new product launches, offset by low single-digit price decline in our base products and anticipated impact of additional generic competition in albuterol. We are pleased with the progress of our U.S. business, which continues to be a key growth driver. The recent launches in our respiratory and complex injectables portfolio, along with the anticipated entry of biosimilars next year, reinforces our complex generics portfolio, and we remain optimistic about growth in U.S. prospects in the years to come. Turning to India. The India region business grew by 3.4% year-on-year during the year. I'd like to highlight that the core prescription business grew by 8.8% year-on-year during Q2 FY '26 and 8.7% in H1, handsomely outperforming the IPM growth by 1.2x and 1.1x, respectively. In fact, if you normalize for the loss of exclusivity on some of our diabetes products, growth would have been 10.5% and 10.7% in Q2 and H1. Chronic share during the period was higher at 65% with key segments like respiratory, cardiovascular and GI significantly growing ahead of the industry. The share of in-licensed products is only 6% as compared to around 12% in FY '25, which also has a positive impact on our profitability going ahead. Other developed markets. And so far as other developed markets are concerned, revenues in other developed markets was INR 812 crores, representing a growth of 19% year-on-year. This growth was led by 27% year-on-year increase in Europe, due to higher sales in Germany and U.K. from existing products and partnered sales. The recent announcement acquisition of VISUfarma will further add buoyancy to our growth in Europe going ahead. Other emerging markets. Other emerging markets grew by 45% with strong growth in Brazil and South Africa offsetting tempered performance in Philippines. Getting on to the P&L. Other operating income at INR 216 crores has increased by INR 40 crores as compared to Q4 -- Q2 FY '25. This has been led by higher export benefits from PLI scheme recorded this quarter. Turning to the gross margins. Gross margins continued their upward trajectory with Q2 FY '26 at 73.3%, up from 69.3% in Q2 last year and up from 71.3% in Q1 FY '26. This 403 basis points year-on-year improvement is driven by multiple factors, which includes better product mix, lower share of in-licensed products, including higher profitability on loss of exclusivity products in India, increased volumes and other cost improvements and efficiencies, which we have undertaken over the last several quarters. Employee benefit expenses at INR 1,106 crores increased 9.7% year-on-year from INR 1,007 crores in Q2 FY '25, translating to 16.2% of sales as compared to 18.3% in Q2 last year. This change is largely attributable to higher costs due to regular annual increments and business growth during the period. FY '26 manufacturing and other expenses came in at INR 1,980 crores, increasing 18.8% year-on-year from INR 1,667 crores in Q2 FY '25 and INR 1,772 crores in Q1 FY '26, translating to 29% of sales versus 30.3% last year. The expenses are mainly higher due to higher volumes in the normal course of business and certain onetime acquisition-related charges. R&D at INR 509 crores is 7.5% of sales as compared to INR 448 crores in Q2 last year, with almost 70% of our R&D directed to its complex portfolio. For the full year, as indicated, we expect R&D to be around 7.5% to 8.5%. Turning to the EBITDA. EBITDA, including ForEx and other income was INR 2,138 crores vis-a-vis INR 1,308 crores in the same period last year, an increase of 63% year-on-year with a margin of 31.3% vis-a-vis 23.8% last year in the same period. On a quarter-on-quarter basis, margins have expanded by 470 basis points. This margin expansion is on the back of higher gross margins and a lower fixed cost. We expect full year EBITDA margins to be in the range of 25% to 26%, higher than our earlier guidance of 24% to 25%. Whilst we expect business to continue to exhibit robust performance, overall margins in H2 would be tempered by higher R&D spend and a lower PLI income. Turning to the tax rate. The tax ETR is expected to be about 20.9% for H1. For the full year, we expect ETR to be around 21% to 22%. Relating to working capital. Operating working capital stands at INR 7,730 crores as of 30th September against INR 6,821 crores as of 31st March '25, which translates to 102 days of working capital against 106 days in the previous quarter. Net cash stood at INR 1,665 crores as against INR 310 crores on 31st March 2025. Whilst we focus on increased cash generation for our business, we would like to highlight that we continue to explore strategic allocation of our capital to address the long-term vision of the company, including on the specialty front. We have also announced planned investments in the U.S. at our Coral Springs site to cater to the anticipated increase in demand, especially for our respiratory products. On the ESG front, we reached a remarkable milestone with an S&P Global ESG score of 91 in 2025, reflecting a 15-point improvement over 2024. This achievement positions us not only as a leader in the pharmaceutical industry, but also amongst a very select group of global companies to surpass the 90 mark. This underscores our deep-rooted commitment to sustainability and responsible growth. With this, we open the floor for discussions.

[Operator Instructions] The first question is from Kunal Dhamesha. Kunal, can you hear us?

Yes, I can hear you now. Can you hear me?

Yes, yes, yes. We can.

Congratulations on a strong set of numbers. The first question on the U.S. business. Now that we probably have seen a good amount of tolvaptan in this quarter. How do we see this $315 million number moving in the coming quarters? And also what are the key launches that we are looking at both in second half of FY '26 and first half of FY '27.

Yes. So on tolvaptan, we have 180-day exclusivity. So that's into next week, and we would expect some competition, but we also believe that the 2 competitors that we're expecting, not both of them may make it. The TAs are delayed. We don't see any TAs as of yet. So we do think that we are going to get more of a runway. Plus if we look at tolvaptan conversion so far, we have seen 30% of the market convert. So there's still a lot of room for generic penetration on an expansion of the market overall for both for us as well as new entrants. So as we look at the next couple of quarters, the second half, we certainly think that we'll have some erosion from this $315 million. But we should be close to between $275 million to $300 million per quarter to close over $1 billion as we have guided in the past. And then in terms of new launches, just recently, we launched the authorized generic to Ravicti, which is a material launch for us. We are about to launch the Risperdal Consta product in the next couple of weeks. We have an upcoming goal date for pegfilgrastim, for which we had a recent inspection at the biotech facility, feel pretty good about that. So that should be coming up. Victoza was just launched. So we'll see the ramp-up of that. So injectables, certainly, Ravicti plus biosimilars into the next couple of quarters and then ranibizumab next year. We feel pretty good about maintaining -- sustaining $1 billion-plus level into fiscal year '27.

And second one on the EBITDA margin guidance for FY '26, which we have raised by almost around 100 basis points. But how to look for the FY '27, how should we kind of look forward to the EBITDA margin for the year?

So clearly, we expect a reduction in the second quarter, but we have also said in the same breadth that there would be an increase in the R&D expenditure. But we do expect the R&D expenditure next year to kind of normalize a little vis-a-vis in fact, the second half. And given the fact that we expect at least some of the products to kind of sustain the momentum, we would think that we would be able to close at around 24%, 25% next year as well. And there's, of course, opportunities in other parts of the globe like as in India with semaglutide and the like. So from a sales perspective, we think there would be growth, albeit it's going to be a little lackluster from a comparison perspective vis-a-vis the current year. But overall, there would be able to kind of keep the margins that we are speaking about.

Sure. And then one last, if I may. In terms of the recent inspection at the Nagpur facility, have we submitted our response? And how important is this facility for us from a future growth perspective, specifically from FY '27 and FY '28 perspective?

Sure. The audit was for our injectable facility. So we've obviously submitted the response. And I think the next update where we've made a lot more progress actually goes in today. So we feel -- I think we are not happy with the observations, but we believe that they are addressable. So we're obviously putting our best foot forward at this point of time with the response, and we hope that it will suffice. It is important, I think, both for our injectables, which we're just starting to build at this point of time and some of our biotech products as well. So the facility is important. And obviously, we want to keep it in a state of good compliance. So yes, I mean, it's important. And obviously, we're going to do whatever it takes to get it to the finish line.

Sir, can you share the number of ANDAs from the facility, which are pending?

I mean we've just started our injectable journey. So I think we've just got a few approvals and we file 5, 6 ANDAs every year. So I mean, we're not talking about a very large number yet, but I mean it's a key part of what we want to build going forward.

We'll take the next question from Bino Pathiparampil.

Congrats on a great set of numbers. We need to get an idea on tolvaptan. Could you compare the revenue Q-o-Q? Would 2Q tolvaptan revenue be double of 1Q level or more than that, something like that?

So Bino, we don't give product-wise guidance, but needless to say that tolvaptan has been a significant contributor in Q2.

Okay. And how is mirabegron? Does it fluctuate quarterly? Or are you maintaining a roughly same run rate?

No, mirabegron has also grown quarter-over-quarter.

Okay. And so how do you think about that product? In February, there is this hearing? Do you expect a decision around Feb, March itself? Or is it likely to go on for some time?

So it's hard to predict how the judge will rule, but -- or the jury will rule. But based on the trial that we have seen so far, I mean, in the case of MSN, that settled and Ascent last week. We feel pretty good about not really seeing any new entrants in the near term. And then as the trial date comes closer, we'll see how the rest of the competitive base is going to really factor in the risk for the launches. But we also feel good about the fact that our case, where we have a number of defenses on the non-infringement front, we feel pretty good about it as the trial comes closer.

Okay. Sorry, my question was specifically, once the trial starts in Feb, do you expect a final decision in your favor or against whatever it is within a month or so? Or is the trial likely to go on for months?

Usually, jury trials don't go on for months, but the decision from the jury is hard to predict if they're going to make the decision right away.

Understood. Okay. One last question on EMEA growth, very, very strong numbers growth, partly helped by currency depreciation, I assume, but even adjusted for that, it's very strong. Anything in particular that is driving that?

So Luforbec continues to be a very strong performer. We continue to grow our share in Luforbec in the current countries where we are already present as well as in new countries that we have launched. And raltegravir was also a good contributor to revenues in the quarter. So both respiratory as well as other products.

The next question is from Shyam Srinivasan.

Yes. Just one on the VISUfarma acquisition. If you could walk us through the strategic rationale. I think the presentation also talked about being accretive to margins. I can see some of the margins, but just the thought process on that acquisition? And what does it essentially add to our portfolio?

So one, I mean, we have always said that we are under-indexed in Europe, and we have significant potential headroom there, but didn't have the right presence, market presence. We have presence in U.K., Germany and France very recently. This adds Italy and Spain to us. So that's number one. And with the infrastructure that we gain, we also have the ability to launch the Lupin portfolio into those countries, even though the business that we're acquiring is ophthalmics, right? But with the infrastructure you get, especially the common resources, our team is also confident of launching other products into these markets direct as opposed to partnered business that we do in Italy and Spain like countries. Second, ophthalmology as a specialty franchise is one that we've been excited about the last couple of years. We have been looking at multiple assets, both in U.S. and Europe. And this VISUfarma, we had gotten to know the company over the last couple of years and track them very closely and really liked the momentum that they had built, both on the commercial front as well as the pipeline front. So it really sets us up very nicely to build the ophthalmology franchise, both in Europe as well as potentially the U.S. and other developed markets going forward. Third, I would say that we have synergies on the pipeline portfolio from VISU into other markets, in particularly the emerging markets, Mexico, where we have an ophthalmic business, other countries in Latin America, Southeast Asia, and we're looking at the potential also in countries like Canada and Australia. We intend to bring the VISU portfolio to as many markets as we can. So a combination of expanding our footprint in Europe as well as building on the specialty franchise with ophthalmology and operating leverage through global maximization of portfolio.

Just double-clicking on your opening remarks, Global Specialty sales expected to reach $150 million. So I'm assuming EUR 50 million actually comes from here. But what is the rest of the things? And I'm assuming some of it is in U.S. as well. So if you could walk us through that as well.

Yes. So we have Xopenex in the U.S. That is our one brand in the U.S. right now. We hope to be able to build on that. We have Zaxine in Canada for IBS, and we have NaMuscla in Europe.

Got it. And the time frame for this $150 million would be fiscal '27, is it or later?

That's right.

[Operator Instructions] We will take the next question from Saion Mukherjee.

We have seen very strong growth in some of the emerging markets like Brazil, South Africa, you mentioned and also in Europe. How should we think about the growth because the numbers are very high. So is this number sustainable first? And on this pace, how should we think about growth, if you can take us through in these markets and what will drive that?

So Europe, in particular, I mean, we have a pretty strong portfolio pipeline of products for the next few years to drive growth. And we would love to grow 20% plus every year. But I'd say at least on a 3- to 5-year basis, we should see higher than the company average growth rate in countries in Europe, facilitated now with the VISU acquisition as well. In Latin America, Brazil, in particular, we had -- it really has been a turnaround aided by a really good product launch in the diabetes franchise, dapagliflozin as well as this week, we got approval for empagliflozin. So we are hopeful to be able to drive growth in Brazil on the diabetes franchise overall. South Africa, we've really turned around the business again. It was flat over a couple of years. We have restructured the portfolio. We have doubled down on products where we see potential of growth going forward and are hoping to sustain the growth rate that we have in the current year in the next few years ahead.

So Vinita, all put together, you're expecting like double-digit constant currency growth across all these key markets?

Yes.

Okay. Okay. And my second question would be on biosimilars and respiratory. If you can take us through the key milestone that we need to watch out for? You mentioned 5 products commercialization in biosimilar till fiscal '30. If you can take us through the products and time line and also on the key respiratory filings where we are and what's the time frame for commercialization?

Yes. On the biosimilars front, pegfilgrastim is in the next couple of weeks. I'd say we have a goal date in end of this month. And so that will be our first one. We have ranibizumab middle of next year on the goal date and feel pretty good about that one because I think we are the first prefilled syringe filed in the U.S. Also currently, the 2 biosimilars that were on the market are out of the market presumably to -- because of pricing concerns and probably will come in at a different price point. So that presents a really nice opportunity. Then we have the on-body product, pegfilgrastim that we've made progress on, and we'll expect that to be third to market. And fourth will be EYLEA, building on the ophthalmic after the ranibizumab launch. And the fifth will be etanercept, our first biosimilar that because of the patent -- submarine patent in the U.S. is out to '29, but we'll expect to launch etanercept as well in the 5-year time frame. So those are the kind of the products on the biosimilars front. On the respiratory front, we are making progress on Dulera that we've already filed. And we are pretty far along now on Respimat with Spiriva Respimat product and hope to really, by the end of this fiscal year, provide more of an update there on the concrete dates from a filing perspective. And we're also making progress on the Ellipta franchise with Breo, Trelegy as well and Anoro, all 3 products are in development. And then we have made substantial progress on the green propellant front, especially for Europe, where with Luforbec, the green Luforbec is an important part of our 5-year plan in the European markets, plus Trimbow, we have actively under development as well as other U.S. products, we have green propellant versions in development as well that give us an opportunity to quasi brand them like -- figure out if we can position them at a different -- in between generic as well as proprietary brands.

Okay. Just one clarification, Vinita. I mean, all these products that you mentioned, should we expect filings in FY '27, that is next fiscal year?

Maybe not all of them, but it's a good percentage of them.

We'll take the next question from Neha Manpuria.

Ramesh sir, on gross margins, how should I look at it given we had a lot of moving parts and benefit in this quarter? From a full year perspective, based on what happens to tolvaptan, what should be a reasonable assumption for gross margin levels?

So this particular quarter, there was essentially tolvaptan factor and also because of the fact that loss of exclusivity on a couple of products in India. So once it turns generic, clearly, margins also increase because the margin percentage increases. So that's the story in so far as current quarter is concerned. Clearly, we're working on a number of initiatives in terms of [indiscernible] development and stuff like that in terms of moving the -- wanting to move the gross margin line. So there could be a decline. But having said that, the -- so if you're guiding for, in fact, the EBITDA margins being around the 24%, 25% mark, this obviously takes into account the fact that there could be a slight reduction in the gross margins line, but made up in some ways through operating leverage and other parts.

Understood. And Vinita, on biosimilars, something like, let's say, pegfilgrastim, which is already a competitive market. Ranibizumab [indiscernible] said that you've seen players exit because of pricing. What do you think of -- how does Lupin see itself positioning competitively to gain market share there? And from a commercial front end aspect, do we need to spend incrementally to get that infrastructure in place in the next year for ranibizumab and pegfilgrastim. And in your assessment, what could be the cost for that?

Yes. So on pegfilgrastim, actually, there's been a lot of interest from partners that are in the oncology space already. And just given the dynamics of the biosimilars market where a new product coming in even after multiple competitors can set a reasonable ASP, we see tremendous opportunity. In terms of share, certainly, it's going to be a smaller percentage compared to other products where we will have limited number of players. But in terms of dollars, it should be a nice contributor into the next couple of years, fiscal year '27 as well as '28. So pegfilgrastim in particular, we have planned to partner. So we're not going to build any commercial infrastructure. But on the ophthalmic front with ranibizumab, where, again, we see an opportunity of launching at a reasonable price, I'd say, that gives room both for the providers as well as for us as a manufacturer. We expect to have some infrastructure to be able to sell through to the ophthalmic distributors and also ensure that we get the fulfillment. Given the fact that we have 2 biosimilar products, both ranibizumab and EYLEA, we're going to make not a material, but a small investment in commercial team that can position the products.

Yes, sorry -- what would be the time line for EYLEA, Vinita?

EYLEA is fiscal year '28 or '29. I think it's at the tail end of '28, early '29.

Okay. Understood. And from capital allocation, I think in the opening remarks, there was a mention of investing more in specialty. Given the investments we have in ophthalmology with VISUfarma and also separately NaMuscla in CNS, will this be the 2 areas that we would focus on for incremental deals in specialty? Would that be the road we would go down to? Or you're open to looking at other therapy areas as well?

So we are focused on 3 therapy areas. Respiratory continues to be a focus just given the scale we have in respiratory, both U.S., Europe, other developed markets as well as India. Second, NaMuscla in neurology, CNS is an area that we'll continue to build. But so far, on that front, we are building on the DM indication so that we're continuing to progress the clinical trial on the DM1 and DM2 indication for global, in particular, U.S. and Europe commercialization. And then ophthalmology is the third area that we have actually looked at in the past, but VISUfarma gives us a nice start, and we'll continue to build on the ophthalmology in U.S., Europe as well as other parts of the world.

[Operator Instructions] We'll take the next question from Shashank Krishnakumar.

First on risperidone, which you plan to launch this quarter. I wanted to check if this is a shared [indiscernible].

So we believe that we should be the next one in and Amneal that has also got approval will launch later. But yes, so we will have a shared exclusivity with them and they can launch certainly when they get approved.

Okay. And on mirabegron, I think I missed your comments. So our base case is no incremental competition in the [indiscernible]. Is that the right understanding?

No, base case is that we will have some competition. On tolvaptan -- did you say mirabegron or tolvaptan? Sorry. Mirabegron, yes, our base case is no additional in the near term.

Just the last one, if I could, please. On Dulera, have they responded [indiscernible] process of responding.

Yes, we have responded.

We'll take the next question from Surya Patra.

My first question is on the India business. Obviously, you have mentioned that excluding for the LOEs, the growth is really strong, better than the industry trend. So when would we start seeing the normalized growth momentum like the -- or exclusive of the kind of impact what that has been there so far?

So I think for the next quarter. So H2 onwards, you'll see stuff normalized. I think the entire effect of the exclusivity and stuff is done. So you will see it from the next quarter.

And in the meanwhile, I think the growth of the industry itself has muted. So do you think that is having some impact to the overall industry growth trend in the domestic market and hence, your growth may not be double digit, anything of that sort, sir?

I mean for H1, the market grew 8%. So I would say that the industry is pretty decent from a -- the market is pretty decent from a growth perspective. From our perspective, we grew at 8.8% in Q2, 10-plus percent if I take out the LOE part. Again, our big therapy areas are growing strong double digits. So -- and importantly, we're seeing strong volume growth as well. So I'm cautiously optimistic on the market.

Okay. Okay. My second question is about the respiratory business. While there are multiple movements that we have witnessed, so like moving parts basically, one is that we have indicated about a long-term investment plan of around $250 million in the U.S. So that is one. And simultaneously, we have also kind of adapted the Solstice propellant for our inhalers. So whether this -- the Honeywell Solstice propellant for our inhalers. So how is this changing the business opportunity or any competitiveness or the scope? If you can discuss that part also, if you can, that would be helpful.

Yes. One, I'll address 2 different questions. First on the investment in the U.S. that we announced the $250 million, a combination of both CapEx as well as pipeline is for the Respimat as well as Ellipta franchise, which we had planned to commercialize from our U.S. Coral Springs site. So that is the investment in terms of pipeline, all the products on the Ellipta franchise, all the products on the Respimat franchise, plus we're going to have an MDI line as well that gives us the access to government business in the U.S. also helps us diversify our risk a little bit on the MDI front with albuterol as well as other MDIs in the future. So that was part of our plan already and has got very positive response from all the stakeholders in D.C. that we have talked to. So the fact that we are investing in the U.S. has been received positively. On the green propellant front, we see a number of opportunities, both in Europe as well as the U.S., maybe in the near term in Europe, but also in the long term in the U.S. You see the large majors like, companies like GSK, AstraZeneca as well as [indiscernible] in Europe,, all have been working on low GWP weight propellants, just given all the concerns of climate change. And we expect that end of this year, we expect Ventolin to be filed with the new propellant in the U.S. They already have been multiple filings in Europe. So we see it as an essential part of our strategy on the respiratory front to continue to sustain our growth on the respiratory franchise. Plus there's an opportunity also in products where the brand doesn't do it for us to differentiate ourselves. For example, in Xopenex, we are the brand, and we have the ability to bring a green propellant Xopenex on the market and differentiate ourselves and build the brand further. So we look at it as a really nice opportunity to continue to grow the respiratory franchise in U.S. and Europe.

Whether this will have any implication on the albuterol franchise, ma'am?