GlaxoSmithKline Pharmaceuticals Limited (500660) Earnings Call Transcript & Summary

Hi. Good evening, everyone. This is Darwin Daes, your moderator from Chorus Call. Welcome to the GlaxoSmithKline Pharmaceuticals Limited Q3 FY 2026 Conference. From the management at GlaxoSmithKline Pharmaceuticals Limited, we have Mr. Bhushan Akshikar, Managing Director; and Mr. Juby Chandy, Chief Financial Officer. By participating in this event, you consent to the recording, distribution and publication of this event. Kindly note that this call is meant for investors and analysts only. [Operator Instructions]. I now hand the conference over to Mr. Bhushan Akshikar. Thank you, and over to you, sir.

Thank you very much, Darwin. A very good evening to everyone. Thanks once again for joining us this evening for the Q3 conference call. Starting off from where we left last time when we announced the Q2 results, at GSK India, we continue to be anchored around the commercial ambition, which is around focus, innovation and agility. We continue to be a broadly diversified company operating at both ends of the spectrum with a significant general medicines portfolio with leadership positions in therapy areas like anti-infectives, dermatology, pain and most importantly, vitamins. In the prevention space, we continue to move month after month over the last several quarters with the vaccines business, both pediatric as well as the adult vaccination space. What's new and relevant is our foray in the specialty side. Over the last couple of years, we've clearly stated our intent of significantly improving our presence beginning first with our respiratory specialty portfolio. And now over the last couple of quarters, our foray in the oncology space. And that's where we will continue to build our energies in the coming 3 to 5 years. Can I move to the next slide? I'll start off first with the performance of the General Medicines business, which is still a significant portion of our top line revenues. Just to give a frame of reference in terms of how the market continued to behave. After a couple of soft quarters, the last quarter, Q3, we saw even the external market bumping up. And when you look at our represented market for GSK, we did see a fillip where the external market grew almost in the range of 9%, in line with the acute market where we primarily participate. So on the left-hand side of the chart, if you look at where our majority of portfolio operates, the acute market roughly stood at about 8.6% growth. That was after a muted Q2, driven by all the variables, both volumes after a couple of quarters, we've seen volume growth coming back into the positive area and a good smattering of price and new introductions. If you look at the middle table, which is really the space where most of our products participate, the therapy areas, anti-infectives after a significantly suppressed Q2. In Q3, we saw anti-infectives coming back to almost a 4% growth. And then coupled with this, we did see areas like vitamin spin and most importantly, vaccines growing in significant numbers. The last chart on this slide is on the right-hand side, where compared to the represented market, the specific therapy areas where we operate and the brands in those represented markets. So that's where overall, we delivered a growth. The next slide, Para, a growth of 10%, which was slightly above the market. And as I said, this quarter, after the last 2 soft quarters was an area for us to come back, led by two things. One, the interruption that we saw on the supply front for the last 2 quarters is now done. We've clearly seen from Q4 onwards, we will definitely have no more supply constraints. We did have some specific areas, and we'll talk about that. But in the GenMeds portfolio, if you look at our performance externally, we have Evolution Index more than 100, which means we did better than the market for majority of our brands. On the vaccines front, we've continued to grow share as well as improve our ability to get more benefits with our both pediatric vaccines as well as the adult vaccination space. Over the last 2.5, 3 years, all our efforts around creating the adult immunization space continues to move from strength to strength, and that's where we've now pivoted towards the cardiovascular metabolic disease opportunity to further talk about the bidirectional nature of shingles prevention and the CVMD space. Last but not the least is the specialty area. Trelegy Ellipta continues to occupy the central space in the triple closed single inhalation therapy. And Nucala had a, again, a significant quarter with almost 100 patients month after month, every single month in Q3. So that's where we were. I think, as I said, the most significant for us from a portfolio standpoint was -- this was the first full quarter where we had our oncology portfolio available, both Zejula and Jemperli indicated for ovarian and endometrial cancer, respectively. I think the bigger news for us was the regulatory approval in the second half of December, where now we have approval with the RUBY-1 trial of first-line endometrial cancer. So from almost 800 eligible patients for second line, we now have almost 6,000 patients as eligible patients for endometrial cancer in first line. So that's the most significant impact we will see moving forward as well. On the digital pathways that we have clearly articulated over the last couple of years now, we continue to do cutting-edge work on our omnichannel strategy. So if you look at beyond our sales reps' time in the clinics, we continue to have both face-to-face as well as digital connections and touch points. We do reach out to a significant number of HCPs digitally. And for the quarter, we had almost 4 million touch points, which were above, including the face-to-face interactions. Next slide. Yes, Juby, you will go.

Yes. So good evening, everyone. I'll begin with the top line. This is a milestone quarter as you would have noticed, this is the first time for a quarter, we are closing INR 1,000 crores with a growth of 8.1 percentage stand-alone basis. And on a consolidated basis, we are working close to 10% growth. Now what's driving this growth? If you see the General Medicine business is back to growth, all the key brands, Augmentin, Ceftum & T-bact growing double digits. Specialty portfolio, this is the first quarter of the oncology launch. In addition to oncology launch, we have Nucala as well as Trelegy driving the growth in specialty. Ped vaccines portfolio continued to deliver strong growth, 11% growth for the quarter. That's led by Boostrix, Varilrix and Havrix. These 3 brands are growing double digits. So broadly, you're seeing across the portfolio, you're seeing very strong growth and market share gains as we are under the activities and supplies are pretty much back to pre-supply level. Shingrix continued to gain the market share, like Bhushan explained, especially we are engaging with more HCOs as well as HCPs with our CVMD strategy. EBITDA front, it's a fantastic quarter with 35.9% margin, which is a 520 basis point improvement, 5.2% and a growth of 26.7%. You see the levers. We continue to improve on the gross margin front. Secondly, we've been containing our cost. Disciplined cost control has been, again, another good quarter on productivity improvement. And this growth is also on the backdrop of one-off labor cost impact of INR 11.8 crores. Profit after tax, you can see the same trend continuing. On the EBITDA and the PAT, there is interest and depreciation, which is helping us to even go to 27.3% margin with 290 basis point improvement. EPS growth of 9% in the quarter. The cash position is quite healthy with INR 2,426 crores. Go on to the next slide, please. So this is one slide we've been trying to share in the last 2 or last 3 meetings. Where are we heading towards our portfolio is from established business to Shingrix, Nucala Specialty and now on to the oncology. What does it mean is we are getting into the high category growth. And if you see on the profitability, our profitability has been improving steadily over the last many quarters. We are at 35.9% and 3 years back, it used to be at 24.3%. And the highlight again on this is the competitive performance. We continue to maintain competitive performance, improving our market share. And with this portfolio transformation, profitability improvement and market share gains, we are at a good place for the quarter. Maybe we can open up for the questions.

[Operator Instructions] Our first question is from the line of Mahesh Himchanpurohit from HJ Securities. How do you see the innovative pharmaceutical industry growing over the next 5 to 7 years? Also, what role do you think biopharmaceuticals will play in that?

Thank you very much, Mr. Purohit, for, as always, wonderful questions. Clearly, there's a stated -- explicitly stated intent for the pharmaceutical industry to move from being a pharmacy of the world to a research powerhouse. And that's where I think the evolution will continue to move from established medicines to specialty and super specialty. Clearly, given the number of global clinical trials happening in India as well as discovery from some of the Indian players, I clearly see the biopharma space only expanding. If you look at a data point of the announcement in the budget of the biotech fund, clearly, most of the energy will be spent by players across the board in this area. And that's where if you saw Juby's last slide, even at GSK, we have a very strong and a robust base of our general medicines and our established vaccines business, which will continue to be relevant. But on top of that, I think the growth will certainly come from biopharmaceuticals. And that's where even our company will move in the same direction to bring innovation at pace and at scale. So clearly, I think that's an explicitly stated intent as well as action for companies like ours so that we reduce the launch lag that our patients typically see in terms of those innovative launches happening globally and when they get launched here. So that's the first part. I think even the second part of your question, I think I've answered partly. But clearly, I certainly see, given the ecosystem that all providers, including the government are trying to establish, a large part of the growth will happen on the other side.

Our next question is a text question from Mehul Savla from RW Equity. Are current EBITDA margins sustainable? What is the impact of recent budget announcement relating to duty-free import of cancer med? And what is the total employee strength? And how much is the field force? What are the expansion or addition plans?

Thank you very much for all three questions. I think the first question is around the EBITDA. As we all know, we typically don't give forward-looking guidance. As I've always said in all our meetings, our endeavor will be to hold the margins and stay competitive and sustain these margins as opposed to spending any time to improve. If that happens, it's an outcome. But I think our first priority will be to maintain the margins that we've now been able to sustain over the last 3 years. So that's the first one. The second one is in terms of the budget. Yes, there were some announcements around reduction of basic customs duty. We already had some customs duty reduction for some of our assets. This time around, we've not had any of our products getting included, which -- for which we will definitely be making representation to the relevant authorities. But that's where we are. We didn't get anything extra on this announcement. So that's the second question. Your third question was around the productivity and the number of employees. We have roughly about 3,000 employees across the enterprise. And within the sales organization, we have about 2,000 employees on the ground, and that's something that has remained over the last 2 years. As I said, we have unlocked significant value with consents from health care practitioners where we reach out not only face to face -- by a face-to-face interaction, but also unlocking value through the omnichannel through digital ways of working. So that's where we are currently. We have about 2,000 people on the ground as our sales reps. I hope I've answered all three.

Our next question is from Finnacle Institute. [Operator Instructions].

Am I audilbe?

You're audible.

I have three questions. Firstly, on the Augmentin part, we had some disruption because of the CMO partner having a plant in the fire. So how is the status now? And have we seen normalization fully restored? Secondly, in terms of MIP for the -- I'm assuming key raw material for -- I think one of the -- Augmentin's combination drug and the key raw material is amoxicillin. So because of the MIP, do we sort of see any impact in terms of our margins? Number three, in terms of our vaccine business, we have -- you spoke -- in the presentation, you've spoken about 80% growth in Shingrix. So what sort of annual run rate we are at as of now? And lastly, in one of your, I think, news articles, there was a mention of INR 8,000 crore top line in a few years, 4, 5 years. So can you give some sort of a -- in case you are willing to speak about it, can you give some sense how are we planning to achieve it? What sort of product pipeline? And are we are expecting to launch?

Sure. Thank you very much. So your first question was about the fire at the CMO, contract manufacturer organization. Just to correct small correction, it was not the Augmentin site at all. It was a site which was manufacturing products like Calpol, Cobadex CZS and a few others. And those are the products that were impacted for almost 3 quarters, including Q3. So we did normalize largely by mid-November, December, but we still lost sales. There were supply constraints to the tune of roughly about INR 25 crores, INR 30 crores, sharing off almost 3% of our growth on our top line revenue. So if you look at our underlying growth, it should have been in the range of 11%, but the good news is we have now resolved those issues. And from a supply continuity standpoint, all the required remediation that was required at the site is done. We work very closely with the CMO to ensure that in Q4 and beyond, we have -- we are now building up inventories. So that's the first part to your question. I think I made a note of all three.

Second one is...

Second was on the MIP.

Yes, so MIP will not have any impact on our -- the [indiscernible] lab has been included, but there is no impact for GSK in terms of the margin and the EBITDA and the gross margin. So we don't see any impact of that second one. I'll take that last question first before I come back. So I think, yes, we did articulate a clearly drawn out strategy of doubling the business. And I think the thinking is very simple. This organization has to grow in the range of 12% to 13% annually over the next 5 years so that we can double the business from where we were in '23, '24 to the point of becoming INR 8,000 crore business. So I think 2 or 3 elements are very important. I think our base business, as you've seen, has continued to get that kind of tailwind, both the GenMeds and the established vaccines business. So I think the growth platforms, namely Shingrix, which we launched and to your earlier question, the growth came from a pivot that we've made towards cardiovascular metabolic strategy, as I said, where there's a clear bidirectional nature and linkage of shingles prevention and cardiovascular events. So that's something that we are now focused on. I can give you a rough estimate, but I think we are touching almost 9,000 to 10,000 patients every month. So in terms of volumes, it was almost 100,000 doses that we sold for the whole calendar year of last year, and we estimate that number will only go up as we close out our financial year. In terms of value, it roughly translates around INR 70 crores, INR 75 crores. So that's where we are on a calendar basis. The last question around the growth strategy, yes, as I said, the base business will continue to sustain with the things that we are doing. But I think the significant impact will come from our new portfolio. This year, we also have a couple of oncology assets lined up, including belantamab, which is Blenrep, which is for multiple myeloma. So that's another asset that will get activated in the next financial year, this calendar year, but the next financial year. We have a couple of assets coming up in oncology. We also have assets coming in the liver disease area. Again, first of its kind potential functional cure in liver diseases like chronic hepatitis B infection. We just had the first readout globally in the month of December. So clearly, these are the 2 areas which will set us up in terms of the growth platform for this company over the next 3 to 5 years. So that's where our strategic intent of continuing to grow the business by the double-digit number remains intact.

I have 2 follow-ups. Just to clarify, did you mean that the INR 75 crores is the CY '25 Shingrix top line? Am I correct?

That's right.

Okay. And secondly, can you give some sense with the launch of Zejula and Jemperli, what sort of run rate is it practical to achieve with the kind of traction you have seen? I mean it is probably a little early but I think we are -- I think nearly, I think, 6 months of launch since August. So can you give some sense what sort of run rate is practical to achieve a couple of years down the line in these 2 products?

Sure. But I think it will be a premature assumption on my part to give you. But I think clearly, the first 3 months since we launched it on Independence Day, the whole idea of getting freedom from gynecological malignancies with the pivot with these 2 innovation-led molecules, both Jemperli and Zejula, respectively, in endometrial and ovarian got launched. As I said, the first quarter that we were available, especially Jemperli, which is dostarlimab, was indicated only for second-line patients in endometrial cancer. And that eligibility pool was just about 800 patients. As I said, the last -- second half of December, which is the end of Q3, we got the approval for the first line in endometrial cancer. And that pool of eligible patients is almost 6,000, 7,000 patients available. So it's not going to be a like-to-like comparison. What we did in the first quarter is a great start, but I think it will only get better as we move forward. I think our intent will be to ensure that as many patients of this pool of 6,000 available for first-line endometrial can get the benefit with this remarkable asset, which incidentally has the RUBY-1 trial clearly talks about this being the only monoclonal antibody, which has got progression-free survival as well as overall survival benefit. So that's where our intent will be. Moving forward, we also have indications in rectal. So that readout should happen in 2026 calendar year, not in the financial year. So each of these indications will open up new opportunities for us as we move forward. So I think, as I said, it will be a comparison of apples to oranges if I were to hazard a number and guess it here. But I think the intent is to ensure that as you would be aware, oncology is a high-growth area. One of the highest growth is in oncology and almost 20%, 22% is the therapy area growth annually, crossing almost INR 10,00 crores, INR 11,000 crores now. And our ability, therefore, to make the most with these innovative assets with the current indications as well as the trials that are ongoing, unlocking each of these indications would be intact. So I think that's where we are with these 2 assets.

Sir, would you like to share your name with us, please?

My name is Ahmed.

Thank you. Our next question is from -- is a text question from Julie Mehta from B&K Securities. She has three questions for us. The first is, what is our current PCPM?

Are you going to give all three questions or...

Sir, you can proceed with the first. I can follow with the next 2 later.

Yes. So clearly, if you see where we stand, it's in -- we have a seasonality component because obviously, a part of our portfolio is acute. So especially around Q3, our PCPM per capita per month productivity goes up significantly because that's the season really. But we have one of the highest productivities per rep. So if you just look at our top line revenues and the 2,000 reps that we have on the ground, it's a substantially high number compared to the peer companies or other players.

Our second question from Julie is, how many MRs do we plan on adding in the near future?

So Ms. Julie, I think we -- over the last 2 years, I've been talking about our ability to, therefore, do a lot more unlocking digital. So it doesn't mean that our reps are any less relevant. Our reps remain absolutely relevant, but we are supplementing and complementing everything that our reps do with digital touch points. And that's where this field force of 2,000 that we have largely in general medicines remains intact. I think where we will keep expanding is the specialty areas. So we just launched our oncology business with a team of key account specialists as well as product specialists. We will be -- we are now working to launch our hematology team in the coming few weeks and months. So that's where some of the additions will happen on the specialty and the super specialty front. But currently, what we have in General Medicines and the established vaccines business is -- I think we are really reaching out in terms of coverage of the potential that we have. I think we are at the right sweet spot. So I don't see any need to expand right now.

Our third question from Julie is, can you also throw some light on how is the acceptance this time around with new onco launches among oncologists? And what is our strategy to see greater acceptance?

So I think it's a great question. And within oncology, if you look at clinical outcomes and the biggest one in that is the overall survival benefit. If you were to ask any oncologist, at the end of the day, if you're able to add extra number of years to that any one patient, I think that's the holy grail in oncology. And I think when you look at the readouts that we have, when you look at the data published even for dostarlimab in the RUBY-1 trial, in the intent-to-treat population, it's one of the few or probably the only one which has got well articulated and established documented overall survival benefit. So I think that's where we are making a significant impact. Both health care practitioners, caregivers and patients with every passing month are gaining confidence with this therapy. And I think that's what will separate us in the coming time. We will remain focused on creating evidence generation, both at the local level as well as using some of the global trials that are happening in India. So that's what will further create the impact that you just talked of. So I think the first 4, 5 months that we've seen, every month, we've been growing from strength to strength. We have almost 250 patients who are currently on treatment with Zejula and Jemperli as assets. So the idea is to move it even further in the coming months.

Our next question is from Vamsi Hota from ASK Investment Managers. The first of three questions is, on the pipeline, what are some of the key assets under trials that you plan to launch over the next 3 years and in which therapy areas?

You can give all the questions together. Give all the questions, please.

Darwin, do you have all the three questions?

Certainly, sir. We have the second question. The second one is, is it a fair assumption to assume that the gross and EBITDA margin profiles of our injectable assets are higher than the regular portfolio? And the final question is, as in the case with some of the MNC peers, is there a risk that the parent entity of GSK could launch any assets directly in India instead of via GSK Pharma India?

Thank you very much for all three questions. So I think, first of all, I'll take the last question first. I mean, if you see the demonstrated evidence, we've had both Zejula and Jemperli being launched through the listed entity. So I don't see -- we've got data points to prove our intent and that will stay. I'll connect that with the first question on the pipeline. So clearly, if you look at the global strategy, it is really to strengthen our expertise in the area of immuno-oncology, and that's where there's a lot of ongoing work. We have the next generation of ADCs as they are called antibody drug conjugates. So those are clearly a part of the remit that we have for India. So there is a compound called B387 that will -- that's slated for trials in India across indications. So over the next 5 years, at least 12 to 15 indications for this antibody drug conjugate that we have. As I said, the immediate here and now would be belantamab, which is Blenrep, which is indicated for multiple myeloma. India was a part of the global clinical trial. So as and when the readout happens, the first readout happens and there's approval, marketing authorization in some of the established markets, we will go concurrently. The intent is to launch it in the coming financial year, probably Q2 or Q3 latest. Apart from that, we also have trials ongoing in the vaccine business. So we have a trial for RSV, Respiratory Syncytial Virus, which we've completed. That's another asset that will complement our efforts in the adult vaccination space. On top of that, as I said, one of the focal areas for us as a company is this whole area of liver disease. So whether it is bepirovirsen, which is the first functional cure for chronic hep B infection. The first readout happened in December, as I said. So that's another one where, again, India was a part of the global clinical trial. So we will be using the Indian subsection of data to submit to the regulators. So that's another one. Plus, we have a couple of other compounds in the liver disease area, including a molecule called Efimosfermin. India was again -- India is again a part of the global clinical trial. So these are the 3 big areas where we will continue to unlock value by getting these innovative assets into India through the same entity. I hope I've answered all three. I think the second one was around gross margin and EBITDA for injectables.

So base business margins are slightly more than the injectables as the cost to launch the assets are heavier. But as of now, if you're thinking about diluting the cost or changing the cost profile or the margin profile is not going to -- you're not going to see any impact because the size of the base business is pretty huge to make any impact on the margin profile.

Our next question is an audio question from Monika Bhaskar. [Operator Instructions].

Am I audible?

Yes.

I think I just want to indicatively tie up the comments here and appreciate a lot of new launches, specifically from the India listed entity that has helped us to kind of boost the growth numbers for us. Now when I understand that we have an aspiration to hit INR 8,000 crore top line and when I just tie up with your comments that we want to double this revenue from where we started or left at FY '24 ending also. Now to my mind, reaching a INR 7,000 crores, INR 8,000 crores top line from here on would indicate north of 20% CAGR in the next couple of years. While we do have that as one of the targets, you'll also see that maybe 12% to 13% is the growth aspiration we want to execute on. Just help me understand where truly is the realistic scenario here? I know we'll obviously target for much more. But given all the moving parts, specialty business, vaccine launches, where do we kind of look to take this business forward from here on?

So it's a very good question, Ms. Monika. So Ms. Monika, I've been saying this for the last more than a year now. And the context was simple. If you remember, we are in the second year of our second century of commercial operations in India. It was established in 1924 in India. And when we were completing our century of trust in 2024, that's when I said that if our base of '23 was a certain turnover, should we be waiting for the next 100 years? Obviously, no. What will it take for us to fast track? And that's where the intent of doubling the business comes from. So when you look at where we were end of '23, '24 and then scope it out over the next 5 to 7 years, that's the -- that's where you frame the reference and talk about the 12% to 14% growth. Now if you look at the base business, which is still substantial for us, whether you look at the GenMeds or the established vaccine business, that market will still -- if you look at the prognosis, that market will still continue to deliver a high single-digit growth for us even you to scope it out over the next 5-year period. I think the growth platform that I talked of, and I just articulated and you've got demonstrated evidence of the kind of opportunities that exist in the specialty, super specialty space, especially in oncology, especially in unmet needs like liver disease, that's where we clearly see a breakaway in terms of not only holding the growth numbers in the range of 8% to 10% for our base business, but really having those boosters, so to say, for this enterprise with those new launches. So that's where the context is of moving from the number that we were at '23, '24.

Just a follow-up here. When we say that GenMeds and the base portfolio would be growing at high single digit. Now when I -- Shingrix, for example, today has become INR 75 crores brand as we speak of as we highlighted. Now can we have amongst maybe the next -- let's say, we aspire to launch 5 new launches to 6 new launches over the next 7 to 8 years. Do you fairly believe that with the pain potential in India, we can have a INR 500 crore plus brand of these newer launches because that is what will it take to reach the aspiration where what are we hitting for?

Sure. First of all, Monika, you make a good point. The Indian consumer or Indian patient is not just cost conscious. I think she is value conscious. So if you are able to get innovative therapies, which bring the right value for those patients and those health care practitioners, and we've seen loads of examples, including of Shingrix that we have in our portfolio, where patients are willing to pay that price. I think secondly, we've always had -- in India, we've always had an India-centric pricing approach, including of the assets that we've talked of. So I think that sweet spot is something that we've always focused on in terms of pricing, including with the oncology portfolio, I think the patient assistance programs that we have, we talked about this last year when I had my media briefing. So I think these -- when you triangulate these three, we remain absolutely confident of what we've said in terms of the aspiration and the objective that we've set out.

Monika, maybe please request you to announce your organization name as well?

Yes. [indiscernible]

Our next question is from Aejas. [Operator Instructions]

Am i audible?

Loud and clear.

Sir. My name is Aejas. I'm calling from Unifi AMC. Sir, I have one very specific question, which is that if you look at GSK in a block of 3 to 4 years, in the last block of this 3, 4 years, you've been able to benefit from API prices being rather benign, some of the restructuring and employee productivity measures that you have taken have helped the bottom line. Additionally, SG&A and your adoption to the digital channels has helped, and that has led to a situation where the growth in profitability has been materially higher or ahead of the growth in revenues. But given where we stand today, my question is really that if you were to take the block of the next 3 years or 4 years, could you give some directional sense that will profitability be ahead of revenue numbers? And the reason I ask this is because you've alluded to the base portfolio growing at a certain rate and the innovative asset portfolio will continue to grow ahead, albeit a low base, but the margin profile of that and given the launch expenses with the newer assets will be always heavier and they're coming in blocks, right? So is it fair to understand that the block of the next 3, 4 years, the top line growth will mirror the bottom line growth? That's my question.

Sure. It's a very good question, Aejas. So one of the things that you probably didn't -- missed out, I mean, you made a good reflection of the last 3, 4 years. But I just wanted to remind all of us, 3 years ago, when I and Juby stood up 3.5 years back for the first time, I talked about the impact that we had with the NLEM then. And if you remember, we were the most significantly impacted with the NLEM with some of our biggest brands getting included in the then NLEM list of '22. When I scope out the next 3 -- and in spite of that, we grow volumes and we are -- today, if you look at where Ceftum and T-Bact are as 2 brands, we are -- in value terms, in spite of having a price cut of more than 55%, in value terms Ceftum is for a calendar year also, it's above INR 200 crores. So we've more than recovered in terms of the value. That's because we've grown the volumes by 3% to 4% over the last 4 years. But I think coming to the next 3 to 5 years, and I want to again look at the prognosis, this time around, when the NLEM happens, one, the impact on our top line, bottom line for the GenMed business because most of our brands are already -- even if you do the average, we are in a certain band. So there are no out of the outlier, so to say, in terms of what we underwent the last 2 times around. So I think that's one of the most significant changes. I think to your point around growing the innovative portfolio, we are in that sweet spot. I think you talked about everything that we've done in the last 3 years to ensure that the machine is now working at a certain pace in terms of really maximizing our field force productivity, really dialing up our omnichannel integration. And that's where we are. So I don't think even to scope out of the next 3 to 5 years, even with the new launches because remember, these new launches, especially the areas that I talked of, don't require field forces of 1,000 and 2,000 people. I mean even if you look at the oncology space or hepatology space, given the number of health care practitioners in these specific areas, the field force strength is -- you can count them probably on your fingertips, probably multiples of fingertips. So that's where we are. But as I said in the beginning, one of the other questions, our objective will be to hold and sustain these margins, which we work to deliver over the last 3 years. So that would be the objective rather than expanding gross margin anymore or expanding the EBITDA. I don't know, Juby, if you want to add something there?

So I think, Bhushan, you explained well. So and the idea is we are in a very unique spot to invest to grow, right? So that is where our P&L is very strong. We can invest more and sustain the margins. That's the kind of strategy. So long story short on your question, next 3, 4 years, our focus is to bring all these new assets, bolt-on the growth what we are seeing in addition to the base assets. At the same time, use this good opportunity of the nice margin levels to invest and grow the strategy.

Understood. So it's a fair conclusion that it's going to result in a far more accelerated sales growth GSK for the next block of 3 to 5 years and profitability to grow broadly in line with revenue growth.

Our next question is a text question from Nitin Agarwal from DAM Capital. In the next 3 years, what proportion of our revs can be contributed by vaccines and specialty products? Also, is it fair to assume that vaccines and specialty products typically generate margins?

You take the second part.

Yes. On the margin level, since there's a lot more question comes actually. So the vaccines as well as specialty generates the vaccine margins because these are imported products. So that's one thing. The only caveat on the margin side is our base business, 80% of the business is the raw material product, it's hugely dependent on the raw material prices. As we speak, the raw material prices, what we are seeing in the market are pretty stable, at least for the last 2 years. So any change in the raw material prices come, there might be up and down on the margins. The raw material prices softens, we might improve the margin level. Other way around also could happen. That's on the margins. On the field force, Bhushan, you want to take it?

I'll take it. Yes. I think, again, going back to I said in my first slide, what makes us unique at GSK is we continue to be broadly diversified. And when I -- when you look at the uniqueness of GSK in India, we still have a substantially significant base business and established business, which allows us to, therefore, invest to what Juby said even in the earlier question. And I think that's the uniqueness of this operating model. It allows us to absorb shocks as well as invest really so that we can create the new growth platforms. That's how I see the next 3 to 5 years continuing to evolve.

Yes. But majority of the headcount is still focused on general medicines because we don't need too many headcounts in the specialty and vaccines because it's a small cohort of doctors we are targeting.

Our next question is a text question from Mahesh Himchanpurohit from HJ Securities Private Limited. What role do you see for our company in manufacturing and exporting to other markets?

So I think -- thank you very much, Mr. Purohit, for that question again. We continue to have our manufacturing operations in-house in our Nashik factory, along with, of course, more than 20 contract manufacturers. At Nashik, we do manufacture something which goes out to the WHO. So that's an area. Obviously, as of now, given where we are in the supply chain, we are -- and for India in India model, we don't really manufacture anything for the global organization unless there are some specific cases where we've done something in the past 12 months, sending national emergencies or some such situations where a couple of countries have asked us to send. But otherwise, our model is largely India for India, but that's where we are currently.

Our next question is a text question from Vishal Ldwani from Bandhan Life Insurance. Could you please share how many total MRs are currently dedicated to the oncology segment? And where we stand today in terms of oncologist coverage?

Thank you very much for that question. So we have 25 key account specialists in the oncology team. They all come with collective experience of oncology. They've been in the oncology space for a substantial number of years now. So that's where we have. We cover about 1,000 oncologists on the ground, anywhere between 850 to 1,000 because that's -- so that's the whole universe that we have currently. So we cover medical oncologists and the fraternity, both in surgical and radiation to some extent. But medical oncology is where we focus completely. As I said, the next one for us is the hematology business. So that's where we will be investing in launching the hematology team, focusing on various types of blood cancers, beginning with multiple myeloma.

Our next question is an audio question from Abdulkader Puranwala. Abdulkader Puranwala from ICICI Securities. [Operator Instructions]

Sir, my first question is pertaining to your 3 verticals. So just wanted to get some sense from you as to in the last, say, couple of years and this quarter, how would the growth across your general medicines and respiratory portfolio specifically would be. And on the vaccine side as well, we have talked about Shingrix doing well. But then on the residual side, if we look beyond Shingrix, how the volume growth in the residual portfolio also, if you could throw some light on?

So as I said, if you look at the correlation to the Q3 results, we have almost 8% top line growth -- 8.1%. And I did talk about supply constraints. So when you ask that question, Mr. Puranwala, about the last few quarters, we've been quite objective in sharing with you the unfortunate incident at the CMO, which took a toll for 2 subsequent and successive quarters for us in terms of stock availability and constraints. So the comparison might not be correct because we were shaving off almost 4% on our growth because of nonavailability of supplies, even including Q3. So I think moving forward, that's where we are. This whole objective of driving a double-digit ambition remains intact. So that's where we are as an organization. When you look at the question around vaccines, our vaccines business has been delivering a double-digit growth for, I think, now 6 successive quarters. As I said, the GenMed business, which still accounts for more than 75%, 78% of our top line revenue, underwent a significant challenge for 2 quarters, bringing -- pulling that growth down to low single digit. But that's where we are back now. And I think that's where we will sustain our business. Your question around Shingrix, I think even when you were to separate Shingrix from the overall vaccine business and look at our pediatric vaccine business, I think Juby showed that in one of his slides there in the presentation, where we've talked about a double-digit unit growth for most of our ped vaccine business assets, including Varilrix, Havrix. So it's a fairly well-rounded growth that we've seen, especially in this quarter.

Got it, sir. And sir, secondly, on -- just a clarification on the close to INR 12 crores of impact on account of the new labor code. So this is a part of your employee expense or we have adjusted that as an exceptional item?

So we put it as part of employee expense, given it's not material in terms of the numbers. So if you see the notes on the printed financials, we put to that extent, it's in the employee cost and it's one-off.

Okay. Okay. So sir, just on that, then what explains the Q-on-Q dip of nearly, say, close to 10% if I strip off the close to INR 16 crores of onetime benefit again, what we had in the last quarter. So I think your employee cost is down on a Q-on-Q basis. So if you could help me understand the reason for this dip?

So last year, we had some one-off provision reversals in the last year, but employee cost as an inflationary base for the future, it will be growing close to 7 to 8 percentage. That's the kind of targets or the underlying growth we have.

Our next question is an audio question from Viraj Mithani. [Operator Instructions]

I'm Viraj Mithani from Jupiter Financial. Am I audible?

Yes, Mr. Mithani.

Sir, my first question is the recent acquisition by the Glaxo parent, how is it going to benefit India? And in what time frame will it benefit India, RAPT Biopharma and some 2, 3 acquisitions which happened recently.

Sure. So I think one of the -- it's a great question again. One of the stated intent for us is to launch and have early access to our innovation portfolio. So this acquisition that globally we made is for assets in the area of food allergies. That's a growing area where you see a significant number of people developing allergies to certain types of food. So as and when appropriate, the good news is for most of these molecules, India will get pitched as a place to do clinical trials. And as and when that happens, our ability to, therefore, reduce the lag in terms of the launch time lines and therefore, use the subset of data for Indian patients with the regulators is what will allow us to launch these innovative assets much earlier. So that's where we fit in. I think increasingly, we are seeing India locked into the global model of early access of innovation. So that's how I would see it.

Okay. Sir, my second question is, given the momentum your parent is, 12% to 13% growth seems too low actually.

We would love to grow much higher. But as I said, if you look at our -- where we have come from, I think our ability to, therefore, hold and deliver consistent performance quarter after quarter is more important than having a flash in the pan. So that's how we see it.

Okay. And sir, my last question is, with supply constraint getting over and other things behind, now can we expect double-digit growth coming in next quarters onward? Is it fair to assume that?

So it's a very good question again because we've always said that that's what we should be aiming for. As I said, the last 2 quarters were soft, and we shaved off almost -- and I just said, we were shaving off almost 4% of our top line growth. Our underlying growth was at least 4% higher. That's the intent. So I think that's where we'll remain focused.

Our next question is a text question from Wamsi Hota from ASK Investment Managers. What percentage of portfolio is currently under NLEM? Would our recent and upcoming specialty launches follow the usual supply chain distribution led by stockers? Or is there an increasing share of direct procurement via bigger hospital chains?

So our current NLEM -- the portfolio that we have in the -- covered by the NLEM is to the tune of almost 1/3, about 35% of our overall portfolio is under price control, 35%, 38%?

38%.

38%. So that's the response to your first question. For the specialty and super specialty portfolio, we still have -- as you would expect, given the agility required in the supply chain to get these innovative assets as quickly as you can, whether there are infusions in a hospital setting or in day care centers, especially in oncology, you don't have the same distribution setup that you would expect in traded products in general medicines kind of business. So we have a super distributor format where we get -- the whole focus is on getting fast service to the patients and the hospitals and the health care practitioners. So it's an agile supply chain model that we follow for the specialty portfolio.

Ladies and gentlemen, we have no further questions. Pardon me, ladies and gentlemen, we have a late entry to the queue. We have a question from Viraj Mithani.

Am I audible now?

Yes, you're audible.

My question was, will the benefits from the parent launch globally as well as India would be simultaneously or would be some time lag?

So it really depends on how our regulators look at the data that we submit. So if you've seen in the recent budget also, there is a whole focus on improving the regulatory landscape and really fast tracking approvals. So that's clearly stated as one intent in the recently announced budget for the pharma sector. And the reason is simple because although you may have approvals in the Western world, it still takes anywhere between 6 months, sometimes to 18 months to get approval from our local regulators. So I think the regulators also have stated their intent to fast track and accelerate. But it's a function of, therefore, how things evolve in the coming months. But hypothetically speaking, the whole idea of launching concurrently, given that we have now Rule 101, which means the 6 countries where you have already got the marketing authorization and the approval from the regulators there, you should ideally be getting the same -- with data, you should be able to get simultaneous approval. So that's the eventual holy grail, if I see it that way. But I think we are in that direction. We are increasingly seeing reduced time lines. But I think in the next 12 months, we'll see how this space pans out.

And sir, if I may squeeze in one more question. At what stage in, say, next 7 years journey will the share of new medicine will be broadly cost to our traditional medicines?

Sorry, I didn't understand the question. Is it in terms of the contribution to the top line revenue or...

Kind of contribution to top line revenue in terms of share of cancer drugs plus vaccine would be more or less equal to our traditional medicines which have been there like T-Bact and other things like this.

So Mr. Mithani -- so as I keep saying, I think we are blessed and fortunate to have a robust established business, both for GenMeds and vaccines. Now if you look at this INR 3,500 crore plus business that we already have, will something replace overnight? Chances are no. But I think I've always talked of the concept of freshness index, which means what is -- what are the new launches really contributing in terms of a top line. We had -- 3 years ago, we said that our intent is to have at least a 10% freshness index, which means products that are launched in the last 2 to 3 years should contribute 10% of our top line. Today, when you look at the coming financial year, there's a clearly stated intent that our oncology business, Shingrix, which is about less than 3 years old, the RSV product that we will launch, Blenrep, all these products put together should be in the range of that 10%, 15% mark. So I think as you -- with every passing year, that number will only increase as I see it. But even if I were to scope it over a 5- to 7-year period, given the importance of our base business, that base business will still be important. I would probably safely hazard a number of around 20%, 25% of the freshness index.

Ladies and gentlemen, that was our last question. On behalf of GlaxoSmithKline Pharmaceuticals Limited, we conclude this conference. Thank you. Please go ahead, sir.

No, I said thank you very much.

Thank you. Thank you all for joining us. You may now disconnect.

Thank you.