Indoco Remedies Limited (INDOCO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q4 FY '22 Earnings Conference Call of Indoco Remedies hosted by Centrum Broking Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Arundhati Kursange, from Centrum Broking. Thank you. And over to you, ma'am.

Good afternoon, everyone. I, Arundhati Kursange, from the Corporate Access team welcome you all on behalf of Centrum Broking on Q4 earnings con call of Indoco Remedies Limited. At the outset I…

Ms. Arundhati? Ma'am, your audio is breaking up.

Clear?

No, ma'am, it's still breaking up. Ms. Arundhati?

Hello? Am I audible?

Yes, now you are audible, ma'am, please proceed.

Yes. At the outset, I thank the management of Indoco Remedies for giving us this opportunity to hold the earnings call. From the management team today we have with us, Ms. Aditi Panandikar, Managing Director; Mr. Sundeep Bambolkar, Joint Managing Director; Mr. Pramod Ghorpade, CFO; Mr. Vilas Nagare, Corporate Affairs and M&A. I now hand over the call to the management team for the opening remarks. Over to you, Ms. Aditi Panandikar, Managing Director.

Thank you, Arundhati. And thank you, everyone, for joining us. Today we are happy to report that for Indoco the fourth quarter and the year 2021-'22 has been highly successful. For the quarter we have reported an impressive sales growth of 35.8%. And for the year, the sales growth is at 23.4%. Our earnings per share has gone up significantly by 67%, from INR 10.03 per share to INR 16.77 per share. This performance is exceptional, especially on the backdrop of supply chain disruptions, rising input costs and worrying inflation. What has helped us register this notable growth is our diversified business portfolio and market presence across geographies. In the domestic business, we have grown by 38.5% for the quarter and by 29.7% for the year, keeping the growth momentum consistent throughout the year. As a result, our ranking in the IPM has improved. We will now focus on improving our market share and shall register high growth numbers in our covered market. Our U.S. strategy is shaping well with new product launches and a robust pipeline. In this quarter we received 3 ANDA approvals, including Lacosamide tablets, which we got on the day of patent expiry, and Lacosamide injection for which we were the first generic. As many of you might be aware, Indoco will be completing 75 years of existence on the 23rd of August this year. And in this milestone year, Indocoities are fully charged to enter a new orbit and benchmark with the best in the industry. At Indoco we are currently undergoing a super transformational journey in IT as we implement SAP HANA, data management, document management systems, Ariba, et cetera. I'm confident that going forward we will continue to excel and display consistent performances irrespective of the challenges in front of us. That's all for me for now. I will answer your specific questions and now turn the call over to Mr. Sundeep Bambolkar to give you the financial details on the fourth quarter and the full year.

Thank you, Aditi. Good afternoon to all the participants. Hope you and your family members are all safe and healthy. Let me first begin with the business highlights. Net revenues of the company grew by 35.8% at INR 400.3 crores compared to 12% at INR 294.8 crores for the same quarter last year. For the year ended, revenues grew by 23.4% at INR 1502.7 crores as against INR 1217.4 crores. EBITDA to net sales for the quarter is 20.1% at INR 80.5 crores compared to 18.5% at INR 54.6 crores. EBITDA to net sales for a year is at 21.8% at INR 327 crores compared to 18.4% at INR 223.6 crores. Profit after tax to net sales for the quarter is 10.1% at INR 40.4 crores compared to 8.4% at INR 24.9 crores. PAT to net sales for the year ended is 10.3% at INR 154.5 crores compared to 7.6% at INR 92.4 crores as of last year. Domestic formulation business. Revenues from domestic formulation business for the quarter grew by 38.5% at INR 192.9 crores as against INR 139.2 crores for the same quarter last year. Major therapeutic segments, namely respiratory, cardiac and anti-infectives did well during the quarter. For the year revenues grew by 29.7% at INR 803.1 crore against INR 619 crore. During the quarter, 2 new products were launched, namely Subitral 50 mg capsule and Subitral DS 100 mg capsules. The molecule is itraconazole. Under dermatology segment the total number of new products stands at 6 for the year. Now on the international business front. Revenues from international business registered a growth of 43.8% at INR 189.5 crores as against INR 131.8 crore for the same quarter last year. For the year, revenues grew by 26% at INR 620.5 crores as against INR 492.3 crore. Revenues from regulated markets for the quarter grew by 47.6% at INR 155.2 crore as against INR 105.1 crore. For the year, revenues grew by 25.9% at INR 503 crore as again INR 399.8 crore. Revenues from U.S. business for the quarter grew by 110.3% at INR 69.6 crore as against INR 33.1 crore for the same quarter last year. For the year, revenues grew by 43.5% at INR 212.7 crore as against INR 148.2 crore. Revenues from Europe for the quarter grew by 14.7% at INR 79.7 crore against INR 69.5 crore. And for the year, revenues grew by 14% at INR 272.8 crore against INR 239.4 crore. Revenues from South Africa, Australia and New Zealand for the quarter were at INR 5.9 crore against INR 2.5 crore for the same quarter last year. And for the year, it was INR 18 crore against INR 12.2 crore. Revenues from emerging markets for the quarter grew by 28.7% at INR 34.3 crore as against INR 26.7 crore for the same quarter last year. And for the year, revenues grew by 26.4% at INR 117 crore against INR 92.5 crore. Revenues from API business for the quarter were at INR 13.1 crore against INR 19 crore for the same quarter last year. And for the year ended March '22, API business recorded sales of INR 63.4 crore against INR 94 crore. This is mainly due to higher captive consumption, approximately 54% of total sales. Revenues from CRO and analytical services for the quarter were at INR 4.8 crore against INR 3.8 crore. And for the year, revenues grew by 29.9% at INR 15.7 crore against INR 12.1 crore of last year. That's all about the business highlights for the year. And I now request the participants to put up their questions.

[Operator Instructions] The first question is from the line of Aditya Khemka from InCred AMC.

And I have a few questions on the domestic business. Aditi, ma'am, what would be the total sales related to COVID that we did in FY '22? I am assuming this would be nonrecurring sales. So just wanted to understand the COVID-related sales in FY '22.

Yes. So Aditya, for us, we didn't -- most of our products were sort of not exactly only for COVID but they were specifically in anti-infectives and respiratory. These are the kind of products which indirectly also got an impact of COVID-related, of COVID happening and increased consumption. So it is very difficult to exactly pinpoint for products, but if I have to give you an understanding, basically we got the COVID tailwinds for 3 brands, one was Karvol Plus, second is ATM, and the third marginally is Oxipod which is cefpodoxime. But that was more of recovery of market over the previous year when the product had dipped. So frankly, just about Karvol Plus and ATM. And I estimate around INR 30 crore of top line for the India business. And upside has come because of COVID. However, both these brands show a solid support of prescription. So it is not the kind of sale that has come from over-the-counter purchase because of COVID, it is a solid sale backed by secondaries and prescriptions from doctors. And in case of ATM, for example, we are now the third largest Azithromycin brand. And I feel confident that this advantage we got during COVID, we will be able to push it further. Coming to Karvol Plus, Karvol Plus is a kind of product which has a high repeat purchase element attached to it. And COVID helped us get more of that. So to that extent, possibly the sales, additional sales we got from Karvol is what we stand to not get in the current year.

Understood. So in your assessment, it's about INR 30 crores. And some of it may stick because prescription seems to be picking up…

Yes.

Okay. Understood. And, ma'am, just wanted to understand on the prices. So in April we must have taken the price increase as for the price control products and some of the non-price controlled products. So if you could lay out the, how much of a price increase has been taken in products under DPCO? And how much of a price increase have you already taken and planning to take in the noncontrolled basket?

I think the overall we have taken, overall for the organization, we will get a price rise of about 6%.

6%. But your DPCO…

For the other products, we have taken 10.73% as allowed by the government and for the rest of the product as per the competition, 4% to 5%.

4% to 5% for the rest of the products.

Yes.

And your NLEM portfolio is about 20% of your sales.

No, no, 11%.

11%. Okay. So NLEM portfolio is 11%. Okay. So 6%. And lastly, on the domestic business, ma'am, how do you see now on this base because you have, let's say, INR 30 crores of nonrecurring sales of COVID. So your base would actually be 770 and not really 800. And how would you really grown the base of 800 in FY '23? And what would drive that growth? So 6% would come probably by price. So what is the volume in…

Yes, yes. Interesting question, Aditya. And quite honestly, the way this year is going to plan out because last year was a COVID year where performance fluctuated so heavily month-over-month and quarter-over-quarter. This year, in order to benchmark a healthy performance for India business, we would be concentrating on our market share in the covered market, which would be a much better barometer to assess how we are doing because the covered market itself is expected -- covered market as well as the Indian pharma market is expected to, growth would not be a correct way of assessing health of the business in this year. So I'm pretty confident this year all set and done over the last 2 years it is not just a COVID basket, but products across most therapies for quarter 4 have been exceedingly well. And I feel we will be able to get a higher market share going ahead. We stay concentrated on prescription generation, secondaries and pushing products across various therapy baskets. As you know, the 2 main therapies which got support from COVID were anti-infectives and respiratory. But other than that, GI and stoma, stoma absolutely did not get touched in any way, neither when COVID happened and nor afterwards. So there we have a very steady-stream business which is growing at double digit. This year I'm expecting the dental and the gynec and opthal portfolios, which were impacted last year, to start doing better, as well as the chronic therapy. Although we have a small percentage share in it, I expect it will grow at much higher levels. So we will expect muted growth from the 2 acute divisions, higher double-digit growth from all the other divisions. That's how we are looking at it.

Understood. So, ma'am, in your assessment in the full year of FY '23 even IPM can see flat volumes?

It looks like that as of now. Like I said, it's going to be different month-to-month. So if you look at the last year and see April and May, which was when a wave happened and then again, Jan and Feb when we wave happened. So you would have to -- it's very difficult to make a generalized statement about the IPM. But for the whole year, I think even IPM will correct and come back to its higher single-digit growth at least.

Understood, ma'am. That's helpful. One last question. This is probably for Vilas Sir. Your gross margins, Vilas Sir, for this quarter obviously were impacted by raw material inflation. I haven't seen a 68% gross margin for Indoco for a long time. So how do we feel about it despite the price increase that we might be able to take in India in semi-regulated markets? Will we be able to go back to our 70%-plus gross margins?

Aditya, lot on the -- I know it's for Vilas, but I hope I can answer. Some of the headwinds, specifically which impacted cost of goods and therefore impacted our DCs. There is no certainty about them, to be very honest. We expect, based on certain discussion internally and looking at the environment that at least for another quarter, if not one more, we are likely to be impacted with higher cost of goods.

The next question is from the line of Ravi Naredi from Naredi Investment.

Thank you very much for nice result. You and your team is doing fantastic job. We give the best wishes for future. Ma'am, our request is one investor presentation if you give along with the result it will helpful for us to understand the company in a more better way as I am new investor in the company. That is my request.

Okay. So we typically send out the management discussion analysis. If it has not come to you this time, I request you to get in touch or we will know your details through the contract, and we will ensure that you get it next time.

Possibly we could send it to you tomorrow itself.

Okay. But it will be before the con call it will be more better so we can see data and then ask the question according to the highlights.

Sure, sure. Our MD has gone out at around quarter 1 today. So I don't know why you have not got it, but we will ensure.

Your e-mail is not registered with us, please send your e-mail and then we will make sure that it is sent to you.

The next question is from the line of [ Dara Patwa ] from [ Smiths Limited ].

I just had 2 questions. Can you give me the CapEx guidance for FY '23 and FY '24?

Yes. Any other questions on your side or that's the only one?

No, I also wanted to know about the ophthalmic product portfolio, the new launches in the next 2 years for that.

Okay. Okay. So CapEx this year, we are guiding somewhere between INR 110 crore to INR 120 crore. That's the first part of the question.

So this will be mainly maintenance CapEx?

No. Maintenance CapEx plus we are putting up fresh lines in our ophthalmic plant. So all put together, talking of around INR 120 crores.

Okay. Okay. And any color on the ophthalmic product portfolio? How do you see it to pan out in the next 2 years?

We have many ophthalmics coming up in the next 2 years. First is a product in partnership with Teva. Second is a steroid in combination with an antibiotic in partnership with another company. So ophthalmics is one of our strengths. So we will be launching at least 5 to 6 new ophthalmics in the next 1.5 to 2 years.

Okay. I had one more question. Like there are 2 FDA filings which you are pursuing. Can you share any details over there, like how do you see the market competition and market size of these products?

You're referring to solid dosages?

Yes.

We are not seeing at liberty at this stage to discuss since I think you understand that it's a strategic advantage being an FDA…

The next question is from the line of Deepan Shankar from Trustline PMS.

Congratulations for a good set of numbers. So firstly, Aditi Ma'am, wanted to understand has our revenue per salesperson has increased? And what is your outlook for over next 2 years in this category?

Yes. So our PCPM or PHY per man return is now at INR 3.3 lakhs, okay. And in the next 2 years I expect it to get to around very close to INR 4 lakhs. What was the second question? I'm Sorry.

Yes. Can you provide the outlook for our U.S. and Europe business for next year?

U.S. business is slated to grow by about 40% by the end of the year. And Europe business, which includes the mainland Europe and U.K. will grow by about 20%.

[Operator Instructions] The next question is from the line of Rahul Veera from Abakkus.

Just wanted to understand if there is any profit share number in this fourth quarter?

Profit share, yes.

What is the number, sir?

Okay. So for this quarter. For this quarter, okay, profit share for this quarter is INR 4 crore, while we have dossier income of about INR 18 crores in this quarter.

You got that?

Yes. And just one more question from my side. All the other launches that we're doing with Teva and other partner over the next 2 years, is the profit share arrangement increasing?

Sorry, last part we did not hear properly.

Is the profit share number, is it on an increment -- is it increasing like from whatever we did for the first product, something like Brinzolamide now for the new launches are we increasing the profit share?

Yes. Generally speaking, yes, it's increasing. However, product-to-product, it is different, the arrangement based on the upfront investment that each of us has had to do. I hope you get it because there are some products with, say, clinical trial-related expenses, so there our share would be lower. But in most other vanilla products solution suspension it's increased.

Right. And we have couple of contracts in Europe, specifically from the Germany side. Given the current situation across Europe, is the delivery or everything is on FOB-basis or CIF-basis? Just trying to understand, are we taking the logistical cost on our books? Or how does it work now?

As the policy, we are ex works.

Ex works, okay, okay, fine. That's fine, sir. Any new contracts coming across, sir?

New contracts, sorry?

We can't you very clearly, maybe you can be a little louder.

Sure. Is there any new contract that you see we foresee across Germany or Europe or any other region?

So the present contract continues right up to May '23.

But our order book with both Europe as well as U.S. is very robust as of now.

Yes, absolutely. Sure, sure. And our U.K. contract was largely related to Paracetamol, right?

No, there are many products, Paracetamol, Cetirizine. And there are at least 12 to 14 other products in U.K.

[Operator Instructions] The next question is from the line of Vishal Manchanda from Nirmal Bang.

Sir, I missed your Europe and U.S. numbers. Can you please share that?

Yes. U.S., we have said we will grow by 40% and Europe by 20%.

Sir, I'm sorry, I mean the FY '22 -- or Q4 FY '22 U.S. and Europe numbers…

Present numbers.

Okay. That slide has remained, I think, and was sent later.

Okay. U.S. quarter-on-quarter is about INR 70 crores. Can you hear me?

Yes, I can hear you.

And Europe was about INR 80 crores.

Europe was INR 80 crores, okay. And sir, one question related to CapEx. So this year the CapEx was around INR 125 crores. Can you share on kind of what was the CapEx spent on? And could we see some benefit out of it in FY '23?

Yes. On CapEx, one part of CapEx was installing a new line in the sterile block, that's Goa Plant II. And that line has been installed and commissioned. And it will be definitely helpful in a big way. The line will start operating from around 20th of June, that is next month, and we'll get benefit for -- right from 20th June onwards, right up to March 23. That's for the current year, if you're talking about. So that is one. Secondly, we have built a block for high-potency products which cannot be manufactured in a general area. And there are substantially large contracts being signed in Europe for this product. And Indoco will be one among very, very few companies to have such kind of a segregated manufacturing.

This is for solid orals.

Solid orals. Thirdly, we have also got within that block, another block which manufactures sustained release tablets and capsules. So that also will be to our big advantage. So like this, there are 3 to 4 pieces which would give us huge advantage starting from July onwards.

Got it. So this would be commercialized and start delivering revenues in FY '23?

Yes, yes, definitely.

Got it, sir. And just one on India. Can you share what was the contribution of new products in the year FY '22 as a percentage of revenues?

Yes, yes, around 2%.

Okay. And kind of can we expect a similar run rate in the next -- in FY '23?

We will do better on new launches going forward. Most of these products were launched in the second half of the year, so we've not got the full upside.

Okay. And just one on Combigan, so this product expired recently in the U.S., and it's one of the large opthalmic products there. So could you share whether this is whether Indoco can come into this product soon or not?

Yes, yes. There was some information request received from FDA, which we have just answered. And we are aware it's a $490 million market, and Indoco will be the second generic possibly. So of course, we are hoping to launch as fast as possible. That's all that I can say for the time being.

And sir, the information request was kind of, was not kind of -- there were no grave issues in that information request?

No, no.

Got it. So any time lines that you can share maybe this quarter or the next quarter?

To be safe, I think the product will be available in July in the U.S. market.

[Operator Instructions] The next question is from the line of Kunal from Vallum India.

wanted to know, firstly, could you please tell us the entire -- for FY '22, the entire profit share accounted for this year, including your dossier income?

So basically, accounting of a profit share is on a received basis. We are little bit conservative in terms of accounting profit share because there is a complete process in place in terms of getting a reconciled statement of a profit share. When an ultimate sale happens in U.S. market, the working is shared with us. We review that and then only we account that. So we can assume that in a certain portion of profit share, which got accounted will come into next year also.

Okay. So you're saying that based on the conservative method which we use in accounting with the profit share, a part of it, as we have supplied the inventory, but a part of that sale is which not yet accounted will come in the next…

Yes.

Yes.

Okay. And just I wanted to understand, so I mean could you please explain the method, I mean, based on how the innovator actually remits the profit share to us? I mean any just rough method. Also whether it is based on you reaching the product in a certain market share threshold? Or I mean, because for most companies, what we see is that once the product becomes mainstream for the front-end partner, and once a decent amount of share builds up, it is more or less on a quarterly basis where the profits are accounting does happen for your peers. So can you give us an understanding of the method?

So frankly, for us, we are yet to get a consistent sale of any such product with Teva. So let us watch this year. I'm expecting a similar pattern to happen.

Okay. And ma'am, could you please know the -- what is the closing market share as of the end of this quarter for Brinzolamide for our generic.

It must be around 5% to 7% right now.

Okay. Because, sir, in the past month, I think, quarter call, I think what you had conveyed was that we are about somewhere closer to 20%. So I mean, this is of some increase [indiscernible].

Yes, yes. Now again it will go up. So by July we should regain that position of 20%.

Okay. So any reason for the share to dip so sharply in a matter of 1 quarter, any big something?

There was some improvement in the packaging, which was required, and therefore there was a lull in between the manufacturing. But manufacturing has started again and stock is under transport.

Sure. So what you're saying is that going ahead as we gain back the market share and probably even exceed that number, 20% number, we will see a higher accounting for profit share going ahead in the FY '22. Possibly based on the presumptions which we are having today, ma'am, that will be correct?

True, correct, true.

The next question is from the line of Dinesh Kotecha from KRIC.

I am Dinesh Kotecha from KRIC. Sir, I have a accounting question. That is the R&D expense has gone up by 25% year-on-year basis. And in this quarter it is nearly INR 20 crores. So I would like to know, how many -- I mean, how much is the capitalized amount of R&D because what we are doing in the profit and loss account is the revenue item of the R&D.

Yes. See, we have a fixed policy that only when it is our own ANDA we capitalize the outgo. And as soon as the approval comes, we write it off in a period of 3 years. That is a constant policy. Now Pramod will just give you the further details.

No, but how many products have been capitalized from the -- I mean, commercialized from the R&D in the current year?

So your question is about the overall amount which is capitalized on account of R&D projects.

How many products from the R&D has been commercialized during the year?

How many products?

Commercialized during the year.

Yes.

I think 6 products launched during the year we can say.

How many?

6.

6.

Okay. And how many are in the pipeline right now in the R&D?

See, if you want to lower our ANDA pipeline, then we have around 6, again 6 to be filed in the current year. Every year, there is run rate that we would like to maintain.

[Operator Instructions] The next question is from the line of Kunal Dhamesha from Macquarie.

So the first question is on the 3 lines, new lines that we talked about, one on the injectable, one on the high-potency and then one another. How much CapEx or gross block would we have for these 3 lines?

The injectable line and the 2 solid dosage lines put together, about INR 55 crores to INR 60 crores.

Okay. INR 55 crores to INR 60 crores. And all these things are inspected by the respective regulatory agencies? Or has to basically start firing on revenue?

Not yet. As and when the regulatory agencies come down, they will be inspecting the line. We are ready for the inspection.

And these are more U.S.- and Europe-focused, right? Or just U.S.-focused?

The ophthalmic is U.S.-focused and the solid dosages are Europe-focused.

The next question is from the line of Hiten Boricha from Joindre Capital.

My most of the questions have been answered. I just wanted one clarification. You mentioned we did INR 800 crores revenue in domestic market and it could grow by -- will be increased by 20%. Is that correct or?

No, no, no, no. I think you really confused. In the beginning, there was a discussion in what percent, of the INR 800 crore we did this year is likely to be on account of additionally on account of COVID to which we said that around INR 30 crore in the worst case, I mean, or less than that, okay? Now India this year is looking to grow anywhere between 12% to 15% because we are coming out at the back of a very difficult year because a lot of the acute portfolios directly and indirectly got impacted by the various waves of coal. So we have to wait and watch to see the consumption pattern this year.

The next question is from the line of Aditya Khemka from InCred AMC.

Sundeep, sir, just like we are able to increase prices in the domestic market, are we also able to increase prices in Europe and semi-regulated markets to pass on the cost pressure to our customers?

Yes, yes. In fact, in Europe we have definitely increased the prices to offset the higher input costs as also in ROW markets. Of course, looking at the competition because we are marketing our own brands over there. But the whole process is on. And in some territories, we already got the price right.

Right. And what about the U.S. market and API segment, sir?

U.S. market, we haven't seen any such pressure because mostly we are in niche areas of opthal and injectables. Out of 20, 15 of our products line ophthalmics and injectables and the remaining 4 to 5 are solid dosages. So I think there's no problem over there.

But, sir, the data suggests -- sorry, sorry.

No, no, no.

No, I was just adding one point to Sundeep Sir's argument. The data from IMS suggests that there is actually inflation in sterile injectable products in the U.S. And I know you have a few injectables as well on the market. So I was wondering if you are also seeing price inflation in your injectable basket.

Not really because at least 2 to 3 injectable products, there are very, very less competition. So naturally, the question of price erosion doesn't arise at all.

Sundeep Sir, I was asking about price inflation. I'm saying IMS suggests that there is a significant price inflation, high-single digits.

Yes, yes, yes. That benefit we'll get.

In your generic injectables in U.S.

Yes, yes, of course.

Yes, yes.

Okay. Okay. And Aditi Ma'am, to you, the API part.

No. I was about to say that for us API still is a very small quantum of total sales. For the next year also we expect to do external sales of about INR 120 crore, an almost equivalent amount will be internal consumption. So to that extent, indirectly, yes, we will get hit because of higher prices of KSM. But we have now seen this kind of a thing happening over the last 2 quarters. My understanding is now prices have started to stabilize. So hopefully we will -- it will not get worse from here.

Right. And how many months of inventory of API and packing material do we keep at this point? Obviously, because prices are inflated, supply is constrained. So we must have sort of a policy to deliver in that situation.

Packing material is around 1, 1.5 months and APIs and raw materials, 2 months at least.

2 months at least. And that's across geographies, again as a business put together?

Yes. See, mainly it's India business, the quantum, which is the highest. Next comes Europe and U.S.

So it's 2 months across India, Europe and U.S.

Yes, yes. APIs and excipients 2 months minimum inventory, packing material, 1.5 month.

Got it. Got it. And lastly, on the SRM market side, semi-regulated markets, it is our own field force in some of these markets that is promoting? Or is it a contracted sales force?

Yes, yes. In French West Africa it is entirely our field force. In the sense they are on the payroll of the agent, but they are funding all the costs. In Kenya, we are bearing part of the cost, in Kenya and Tanzania. Sri Lanka, again, we are funding the entire cost. Myanmar, we are funding the entire cost. So that is it.

And sir, how big for us was Myanmar? Because I understand Myanmar has been in political turmoil for the last 2 years, so.

Not very big. Not very big. The biggest thing in this thing is French West Africa and Kenya. These are the biggest.

French West Africa and Kenya.

French West Africa we did about INR 50 crores last year. And Kenya we did INR 28 crores.

Right. Right. And are API imports, whether we do it from China or some other country, are they all billed in U.S. dollars?

Yes, yes.

So whatever benefit we get from U.S. dollar depreciation by exporting to U.S. will basically get nullified by whatever we import? Or is there a net positive exposure to the dollar?

To a small extent, Aditya.

See, because our imports are very less compared to our exports.

Okay. Okay. Okay. Right. And sir, last question for you. On the semi-regulated market currency, so we have seen significant turmoil again in different currencies in semi-regulated markets driven by multiple factors, inflation and geopolitical. How are we dealing with the currencies? Are we billing, invoicing in dollars to the SRMs or are we invoicing in the local currency?

No, no, it's all in dollars, all in dollars. So we need not worry about the local currency.

Okay. So that the distributor at their end take care of it?

Yes, yes.

[Operator Instructions] The next question is from the line of Ranvir Singh from Sunidhi Securities.

Sir, my question relates to India business. So that INR 30 crore which was COVID-induced sales in FY '22. So more of it was skewed towards Q2, Q3 or part of it was in Q4 also?

It was spread across several quarters. Our Q2 is typically when the season comes in. So there we did not see much of that. But definitely in quarter 1 and quarter 4 we have seen that impact coming, specifically in the month of April-May last year and again January. So 3 months last time we saw that impact.

Okay. So why I am asking because if I go by product-wise like in ATM or that Karvol Plus you mentioned that was influenced by COVID. In Q4 also the run rate has been pretty decent. So what the part of it was influenced by COVID-related demand?

Yes, yes. In Q4, part of ATM specifically was definitely influenced by COVID, but across other therapies and other brands which you've seen, we have done very well in Q4 and none of them really had the COVID push.

Okay. Okay. So in Q4, the 38.5% growth Y-on-Y, can you break it into volume, value and price growth?

Typically, as I said, around 6% has come from price, 2% out from new launches and the remaining is all volume. And not all of that volume is only COVID.

Okay. Okay. Understood. So this kind of run rate because what you mentioned that the market share may go, that depend on how market, overall market grows. But that run rate, can we expect at least this run rate going forward to continue?

So as I said, the specific 3 or 4 months of last year when there was a spike because of COVID, in those months it might be challenging to grow over that base. And therefore, a particular quarter here or a particular quarter there would get impacted on growth. Therefore, I said, let us look at market share. But overall, in the longer term, that is on the full year basis or even otherwise, all our key brands, the top -- all the brands contributing to more than 90% of our India business are in pink of health and is supported with excellent prescription growth. So I'm very confident that even if we take some of -- some headwinds of the market, the business is in great condition. And over a year, it should come back to some kind of normalcy for growth.

Yes. And second, on API side. I heard correctly, you said INR 120 crore revenue may come in FY '23?

Correct.

Against INR 63 crores in this year?

Yes.

So it is doubling of the API rate.

Yes, [indiscernible] are very low because we consumed a lot internally. And next year, we have planned accordingly. Yes, yes.

[Operator Instructions] The next question is from the line of Cyndrella Carvalho from JM Financial.

Aditi Ma'am, how should we look at the domestic market from a growth perspective for FY '23?

Cyndrella, if you heard any of the Ivax or IQVIA presentations of late, they are drawing various trendlines of over 24, 30-month periods and showing that by -- certainly by third quarter this year the market should come to some kind of normalcy on growth. A normal growth in the years pre-COVID was around 10%. So IPM is expected to grow 9% to 10% by third quarter. Before that, of course, there's going to be some upheaval, ups and downs and all those things. We are confident of doing better than the market. In fact, I'm pretty confident of doing in excess of 12%.

That's helpful, ma'am. But if we look at our growth ambitions, like in India, apart from our core regions, you were planning to expand it to our non-core regions within India? How is that plan going ahead? And in terms of the volume coming in from the noncore regions in India, how we should expect it to pan out in FY '23?

Yes. So specifically when it comes to new launches, we are seeing a pretty uniform performance across the country, which is a good indication of work happening in the areas, especially in the north, where we are relatively weaker. Other than the 2 acute divisions, which are more skewed in West and South, even those divisions in the East have started coming too far. But the dental and opthal business and gynec business is pretty uniform across other regions. And so is the cardio diabeto business. So I expect over a couple of years we will be able to get more from the weaker geographies in the North as well.

And, ma'am, if we correlate, I mean, we gave growth numbers for U.S. and Europe segment and with India also you just highlighted. So how should we look at our margin profile for '23? Any trajectory that you can help us benchmark to?

So Cyndrella, we are going through very challenging times right now with regard to increased prices of input materials, almost all freight. In that scenario, we feel at this stage let's not give a very kind of a projection for the whole year. But for the next quarter, at least we feel we'll be able to maintain the current levels of EBITDA. And hopefully, by second quarter we could do better.

[Operator Instructions] As there are no further questions, I now hand the conference over to the management for closing comments. Over to you.

Yes. On behalf of the management team, I sincerely thank all the participants for a very active con call with the management team. Thank you very much. Stay safe, stay healthy. Thanks.

Thank you. Ladies and gentlemen, on behalf of Centrum Broking, that concludes this conference. We thank you all for joining us, and you may now disconnect your lines.