Lupin Limited ($500257)

Hello. Good evening, and welcome to Lupin Limited Q4 FY '26 Earnings Conference Call. Thank you for your participation in the call today. [Operator Instructions] Please note that this conference is being recorded. I now hand over the conference to the management. Thank you, and over to you.

Thank you. Good afternoon, friends. I'm very pleased to welcome you to our Q4 end of fiscal year '26 earnings call. I have with me are MD, Nilesh; our CFO, Ramesh; and our Head of Investor Relations, Ravi. We look forward to sharing with you our highlights for the quarter as well as the full year and the outlook for fiscal year '27. This quarter marked our 15th consecutive quarter of year-over-year growth with highest ever sales and profitability. While the U.S. has clearly been a standout for us. Most of our regions be it the India prescription business, other developed markets and other emerging markets have delivered double-digit growth, growing 14% year-over-year. This highlights the strength and resilience of our business model and geographically diversified business. Fiscal '26 has been a stellar year for the organization with revenues and profitability at record levels. Turning to individual business segments. Our U.S. business continued growth momentum, surpassing the record sales achieved in the last quarter. For the full year, our U.S. business achieved sales of $1.3 billion, an impressive growth of almost 40% year-over-year. Growth was driven by new products such as Tolvaptan, where we benefited from being the only generic on the market. Mirabegron, where we had the benefit of full year of sales and new complex injectable products like generic Risperdal Consta with CGT exclusivity. Also, our first product from a proprietary Nanomi platform. Our base business also grew this year, supported by high volumes more than offsetting low single-digit price erosion. and additional generic competition on a few key products like Suprep and Albuterol. We filed 11 products and launched 15 products during the calendar fiscal year. Going ahead, we remain focused on doubling the share of complex products in our U.S. business, led by respiratory and complex injectables, augmented by our biosimilars in the next couple of years. In the next 3 years, we expect to launch 50-plus products in the U.S., with 10 exclusive first to files, 4 biosimilars as well as 2 to 3 505(b)(2)s. In addition, we remain committed to expand our specialty portfolio through a mix of organic initiatives and targeted acquisitions. Coming to India. Our India business has grown 11.5% year-over-year in the quarter, with the core prescription business growing 14.5%, representing a 1.2x growth against IPM. All our key therapies outperformed their respective market growth with respiratory segment and cardiac growing at 2.5x and 1.3x their category growth. I would specifically like to mention our Diabetes segment, which grew at 20.9% year-over-year, outperforming category growth by 1.4x during the quarter. For the full fiscal year, prescription growth stood at 10.6% ahead of IPM growth of 9.9%, led by a strong volume growth of 6.4%. The chronic segment now accounts for 66% of our portfolio, up from 64% in fiscal year '25. And we have set ourselves a target to increase this share to 70% in the next 5 years. During the quarter, we successfully launched our version of semaglutide injection under the brand named Semanext targeting diabetes and endocrinology specialists and Livarise focused on GI and GYN acquisitions. I'm happy to share that over the past 1 month, we are now ranked either second or third amongst all the branded generics, which is a testimony to our strength and capabilities in this segment. We are confident of further leveraging these capabilities to launch our oral tablet product later this financial year. We remain confident that our India formulations business will continue to perform IPM by 1.2, 1.3x, supported by a strong sales force of nearly 12,000 people and pipeline of more than 80 new product launches over the coming years, including innovative in-house and in-licensed products. Our other developed markets, Europe, Canada and Australia accounted for 12% of our total sales and grew 13.3% in fiscal year '26. Within this, our European sales have surpassed the $200 million mark, having grown at a healthy double digit during the year. We expect this contribution to increase as we roll out a pipeline of complex products including biosimilars, and integrate our newly acquired VISUfarma business from this quarter onwards. Emerging Markets delivered an impressive 49% year-over-year growth in the quarter led by Brazil, South Africa and Philippines. Brazil continued its strong momentum of the last 3 quarters, growing 113% year-over-year in local currency during Q4, driven by successful commercialization of dapagliflozin. We are starting to establish a real presence in the diabetes and metabolic space in the emerging markets with dapa serving as a strong start and the launch of empagliflozin in Brazil and South Africa this year as well as semaglutide in South Africa later this year. Turning to R&D. Our spend was 8% of sales this quarter and 7.5% in fiscal year '26 with continued focus on complex and specialty platforms. We have over 50 active products in the pipeline, with near-term emphasis on respiratory, complex injectables and biosimilars. We have also evolved a strong 505(b)(2) pipeline in the last couple of years and will start seeing product launches in the next 2 years. We are also strengthening our India innovation portfolio through both in-house development and in-licensing of late-stage assets. Switching to compliance. We received the EIR for Goa and BI status from the U.S. FDA during this quarter. We are on track with our remediation efforts at [indiscernible] Unit 2 facility. As we have mentioned in the past, we remain fully committed to maintaining the highest standards of quality and compliance across all our slides globally. In conclusion, reflecting on the year gone by, we outperformed all our metrics, delivering strong financial and operational performance and achieved significant milestones. This strong performance was driven by record earnings in our key markets, U.S., India and Europe as well as significant turnaround in markets such as Brazil, proving that perseverance and disciplined execution deliver results. In parallel, we have made meaningful strides in building a robust innovation-driven pipeline across multiple platforms. We are also advancing cross-functional initiatives that leverage state-of-the-art technologies and AI to enhance efficiency and prepare the organization to operate at its best in an increasingly competitive and challenging global environment. We have built a strong foundation with positions Lupin for sustainable growth. As mentioned in our earlier interactions, we expect to grow our top line high single digits with margins at around 25% in fiscal year '27 despite increased headwinds from an uncertain geopolitical environment. With this, I will hand it over to Ramesh for a deeper analysis of our performance.

Thank you, Vinita, friends. I welcome you all to our Q4 FY '26 and FY '26 Annual Earnings Call. I'm happy to report another quarter of strong results with total revenue from operations growing 32% year-on-year to INR 7,475 crores and EBITDA growing at 68% year-on-year to INR 2,171 crores. This marks the 15th consecutive quarter of growth from the company. On a full year basis, the performance has been equally strong. The total revenues from our patients, growing 23% to INR 27,958 crores and EBITDA excluding ForEx and other income growing 55% to INR 8,160 crores. EBITDA margins at 29.7% have increased 590 basis points year-on-year [indiscernible] higher gross margins and also operating efficiencies in our business. I'm happy to report that we handsomely beat the guidance that's set at the beginning of the year, both in terms of sales growth and margin trajectory. What is happening is that the growth has been diversified and robust across our major geographies, be it the U.S., which grew 46%, India prescriptions, which grew 10.6%. Other developed markets, which grew 13.3%. Other emerging markets, which grew 35.2% or on our GIP business, which grew 11.8% during the year. During the quarter, the U.S. business recorded sales of $371 million, 6% higher quarter-on-quarter in constant currency terms. This growth has been driven by new product launches and higher volumes in base business, offset by additional competition and lower seasonal product sales. For the full year, the U.S. business has recorded sales of $1,318 million, $1.31 [ billion ] as against USD 94 million last year, testing a growth of 40% year-on-year in constant currency terms. This is led by -- this has been led by volume growth in our base business and healthy contributions from new products, offset by single-digit price declines due to additional competition in key products like albuterol during the year. Our strategy of focusing on complex products has paid handsome dividends, which is demonstrated by the launch of key complex injectables like Risperdal Consta, glucagon and [indiscernible] this year. This will be strengthened by the launch of our first biosimilar in the U.S. in FY '27. We have an attractive pipeline of more than 60 products in injectables to respiratory portfolio currently under development, which will augment our complex portfolio going ahead. The India region. During the quarter, the India business recorded sales of INR 1,908 crores going at 11.5% year-on-year. I would like to highlight the core prescription business grew by 14.5% year-on-year as against an IPM growth of 11.6%, translating into 1.3x the IPM growth. This is offset by lower tender sales in our GIP business. On a full year basis, the India business grew by 7.1% year-on-year to INR 8,014 crores with the Prescription business growing 10.6% as against IPM of 9.9%, translating to 1.1x the IPM world. Key segments like cardiology and respiratory assembly outperformed this category growing at 1.3x and 1.7x, respectively. This is offset by lower growth in Diabetes segment, which grew 9.4% as against category growth of 12.2%, impacted by loss of exclusivity for certain in-licensed products. Volume growth has been a healthy 6.4% during the year against IPM volume growth of 2.6% and a chronic share in the mix has increased to 66% from around 64% in FY '25. The share of in-licensed products in the quarter has reduced about 6% of our portfolio from 12% last year, whilst also having a positive impact on our profitability going ahead. We'll launch 15 products in FY '26 and plan to launch about 20 products in FY '27. We remain confident that our India formulations business will continue to outperform IPM by 1.3x going forward, supported by sales or cost of about 12,000 people and a pipeline of more than 80 new product launches over the coming years, including innovative in-house and in-licensed products. Other developed markets. For the quarter, our other developed markets, Europe, Canada and Australia recorded sales of INR 845 crores, growing 7.1% year-on-year and accounting for 12% of our total sales. For the full year, these markets recorded sales of INR 3,244 crores, growing 13.3% year-on-year and contributing 11% of our total sales. We expect this contribution to increase as we roll out a pipeline of complex products and corporate acquisition of VISUfarma in FY '27 first quarter. Emerging markets. For the quarter, emerging markets recorded sales of [ INR 991 ] crores, delivering an impressive 49% year-on-year led by our key markets in Brazil, Mexico, South Africa and Philippines. Digital particular maintained strong momentum post a turnaround of last few quarters, growing 113% year-on-year in local currency terms, driven by successful commercialization of dapagliflozin. For the year, emerging markets registered sales of INR 3,483 crores, growing at 35.2% year-on-year led by growth in Brazil and South Africa. Getting on to the P&L, other operating income. Other operating income at INR 83 crores as against INR 105 crores in Q4 FY '25 has decreased by 21% year-on-year during the quarter. This decrease is primarily on account of lower export benefits from the PLI scheme during the quarter. On a full year basis, other operating income came in at INR 471 crores against INR 516 crores last year. Turning to the gross margins. Gross margins continued their upward trajectory during the quarter at 75%, up from [ 60.7% ] in Q4 '25 last year and up from 73.5% in Q3 FY '26. For the full year, gross margins have improved to 73.3% from 69.2% last year. This 410 basis points year-on-year improvement is driven by multiple factors, which includes better product mix, higher profitability in India from lower share of in-licensed products, increased volume and other cost improvements and efficiencies, which we have undertaken over the last several quarters. Employee benefit expenses. For the quarter, employee benefit expenses stood at INR 1,243 crores, increasing 24.1% year-on-year from INR 1,001 crores in Q4 FY '25, translating to 16.8% of sales vis-a-vis 18% last year. This change is largely attributable to higher cost due to regular annual increments and business growth during the year. For the full year, employee costs have increased 15.4% to INR 4,525 crores mainly driven by annual salary hikes, India field force expansion and ForEx translation. This translates to 16.6% of sales in FY '26, vis-a-vis 17.9% of sales in FY '25. Manufacturing and other expenses. Q4 FY '26 manufacturing and other expenses came in at INR 2,209 crores, a growth of 30.9% year-on-year, which translates to approximately 29.9% of sales as compared to 30.3% of sales in Q4 this year. The expenses were higher mainly due to higher volumes in the normal course of business and license fee payments on part on account of settlement agreements. [indiscernible] actually other expenses in FY '26 came in at INR 7,898 crores, an increase of 19.2% year-on-year as compared to FY '25. This translates to 28% of sales has come back to 29.8% last year. This has been led by primarily higher R&D outlet, higher [indiscernible] expansion, license fees on settlements, onetime acquisition-related costs and higher volumes of increased sales. R&D is at INR 590 crores, that's 8% of sales in Q4 FY '26 as compared to INR 543 crores at 9.8% of sales in Q4 FY '25. For the full year, R&D is INR 2,063 crores translated to 7.5% of sales. We expect R&D to be around 8% of sales for the next fiscal EBITDA. EBITDA excluding ForEx and other income during the quarter was INR 2,171 crores, we serviced INR 1,292 crores in the same period last year, an increase of 68% year-on-year with margin of 29.4% vis-a-vis 23.2% last year in the same period, an increase of 620 basis points over the last year. On a full year basis, EBITDA was INR 8,160 crores, a sharp increase of 54.6% year-on-year with margins of 29.7% vis-a-vis 23.8% over the same period last year and significantly higher than our margin guidance of 27% to 28%. The effective tax rate stood at 22.1% for FY '26. For FY '27, we expect the ETR to be about 25%, 26% due to the phasing out of incentives on some of our domestic facilities. Turning to the balance sheet. Operating booking capital stood at INR 7,132 crores as of 31st March '26, which translates to 87 days of net working capital as compared to 110 days recorded last year. ROCE for the year translates to 28.4%. Net cash stood at INR 4,636 crores as against INR 310 crores as of 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 ensure the long-term mission of the company, including on the specialty front. On the ASC front, Lupin continues to make tremendous progress or 50% of our total energy consumption now comes from renewable sources. During the year, we achieved an important milestone with the first-time inclusion in the Dow Jones best-in-class indices. Reflecting our consistent focus on sustainable, responsible and ethical business, Lupin has been included in the [indiscernible] as well as the Emerging Markets index. On the people front, we continue to strengthen our organization capabilities through robust systems and processes. Our workplace culture has been nice with great -- as a great place to work, certification across 13 countries covering all our operations globally. With this, we will open our floor for discussions.

[Operator Instructions] Thank you. We'll take the first question from Tushar Manudhane.

Congratulations on great set of numbers. I see congratulations on great set of numbers. That's of course. Secondly, just a cavitation on guidance for FY '27. [indiscernible] highlighted single -- high single-digit revenue growth with 25% EBITDA margin.

That's correct. We did say that we would be looking at around about 25%, about 25% the vicinity of that for the full year and of course, high single-digit number in terms of overall sales growth.

So effectively, are you sort of factoring the competition for [indiscernible] kind of a product and which is why you see EBITDA margin lowering down in FY '27?

Yes, we have factored that in, both the competition for Mirabegron as well as Tolvaptan.

And just as far as Q4 is concerned, compared to Q3 FY '26, while the revenue has sort of moved up on absolute basis, but EBITDA has moved down. Is it to do with the U.S. business profitability going down or ex U.S. geographies with moving down? If you can clarify that on.

There are 2 parts to that. Essentially, the margin -- the EBITDA margin decline because of there's a slightly increased manpower cost, as you can see. The second is essentially, we have captured what we have paid out Astellas on account of Mirabegron in because of the settlement as part of the manufacturing other expenses line. That's also included. And there's, of course, the component of foreign exchange that's been captured out there.

So it's largely to do with this U.S. Mirabegron related aspect, which has sort of dragged the EBITDA on a quarter-on-quarter basis, largely?

The other expenses line.

We'll take the next question from Neha Manpuria.

Vinita, how should we think about the U.S. business in the next year given what you mentioned about the Tolvaptan and Mirabegron? Do you see any other product launches which could be meaningful? I know it's difficult to sustain this base, but even as we see competition in Tolvaptan Mirabegron, what sort of product launches should we look forward to over the next 2 years, which could -- which probably gives us confidence on the 25% margin?

Yes. So with Tolvaptan and Mirabegron as well apart from the additional competition, we still see the generic market growing just given the generic penetration in Tolvaptan is under 40%, and Mirabegron is just reaching 50% right now. So there is the potential for generic additional generic penetration and expansion of the marketplace despite additional competition. So that's one. So we do expect them to be material contributors, especially in fiscal year '27. I mean apart from that, I think in the next fiscal year, our Ravicti product, the GPB is a material product for us in fiscal year '27. We have Saxenda that we hope to launch in the second half of the year, which would be a material product for us. So we have 20-plus products. We have 21st 2 funds as well. We have as we start as well as rivaroxaban that both the exclusive dosage form that we have first to file on. And then another big opportunity as we look at it right now for fiscal year '27 is [indiscernible] that we just entered into a partnership with Valorum and expect that from Q2 and Q3 onwards will start ramping up and be a material contributor to the fiscal year. So your question about the next 2 years, in fiscal year '28, we see potentially the impact of both the full year impact of pegfilgrastim as well as ranibizumab that we expect to launch later in fiscal year that should be a material opportunity for us in fiscal year '28. Also, we're in the final stages with Dulera at this point, just responding to the last query from the FDA and would expect that product to be in the market in fiscal year '28. Plus, we have a material 505(b)(2). Epaxiban, new dosage form that we filed to the agency. We expect that to come to the market in fiscal year '28. So yes, a good number of product launches. Some exclusive first to files, good impact of the biosimilars and 505(b)(2) starting.

That's very helpful, Anita. And my second question is, I think there was a mission mentioned about capital allocation. Given the increase in cash balance, which will only go up with these U.S. launches, how should we think about capital allocation priorities? I know you've mentioned this in the past. So I just wanted to get a sense of what we are seeing in terms of opportunities in the market, what's interesting you? And what are the challenges in terms of not being able to deploy that money?

I mean, we, of course, would like the right opportunity so we can deploy capital effectively, but remain very focused in really allocating material portion of our capital to assets either and -- on the specialty side of the business for the developed markets like this VISUfarma acquisition, or assets that can complement us in India, both on our existing therapy areas as well as bolster the therapy areas that we want to build. So we continue to be very focused in really looking for assets in the specialty segments that we've identified. Now that we have transacted on VISUfarma, we are seeing a high flow of ophthalmology assets, which could be pretty interesting for us. And likewise, continue to look for pulmonology as well as rare neuro assets as well.

So on the specialty side, the dearth of assets is not an issue, right? So there's enough and more that you can look at. So it's about us selecting the assets that we want.

Yes. It's really finding the right assets that from a risk standpoint, meter internal criteria as well as give us enough in terms of potential to be meaningful to grow our specialty business.

[Operator Instructions] In the meanwhile, Bino, you can take the next question, please.

A couple of questions from my side. You have the settlement. Is it fair to assume that in Q4, you have sold significantly Mirabegron compared to Q3?

Yes, we have had some growth in Mirabegron in Q4 versus Q3 just because of the growth in share -- market share for the generic.

And third player who are sitting with stoles have they already entered the market?

No, they haven't entered the market as of yet. We believe that they are waiting for product supply.

Got it. And on Tolvaptan, what is the time line for competition entry that you are now looking at? I believe there is a patent expiring in September this year. Is that a relevant time line?

Yes, that is the time line that we have taken into account in our plans.

Got it. And one final question to Ramesh. The impact of PLI going away on other operating income, is that completely in the base now? Or will we see some more decline from these levels?

No, I think more or less, there will be some PLI coming in next year as well. We'll come back here.

Okay. So this quarterly run rate roughly is maintainable?

Yes. Kind of.

We'll take the next question from Damayanti Kerai.

Yes. My first question is on VISUfarma. So earlier you mentioned this will add around EUR 50 million, EUR 60 million sales on top line and 25% margin. So I just want to hear your thoughts on where do you look this business to grow in, say, next 2 to 3 years? And what would be the key focus segments here?

Yes. So there are multiple areas where strategically, the VISUfarma acquisition adds to us. Number one, geographically, it expands our presence from U.K., Germany, France to Italy and Spain markets that we have had no presence in. And just leveraging the presence across the ophthalmology portfolio, taking our respiratory products are biosimilars, the muscular into this market is a real opportunity for us that we see as a potential of growing our overall footprint in Europe. Second, just given the pipeline that VISUfarma has in the ophthalmology front, we expect the business to -- in the ophthalmology side continue to grow. Double digit in the countries that we are now present in Europe. And third, the portfolio also has a fit in other emerging markets for certain. And our team is also looking to see whether we can launch in some of the developed markets. But in Latin America and Southeast Asia, we have the potential of leveraging the VISUfarma portfolio into these markets. So multiple areas of synergies that our team is working upon. And we remain confident that this is going to be a material step in enhancing our business in Europe as well as on the specialty front.

Sure. Vinita, the top line should comfortably cross the 100 million mark in 2 to 3 years, right, if all these factors play out well?

Yes.

Okay. That's helpful. And you have the sales team and on ground support all available with this business? Or do you need to invest a few more as well?

No. Actually, it came with an excellent team on the commercial side as well as marketing. And we are -- majority of the team, we have onboarded into Lupin to be able to both build on the current ophthalmic model, but also expand Lupin's other therapy areas into these regions.

Okay. That's helpful. My second question is on your settlement for Mirabegron with Astellas. So you had one prepaid component, which I believe is sitting in 4Q numbers. And on an ongoing basis, you will be paying per unit cost, right? And that will be part of the ongoing operating expense. So if you can clarify on that?

Yes, there are 2 parts to that. There is one element, which, of course, will be captured as part of manufacturing other expenses. And then the second part, it actually gets amortized over a period of time.

Okay. So any indication like which will be a bigger component, whether it's part of operating expense or the one which is amortized?

So clearly, a day depends on the sales at this stage. So the first component is actually variable. The second is just an amortization spread over time.

And we have factored in the additional cost per unit in our gross margin going forward and the amortization of the $75 million will be in the next 2 years, pretty much.

Okay. My last question is regarding one, which we earlier discussed, [indiscernible]. Can you update on the status of that particular product?

Yes, we expect to launch the Dabhasa 505(b)(2), we're expecting to launch it in fiscal year '27.

[Operator Instructions] In the meanwhile, we take a 10-second break to have more hands and more depth. Thank you so much. [Break]

Thank you so much for your patience. We can take the next question from Vivek Agrawal.

A couple of questions on biosimilars. One is on [indiscernible]. So how comfortable you are with the economics of this product or if you look at the current market dynamics, right, the prescriptions have shifted to a [indiscernible] long duration. And if you look at the existing or the current incumbent biosimilars, they have dropped this product, right, from the market. So what gives you confidence that this product is going to be a material product for you?

I mean, we actually are seeing a good amount of traction with the FDA in getting a product to market. The other companies have had challenges in product supply, and we think that has been part of the reason why the product is out of the market. Also, I think you're going to see companies relaunching ranibizumab. So we do believe that while part of the market has shifted into aflibercept, there's still an opportunity in ranibizumab. Also for us, we have both the prefilled syringe as well as the while, while majority of the competitors have [indiscernible]. So we see also an opportunity for our product to be differentiated in the marketplace.

Understood. And is it possible for you to update on pegfil on body product? So what is the current status? And what is the launch time lines for this product?

Yes. So we are pretty far along. We should be able to file this fiscal year. And I know we planned to launch it in fiscal year 2019, but hopefully, we should be able to launch in fiscal year '28 itself.

So -- I didn't get it. So basically, it's a FY '28?

Or FY '29 launch. One of the 2. Depending on FDA approval.

Understood. So you talk about, let's say, around 4 products in the biosimilars. So which are the other 2 products, if it is possible for you to highlight?

So pegfilgrastrim and ranibizumab, the OBI, which, of course, is pegfilgrastrim, but a different dosage form and aflibercept. And the fifth one is eternacept in '29.

Understood. And just again, one more question on biosimilars in the next couple of years, what kind of revenues that you time at from the sales of biosimilars only in the U.S.

We haven't called out the actual revenues from biosimilars, but the meaningful each product is pretty meaningful in our P&L going forward. We really look at the biosimilars opportunity as a very -- very similar to our respiratory opportunity over the next 5 years.

We'll take the next question from Saion Mukherjee.

One question, just clarification. Ramesh, you mentioned revenue guidance, high single digit. Is it in rupee terms? And what's the currency assumptions that you've paid?

So if there is further depreciation will be, obviously, there is a benefit that would be -- that we would be taking in. So what I'm -- is that at a time that we actually constituted the budget, it was about 3 months ago.

There is 2 terms net repeat terms. Understood. The other 1 is on there has been some inflationary pressure because of freight and raw material, given the Middle East crisis. So what's the annualized impact of the same that you're seeing on the P&L if the situation were to remain at the current level?

So clearly, that is affecting everybody, and these are dark clouds on the horizon. When it comes to freight, for example, ocean fretting is 15% higher air freight is about 60% higher. And there are, of course, issues in terms of raw material costs, availability of chemical sometimes [indiscernible] prices and all of that. We have estimated that. So clearly, we are monitoring it on a very down on the basis and take appropriate action in terms of possible price increases as and when we think it is absolutely something that needs to be done.

Okay. But will you be able to quantify, I mean, like what's...

I don't do it at this stage. So when we have actually reckoned the 25%, we have actually taken account dollars as well. So it's still too many moving parts at this stage.

Okay. And finally, just one question on your product filing in the U.S. I think you mentioned about on-body products. But what about the respiratory products, [indiscernible] biosimilar. What's the time line with respect to filing for this product? And when should we expect launch?

So [indiscernible] is actually in the works right now. and will be a current fiscal year filing. And the other etanercept also will be in the current fiscal year. We pretty much have the entire just here for etanercept. There's very little work to be done to be able to file it. And there are material other products that we are planning to largely for the U.S. We have 8 to 9 product filings in fiscal year '27 on the respiratory front.

And ELLIPTA, do you have any timeline for that?

Yes. ELLIPTA, we are still working on it, has been challenging for us, but we continue to work on both the Brio and Trelegy products.

We'll take the next question from Kunal Randeria.

So first question is on semaglutide opportunity across emerging markets. Are there any particular markets that you would like to call out that can make a meaningful contribution in the next couple of years?

So I think the big market for us is India. Obviously, we've already launched in India. I think South Africa would be the other reported market Brazil as well. through partnerships in markets like Canada and the like as well. But these 3 markets will probably started off for us.

Nilesh, would you like to maybe give some color -- more color on -- India, obviously, you had launched. But what about Brazil, Canada, some time lines that you would like to share?

South Africa also this year. Brazil also this year.

Also Brazil, Canada should really be filing this year, so launch hopefully next year.

Right? So -- but the factors that you may not be on the first wave. So will it still be meaningful?

We think in the emerging markets where we have really built a market presence on the diabetes metabolic front, like I mentioned Brazil with the DAPA launch and now EMPA launch, we're really creating a good position in the metabolic space. We see a good opportunity even as a late comer. And I think in the pure generic markets, it will be tougher. But in the emerging markets, it should continue to be an attractive opportunity for us.

The second question on biosimilars. So I understand you have vectors and maybe an set a few years down the rig in the U.S. But the entry barrier now for biosimilars is going down, the cost is going down. So I'm sure a lot more players would come in. Do you maybe envisage a situation where the price erosion might be a lot steeper than what you are currently factoring in, let's say, by FY '29, '30?

I think unless there's a real material shift in the market model. We really see the new entrants having -- bringing an advantage to the overall economics in the biosimilars segment. And from our perspective, the first few products that we have, obviously, we've been working on these for 5-plus years. But as we look at the future pipeline informed by the additional the reducing hurdles from a regulatory perspective and easier go-to-market access. In the U.S. also equally, we are finding in euro as well. There is a more efficient model especially where countries like Germany are starting to tender biosimilar products as well. We see an opportunity for products where we are in the first wave. And that have a limited number of competitors. So our focus from a pipeline perspective is really on products where we can be in the first wave or limited number of competitors that can give us a unique positioning. Mean we have a good positioning on the ophthalmology front beyond biosimilars with VISUfarma and other products that we are planning to bring into the market. So we think it really enables us as an ophthalmic player to bring in both the affordable biosimilars as well as innovative products. But beyond that, the other pipeline that we are investing in for the future is a very selective pipeline that we're going after.

Got it. And just how big is the biosimilar franchise as of now?

I mean it's -- franchise in terms of...

From a revenue perspective?

Right now or?

About $50 million right now and translated to [indiscernible] this financial year itself.

Yes. So sir, just to clarify, largely, it's from etanercept in Europe, and these would not be the end user sales, right? It would be maybe a royalty or profit share that you might be getting?

Yes. I mean it's through partners, primarily.

The next question is from Shashank Krishnakumar.

First one was on [indiscernible] just wanted to check are you hearing anything incrementally in terms of competition there and whether our FY '27 guidance sort of any potential generic?

Yes, we don't know for certain. I mean we have been aware about some companies talking about the fact that they have filed products. But just given how long it takes to get these products right. We're not certain that we would see additional competition in fiscal year '27.

Secondly, other expenses [Technical Difficulty] [indiscernible].

I think your voice is going in and out, actually. We can't hear you clearly.

The acquisition-related costs, which we have alluded to within other expenses. Was that a meaningful figure this quarter?

The acquisition of cost...

Yes. Acquisition cost is also included, a portion of that.

Is that a meaningful [indiscernible]?

Well, it's actually part of the overall cost. So there are a host of things that actually goes into, as I said, other expenses this time around. We have, in fact, in the Mirabegron settlement, we got ForEx, There's, of course, the higher component of R&D. And there's, of course, the M&D expenditure also.

Got it. And just the last one on ELLIPTA. So I just wanted to share the challenges that is easing is it with respect to the device? I think one of our has also recently entered into a mateship for the device. So what exactly is the challenge we put sort of a explain what is the core in terms of the tagline.

Yes, it is really to achieve the product PK. And we believe that we've got the right device in place. It's really the product PK getting that right. And we're finding that the brand itself is fairly variable.

We'll take the next question from Shyam Srinivasan.

Just the first one on semaglutide in India. So how has the launch gone, I think, Vinita, you mentioned the top 2, top 3. So just what were expectations maybe some of the dynamics given that a lot of investor interest, if you could just tell us how things have panned out. And now we probably don't yet have April data, for example. So just if you could tell us what's been the experience prescription behavior, the vials versus the -- even the pen debate, if you could double-click there, please?

Yes. I think it's been a pretty solid launch pretty much as good as expected or even better. We always expect it to be a strong player, given our cardiometabolic product from [indiscernible] is a unique pin, and I think that's a differentiation in the market as well. Our patient support program was pretty solid as well. So a good start. I think we are the #2 company as a generic one, the net product as a product itself. So a good start, but very early days, we're talking about 9 days of data. Next week, we'll have data for April as well. We've obviously had substantial increase in primary in the second month, but I mean time will show. But I think our goal is very clear to be a top 3 player in this as generic semaglutide, and I think we're well on track. As far as device is concerned, I think the acceptance for the pen is pretty solid. And I'm glad that we're playing there.

Yes. So Nilesh, I remember in our earlier comments, you talked about the INR 1,500 crore overall market, 50% with the heater. Has the volume uptick surprised you guys? Do you think there's a revision upwards in terms of SMA generic play, you think? Or it's still very early days?

I think the GLP-1s you're seeing is safe to always take it upwards. But I think the -- I think it's just too early to really predict long-term rig you saw how quick [indiscernible] became the biggest product in India. -- and now it's flattened out, right? So how important is it generic, how important is [indiscernible] visit multiple things to play out. There are so many other products that are going to come along as well. But clearly, this is pretty widely accepted therapy. The number of prescribers a significant number of patients that have gone on to this is very material as well. So I think this is one of the biggest launches for the industry.

Got it. And just my last question, just again back on the margin guidance, right? So we're going from 29% this year to 25%, let's assume. But quarter 4 had some headwinds already given that we had a settlement and maybe some of it played through in Q4 as well. So is there an extra slinking of conservativeness in our margins? Or you think during the year, there could be upside surprises?

No. This is actually as a result of -- we reckon that there could be some competition coming in for Tolvaptan and possibly for Mirabegron next year. So that would actually, in some ways, impact our overall margins. clearly. So -- and of course, as you could -- as you would see, our R&D expenditure is set to -- is slated to increase a bit. So that has also been captured in the overall guidance.

We'll take the next question from Vishal Manchanda.

On the albuterol inhaler market, I wanted to check whether you expect any adverse impact on account of the GSK launch. So they are supposed to launch a green unit around third quarter of this financial year. So do you think the other albuterol inhalers on the market will see an adverse impact?

We don't think so. We think that their product is really going to be branded version of Ventolin, that's what they have -- we've been able to tell based on what we learn. And we hope that it actually expands the market for albuterol. And we also are self working on the green propellant MDIs. So we're looking forward to see how the launch goes. And we'll track it very closely.

So since you are working on a green problem, too, [indiscernible] a brand or can you launch -- need to launch a brand?

Well, so it's very early to tell. But just given where things are, if we launch after the brand comes in, it will really be a generic green propellant product. And if you look at the Ventolin product, it's not had any generics so far. I think Cipla is the first approval. So that market is -- has been pretty much branded and GSK has the opportunity of converting it into the new version.

Yes. And another one on the innate side. Are we planning to file Symbicort and Advair or we don't intend to do those products.

We do have Symbicort in our pipeline, and we have Advair HFA also in our pipeline.

And any filing time lines?

Like I mentioned, we have like 9 products in the current fiscal year. So it's a material year for us with all the work the team has done over the last couple of years. We'll come back in the next quarter or so with the products and actual filing time lines.

Okay. And just another one on Risperdal Consta. If you could share how the product is doing and whether you intend to file other long-acting injectable products based on your know-how on Risperdal Consta.

So the product has done well so far. Actually, we've not been able to keep up with the demand. We manufacture the product to the CMO and have struggled to really ramp up. I mean, the brand actually has had supply issues as well. So there has been an increased demand in the marketplace that they're trying to work hard to see how we can leverage our position. Also, Teva has had supply issues with their supplier of the product as well. So there's a real gap in the marketplace, which is a nice problem to have, and we're trying to see how we can best meet the incremental demand. As far as the platform goes, while we worked first on a generic. As we looked at the potential of the platform, there are multiple innovative products where the platform can be very valuable. So at this point in time, we have multiple products on for other brands in the platform and have a few conversations ongoing on potentially doing innovative product transactions with the platform.

You mean you doing your own innovative products or kind of doing that as a CDM [indiscernible]?

So we have both. We have a couple of our own innovative products in the platform as well as interest from partners to work with us on co-developing long-acting versions of their products.

Can we have Kunal Lakhan for the next question, please? Or Vivek, you can come in Vivek Agrawal for the next question.

Yes. Just one clarification on the products, Toopran and Mirabegron. So you talked about the Mirabegron competition possibly next year, if I heard right.

That's right.

So you're not expecting, let's say, any additional competition in FY '27 in this product?

No, FY '27 is next year for us.

[indiscernible].

Okay. Okay. Understood. And just one question on the overall U.S. business, right? We have done close to $1.3 billion of revenues this year. And then there are a lot of moving parts, couple of products will come down in FY '27 and then we will see some kind of additional competition. It is a erosion in FY '28 as well. So it would be helpful if you just give some number, ballpark number of U.S. revenues for '27 and '28 to work with?

Yes. So in the past, we've said that we should be able to sustain the $1 billion plus. At this point, we think that based on the competition that we foresee in products like Mirabegron and Tolvaptan. We should be able to get to a level compared to the current year where maybe it's a high single-digit or low double-digit erosion in terms of revenues. And that's, of course, a combination of the current products and as well as new product launches, I mean, with our injectable launches with [indiscernible]. We expect to offset some of the erosion. And we expect our base business also to grow in the U.S.

Understood. So if I heard correctly, right, so in FY '28, you are expecting that U.S. business $1 billion plus -- close to $1 billion plus, right?

In FY '27. We expect it to be $1 billion plus.

We take one more question? We'll take the next question from [indiscernible]. Thank you so much for all your questions and most importantly, patients. We'll now hand the conference over to the management for the closing comments. Thank you.

Thank you, friends, for all your questions. Hopefully, we've been able to answer all of them. Otherwise, we will take them off-line. As mentioned, we have been very pleased with the performance our team has been able to deliver in fiscal year '26 and continue to work hard to be able to exceed both our expectations as well as the market expectations in fiscal year '27 and beyond. Thank you again.

Thank you.

Thank you, Ma'am. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us, and you may now exit the webinar. Thank you.