Mankind Pharma Limited (MANKIND.NS) Q1 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Mankind Pharma Q1 FY '26 Results Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand over the conference over to Mr. Abhishek Agarwal from Mankind Pharma. Thank you, and over to you, sir.

Thank you, Farheen. Good afternoon, and a very warm welcome to our Q1 FY '26 Earnings Call. On the call today, we have Mr. Rajeev Juneja, our Vice Chairman and Managing Director; Mr. Sheetal Arora, Chief Executive Officer and Whole-Time Director; Mr. Arjun Juneja, Chief Operating Officer; Mr. Sudipto Roy, Senior President, Sales and Marketing; Mr. Ashutosh Dhawan, Chief Financial Officer; Mr. Prakash Agarwal, President, Strategy. We will commence today's call with Mr. Rajeev Juneja, who will provide a summary of our performance over the last quarter, followed by Sheetal Arora will share detailed insight on our business performance. Mr. Ashutosh Dhawan will then give an overview of the financial highlights, post which we'll address any queries you may have. Please note that today's discussion includes certain forward-looking statements reflecting management's expectations for future performance of the company. These estimates involve several risks and uncertainties, and actual results may vary. Mankind does not undertake any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. For a detailed disclaimer, please refer to our investor presentation uploaded on our website. Now I hand it over to Rajeev sir for his comments.

Thank you, Abhishek. A very good afternoon, and welcome to our quarter 1 '26 earnings call. We are pleased to report a healthy start of '26 with encouraging trends as overall revenue of quarter 1, '26 increased to INR 3,570 crores, registering a growth of 25% year-on-year with EBITDA margin of 23.8%. Domestic revenue grew by 19% year-on-year, majorly driven by recovery in volume, consistent chronic outperformance and BSV consolidation. Mankind continued to consolidate its rank fourth by value with a market share of 4.9%, up by 10 bps quarter-on-quarter; and second by volume with a market share of 6.2%. Also, we are seeing encouraging trends with 1.8x volume growth to IPM, led by outperformance in anti-infectives and respiratory segments. Our chronic share, excluding BSV, increased by 190 bps year-on-year to 38.8% in quarter 1, '26 as compared to 36.9% in quarter 1 '25, driven by an outperformance of 1.4x to IPM chronic growth. OTC during the quarter, revenue from OTC business increased by 15% year-on-year to INR 237 crores. The continued secondary sales growth of our key consumer brands, including Gas-O-Fast, the growth is 36% year-on-year; Manforce Condoms, 18% growth year-on-year; HealthOK, 15% growth year-on-year; Prega News, 12% growth, reflects strong brand positioning and increasing market penetration. Further, the modern trade and e-commerce channel registered a growth of about 50% year-on-year, resulting its share to increase to 11% from 9% in quarter 1 '25. On the R&D front, we are increasing our focus to strengthen our R&D pipeline alongside GPR119 for anti-obesity and anti-diabetes. Our pipeline includes candidates targeting autoimmune disease, a novel antimicrobial resistance molecule and a recombinant biosimilar in the IVF segment. Further details are available in R&D section of our FY '25 annual report released this month. BSV published a refreshed study during the quarter, which is a Phase III non-inferiority study comparing the efficacy, immunogenicity and safety of BSV Foligraf versus inventors in International Journal of Infertility & Fetal Medicine, making it an alternate treatment option in ART. Further, BSV was the first Indian biopharmaceutical company to participate in European Society of Human Reproduction and Embryology, which is a global IVF platform to present BSV comprehensive IVF portfolio and clinical research strength. As we celebrate 30 years of our operations, we would like our shareholders to be part of this milestone. Therefore, the company's Board has approved an interim dividend of INR 1 per share. We remain committed to strengthening our growth trajectory, driven by our 4 pillars of growth, supported through deeper doctor engagement, scaling key brands and execution excellence. Now I invite Sheetal to further share insights into our business performance.

A very good afternoon to everyone. We sincerely appreciate your presence as we present our quarter 1 financial year '26 performance. Over the past 30 years, our purpose-led growth has been rooted in delivering quality and affordable health care to all, even in the most underserved parts of the country leaving a meaningful impact. Last year, we took as an opportunity to strengthen our foundation, enabling us to deliver consistent performance and pursue sustainable long-term growth. About domestic business, our domestic business revenue in quarter 1 financial year '26 registered a healthy growth of 19% year-on-year, driven by organic growth for the quarter of 10% year-on-year, further supported by BSV consolidation. Our secondary sales increased 9.2% year-on-year as compared to 8.6% IPM growth, led by 2.5% growth in sales volume and 14.7% growth in chronic therapies, indicating an overall outperformance of 1.1x of IPM. Our key acute therapies like anti-infective and respiratory outperformed IPM by over 1.5x. And our chronic therapies continued to deliver an outperformance in this quarter as well led by 1.5x in cardiology and 1.5x in anti-diabetes. Our recent launch brand, Crenzlo, is now ranked #1 in newly launched brand by value and Vonalong is the #1 prescription brand in their respective categories. While Nobeglar and empagliflozin brands continue to gain significant traction, our inhaler portfolio, including both Symbicort and Combihale combined are now the fastest-growing inhaler and are ranked among top 5 in the segment. Our presence in metro and Tier 1 cities also grew from 55% to 56% in quarter 1 financial year '26. About international business, our revenue from international business increased to INR 469 crores in quarter 1 financial year '26 up by 81% year-on-year growth year-on-year from INR 259 crores in quarter 1 financial year '25, with single-digit organic growth and BSV consolidation. Regarding BSV update, on the BSV front, we are witnessing progress across our integration initiatives and are confident of delivering healthy performance this year onwards. Additionally, we are also setting up a new biological facility to scale up and derisk operation at BSV's Ambernath site and expanding its biological R&D facilities to strengthen our innovation capabilities. As we move forward, we remain committed to building a people-centric organization by fostering a culture of empathy and care. To realize this vision, we are consistently investing in strengthening patient and health care provider engagement through meaningful transparent interactions, driving innovation with purpose, focusing on accessibility, affordability and impact, continuous learning and development to empower our teams and partners. We feel honored by the trust placed in us by doctors, patients and people. This journey is not ours alone. It's one of that we work together, guided by the gratitude and shared purpose. Now I invite Ashutosh ji to provide a detailed insight into the financial performance. Thank you so much.

Thank you, Sheetal ji. A very warm welcome to all of you. It's good to have you all with us today. I will now take you through Q1 FY '26 financial update. Our revenue from operations during quarter 1 FY '26 has increased by 24.5% year-on-year basis to INR 3,570 crores as compared to INR 2,868 crores in Q1 FY '25, which is driven by growth in our base business and consolidation of BSV results. Our gross margins for the quarter declined by 130 basis points year-on-year basis to 70.5% from 71.8% in Q1 FY '25, which is due to unfavorable sales mix and certain inventory-related accruals taken in the current quarter for slow and non-moving items. During the quarter, our reported EBITDA has increased to INR 850 crores from INR 675 crores, which results in a growth of 25.8% year-on-year basis. The reported EBITDA margin for the quarter is at 23.8%, which has increased by 20 basis points on year-on-year basis. If we compare reported EBITDA margins with last year's adjusted EBITDA margins, there is a decline of 120 basis points from 25% in Q1 FY '25 to 23.8% in Q1 FY '26. This decline is in adjusted EBITDA margin of 2 basis points is primarily driven by reduction in gross margins. The R&D expenses for the quarter was INR 79 crores, which remains at 2.2% of sales and is higher than R&D spend of 1.7% of sales as incurred during Q1 FY '25. The finance cost for Q1 FY '26 decreased to INR 171 crores from INR 191 crores in Q4 FY '25, which is on account of repayment of commercial papers amounting to INR 500 crores in the current quarter. In Q1 FY '26, the depreciation and amortization expenses have increased to INR 219 crores as compared to INR 103 crores in Q1 FY '25, which is primarily driven by depreciation and amortization impact related to BSV assets. The effective tax rate for Q1 FY '26 was at 17.7% as compared to 16.8% in Q4 FY '25. The profit after tax for Q1 FY '26 has decreased by 17.4% year-on-year to INR 445 crores on account of higher finance cost and depreciation cost pursuant to BSV consolidation with diluted EPS of INR 10.6 per share of INR 1 paid. During the quarter, cash EPS, which is EPS adjusted for noncash items like depreciation and amortization has slightly increased to INR 15.9 from INR 15.8 in Q1 FY '25. The net operating working capital days for the quarter on trailing 12 months basis have decreased to 48 days as compared to 50 days in Q4 FY '25. The cash flow from operations has increased to INR 840 crores as compared to INR 546 crores in Q1 FY '25, which is on a year-on-year basis, an increase of 54%. This is primarily on account of consolidation of BSV operating cash flows and improvement in working capital as well as realization of certain government receivables, et cetera. Therefore, in this quarter, our CFO to EBITDA ratio has increased to 99% as compared to 81% in Q1 FY '25. Our CapEx spend during the quarter has increased moderately to INR 127 crores in Q1 FY '26 as compared to INR 125 crores in Q1 FY '25. CapEx as a percentage of revenue is 3.6%, which is lower than our guidance of 5% of revenue for FY '26. In line with our prudent financial strategy, we continue to strengthen our balance sheet and have reduced our net debt position to INR 5,249 crores as of 30th June '25, resulting in further improving our net debt-to-EBITDA ratio to 1.6x in Q1 FY '26 on trailing 12 months basis as compared to net debt to adjusted EBITDA ratio of 1.8x in FY '25. With this, we conclude our financial update and welcome any questions, which you may have. And over to you, Abhishek.

We can start the Q&A, please.

[Operator Instructions] The first question is from the line of Chintan Sheth from Girik Capital.

My question was on the biosimilar plant, which we are planning to set up in the Ambernath facility. What is the process and guidelines for that? If you can provide that.

Yes. Thanks, Chintan. So for the biosimilar facility, this is the facility, which we started in Baroda, largely to scale up as well as derisk the operations of BSV. The CapEx for Phase 1, we are looking at around INR 150 crores to INR 200 crores, and it's expected to close and completed by next -- end of next year, calendar year.

So in FY '26, the estimated cash outflow will be close to INR 100 crores for this facility.

And this is included in 5% CapEx guidance, it will be part of that or it will be over and above that?

It is part of that.

Got it. And when I look at the interest cost, sequentially it has declined. But are we planning to further repay debt or decrease, which are getting matured over the course of the year? How should one look at the interest cost for the year in this?

Okay. For the acquisition-related debt repayment, we have scheduled INR 2,000 crores to be paid in FY '26, out of which INR 500 crores has been paid in Q1 and the balance INR 1,500 crores, we are targeting to pay in October 2025. And the total interest cost towards this acquisition debt for this year would be in the range of INR 450 crores to INR 475 crores.

Got it. And lastly, on the gross margin, you mentioned something about the inventory write-off of slow-moving inventory. If you can quantify it or -- specifically recurring in nature, how should one look at?

Chintan, your voice is not very clear. If you can speak out.

Somehow, it's echoing. So I understand there is a drop in the gross margin of 1.3% year-on-year basis and 1.1% is on a Q-on-Q basis. So inventory-related accrual is forming part of this.

Sir, sorry to interrupt. Mr. Chintan's line has disconnected. So can we move to the next question?

Go ahead.

The next question is from the line of Rashmi from Dolat Capital.

Just again on the gross margin front, would you be able to quantify how much percent was from the inventory write-off and whether you still maintain your EBITDA margin guidance of 25% to 26% for the full year on a consolidated basis?

So these are more driven from the accounting standpoint, the inventory-related accruals, et cetera. So difficult to give a specific number; however, it's a common denominator both for Y-o-Y and Q-on-Q drop in the gross margin. In terms of guidance, we have maintained the guidance that our gross margins will be upward of 70%. And even in this quarter as well, it's upward of 70%. And we continue to maintain our EBITDA guidance of 25% to 26%. So we are not changing the guidance either for the GC or the EBITDA.

Okay. And other question is related to the dydrogesterone facility. We had -- most of the manufacturing is now done in-house, so what is the capacity utilization over there? When are we targeting the export market? And is it that the KSM we are still sourcing outside or that is also manufactured in-house only?

So for dydrogesterone facility, the capacity utilization is approximately 60%. We are expecting approvals to start coming in from international markets by the end of this year. So once the approvals start coming in, this capacity utilization will start increasing. So most of the activities are in the last leg in terms of qualifications, et cetera. And in the next 2 months, we'll start producing the KSMs also in-house.

Okay. Got it. And one more question related to your Panacea portfolio. Earlier, you used to mention how much growth and the sales run rate quarterly it is doing. If you can give that information as well?

Panacea is growing 25% plus kind of a growth. It's in line with our commentary we gave last time, continuously growing.

Okay. And one last question related to the -- a small clarification. You said domestic business organic growth was 10%. So this was -- this is ex consumer health you're talking or you're talking on the entire domestic business?

Entire domestic business including consumer health care, entire business.

Okay. And on the export front, how much is the organic growth?

On the export front, it's single digits.

Mid-single digit to high single digit.

Single digit.

Yes. Yes, yes.

The next question is from the line of Kunal Dhamesha from Macquarie.

I think just continuing on previous participant's question, if you could provide exact organic growth for our base business, that would be great, at least for the next couple of quarters till we see the annualization of BSV business?

Kunal, we have given the numbers. Sheetal ji mentioned, the overall company growth organically is 10%. And if you look at domestic also 10% and international is single-digit growth. So you can do the math.

Perfect. Perfect. And we are seeing that Panacea portfolio grew 25% year-on-year, which is a very small portfolio, right, INR 200 crores or something. But then of the 10%, then it would have still be part of meaningful growth. Is that the way to put it?

So it's part of the overall business. We don't call out Panacea as such because the brands are into various divisions now. So some part is in 2, 3 divisions. So we stopped giving numbers. When some participants asked, we have given the direction. Some brands are growing 30%, some brands are growing single digits. So overall basis, it remains a 25% plus growth. But overall, it would be still very small part of the overall company domestic business.

Sure, sure. And if you can also provide some color around the base business EBITDA margin, excluding BSV, given that BSV has some form of seasonality. I believe second half is stronger, right? And has that led to some form of operating deleverage in this quarter, which is kind of masking the base business EBITDA margin?

Yes. So your observation is correct. Base business, Mankind margins are -- operating margins are better this quarter versus BSV, as BSV is more second half skewed. And every quarter, you'll start seeing improvement in EBITDA margins for BSV also. And as far as Mankind is concerned and OTC business is concerned, there is a front-ending of expenses also, which happens typically in any domestic business. So this will actually lead to operating leverage in the upcoming quarters for the base business also.

The next question is from the line of Madhav from Fidelity.

Just one question. In the past few quarters, Mankind has been facing some -- we've been changing our sales force and making a lot of large initiatives to improve our sales force efficiency, productivity, et cetera. Just wanted to understand where we are in that journey? And by when do we expect Mankind to come back to becoming the industry-leading growth player that we've been in the past decade. So do we expect that to start from quarter 2? Or is it going to take a bit more time before we start gaining share again?

Madhav, this process started, I mean, approximately 12 months back and completed -- almost completed 99% in the month of March '26 -- 2025, I'm sorry. And now basically, some changes happened in first quarter in one of the divisions. Some happened in the second, some in third and fourth, so it is done last year. And as you can see that for a good number of quarters, our growth was single digit. Now in the first quarter, the growth is 10%. That itself talks about that changes are appearing. And as the time will pass, you'll see better things will happen. Let me reiterate one more thing that whatever we have said in the past, 4, 5 things we've said in the past, they have been done. One, we said that QIP will happen. Certain things should be repeated actually. It happened very fast. We said that our hotel business will be sold of Mahananda. It was done. We said that TTK prescription business will be shifted to Mankind. It has been done. We also said that we will derisk and make one more factory biological manufacturing plant that will be completed next year. It is happening so fast. We also said that we'll do expansion in R&D side. We also did that. One more thing we said that, that Mankind would become catalyst in promoting BSV brands: AntiD, snake bite ASVS, social messaging will start. It has been done. So things are happening at a fast pace. One thing should be kept in mind, everything happened in the month of November last year. So it's only a few months when BSV has come in our fold. You say that 3, 4, 5 months and we have just now proper grip on BSV. Just reminding everybody, I reminded these things.

No, sir, makes sense. I mean the reason I ask that is, if you see the IPM data over the past decade, Mankind has been the one company, which has consistently gained share. And last year was obviously because of some initiatives internally and the acquisition, for a few quarters that did not happen. So just to clarify that now that we are back on track if we start seeing.

That's a good question. I mean you take the answer as well. I mean, look at this volume growth. It is 1.8x to IPM this time. I mean look at anti-infective, 1.6x. Chronic in cardio side, 1.5x; and diabetes, it is 1.6x. So when you start making changes, it takes time. It's a big organization. It has taken us approximately 12, 13 months. But now that whatever changes we did, fruits are appearing. And as time will pass, we'll come back to our own original pace. Mankind was in need of these changes. See, every organization goes through different phases. I mean, Phase 1 was when we reached to this particular level. Phase 2 is now we are competing with best of the companies. So we need to change as per the time. And any company who does not evolve, I've seen in my own career in '80s and '90s, if you just look at IPM, those top 10, 20 companies are no more there in top 20 companies. They have faded somewhere. Because to change, you need a courage. And I believe that whenever there is a demand, we always keep one thing in mind, long term, never the short term. We have never been a tactical, always been long-term policy believer actually. So since you asked this question, so I thought I'm just repeating everything.

Makes sense. And sir, just a second question on the BSV growth. Does that start coming back from FY '26? Any guidance on BSV top line growth for this year?

So for BSV, we are maintaining guidance, sales growth of 18% to 20% with margins tad higher of 26% to 28%. If you see in terms of performance, just to give some color, international business continue to be at mid-teen kind of growth. In the India business, there were 2 parts. So Rx business, we took a big corrective action in Q4. Sales were hardly anything. And in Q1, we have started to see very strong growth. You can see some data from secondary IQVIA. It is high double-digit growth. Also on the specialty side, we are seeing good traction. We had small changes, leadership changes, and we have started to see good Q-on-Q growth. In the next quarter onwards, I think we'll start seeing good Y-o-Y growth also. There is some Y-o-Y growth, but it is nominal at the moment, but the Q-on-Q growth is very strong and secondary traction is very strong.

[Operator Instructions] the next question is from the line of Neha Manpuria from Bank of America.

Just a follow-up on BSV. If I were to just do the math of the -- by excluding the organic growth, it seems like the BSV run rate hasn't shown any improvement year-on-year basis. So would it be fair to assume that a lot of the steps we are taking will start reflecting in year-on-year growth in the subsequent quarters to achieve that 18% to 20% growth that you're mentioning?

Yes, your observation is right. So it is flattish kind of both on an overall basis. But because we have taken some corrective actions and if you see BSV past trends of last 2, 3 years, it's more skewed towards second half. But at the same time, every quarter, you will start seeing improvement. So Q2 will be better than Q1, Q3 will be better than Q2 is our expectation. And the performance, which is delivered is as per our budget expectation. So we are online.

Okay. So the flat year-on-year isn't something that I need to be worried about to get to that 18% to 20% growth for the full year for the year?

Actually, some growth is there. We are not calling out the number, but there is some growth, especially in the international business and also in the specialty, so these 2 things. And anyways, Rx business, if you have seen, we have given a slump sale notification. So that will happen. That will, as communicated earlier and mentioned by Rajeev ji, this will be operated fully by the Mankind office because of the branded generic business. So these 2 assets, if you look at, it is high single-digit growth even in this quarter.

I think the second question that I wanted to ask was on the other expenses. It seems to have shot up pretty meaningfully versus the last 2 quarters run rate, which includes BSV. So just wanted to get some color on what's driving this higher spend? Is it related to our organic business, which is why we have seen growth come back versus the run rate? Because it seems to -- including BSV, which was flattish, it suddenly seems to have increased pretty meaningfully quarter-on-quarter.

You are right, Neha, in your observation. If you take Q1 FY '26 year-on-year basis, there is a bump of INR 131-odd crores in the other expenses. Out of this INR 131 crores, approximately INR 125 crores is coming from BSV and rest all is the inflationary adjustment. If you look at it quarter-on-quarter basis, the jump is around INR 82 crores, which is primarily driven because of increase in S&D expenses because they are front-loaded. And BSV expense base has been constant in this quarter. So it's more on the timing difference and the front-loading of expenses that you are seeing a bump. Overall, during the full year basis, they will normalize.

Okay. So it's more front-loading of expense. And sir, sorry, one last thing, the inventory number in the gross margins, we are not quantifying that?

We are not quantifying it at the moment. It's a mix of inventory accrual plus some of the business mix change. So it's a combination of 2, yes.

And this -- is this inventory...

But we are maintaining the same guidance.

Okay. And this inventory accrual, I mean, the slower nonmoving items, was this related to the BSV portfolio? Would that be a right assumption?

Not exactly. It has been across the board because the sales mix profile has changed. So that's why. So it has been both, yes.

The next question is from the line of Nihar Mehta from Bay Capital.

I just had one question on the OCF to EBITDA profile. So this quarter, you have seen a significant jump, so I wanted to know whether this is sustainable in the longer run, 90% plus? Or will we go back to our 70% to 80% levels going forward in the longer run?

Having it assumed around 80% plus level will be a fair assumption. So this quarter is 99% because some of the one-off realization of receivables have happened, but 80% will be a fair assumption.

The next question is from the line of Bino from Elara Capital.

I was looking at the depreciation and amortization expense for the quarter. It has come down from Q4 level from INR 231 crores to about INR 219 crores. Was there any change in the way amortization is done? Or is this the normal?

No, there is no change as such. So what happened was in Q4 FY '25, we have taken an impact of accelerated intangible depreciation, wherein on some of the IT-related intangibles, we reduced the life. So because of that, the Q4 depreciation was higher as compared to Q1.

But going forward, you can assume the same run rate for this financial year?

The Q1 run rate, right? Okay. And just on the tax rate, you had earlier guided to 21% to 22% for the full year. Do you maintain that guidance?

Tax rate, yes. So we would like to maintain 20% to 21% guidance from the ETR. For this quarter, it is 17.7% and 20% to 21% will be a fair assumption for the year.

The next question is from the line of Gaurav from Antique.

Just a clarification first. The business acquisition that we've called out, that is the movement of the TTK business to Mankind, right?

Correct. Correct. Correct.

And seeing that the turnover of this business has declined from INR 197-odd crores to almost INR 104 crores, '24 to '25. Any particular reason for a sharp contraction?

So Gaurav, we have called out in the last quarter that it was hardly any sales in the Q4 because we took some inventory-related corrections. And now as we speak, the growth has started. So if we can call out some of the numbers, for example, Ossopan is growing at 30% plus. Epidosin is growing at 50% plus. As I mentioned, secondary growth has started. And we're also able to see significant bounce back in the primary sales; however, it remains a little bit decline on a Y-o-Y basis because the first half of this TTK Rx business was heavy. But on an overall year basis, we'll try and achieve growth on -- significant growth on a last year base.

Okay. Okay. Second question on the India business. Seeing in your presentation that the modern trade and e-com share has increased to 11%, and that's growing to almost 50%. So are we the first movers in this trade channel? And what would be the economics of this trade channel? The margins would be higher or lower? And also is consumer health a big part of this modern trade and e-com today?

Thanks, Gaurav. So yes, the share of OTC business and the business channel, modern trade and e-commerce increased to 11%. But yes, and you are right, the margins is slightly on a lower side, but this is a stable business, and we'll continue to maintain our guidance -- EBITDA guidance of 18% to 20%, and we are not the leader. There is still room to grow and increase our modern trade and e-commerce share going forward.

We are under-indexed in this channel. So I think this is a very critical part of the growth apart from the general trade.

And kind of products we have, we are seeing very good traction on these channels.

But most of this will be consumer health, right, all your brands?

Yes, this is consumer health. This 9% to 11% share we have mentioned for OTC, this is not for pharma.

Correct. Correct. The last question, we've seen your peers give more insights into the dosage modalities and where they are in the development process for the GLP. Would you mind sharing an update on your pipeline and where you are and which all modalities and indications you're targeting?

On the GLP-1 that you're talking about, I mean, we are talking about semaglutide on GLP, where we will be launching when the patent expires, that is the question. The other one, which Rajeev ji mentioned in his speech was more regarding our R&D pipeline that we are developing, which is a GPR119. It is a novel mode of action where we are targeting obesity. It is unlike GLP-1, which are peptides and large molecules. This is a small molecule, which is targeting the GPR119 cell in the body. So that molecule, as we speak, is underway Phase II trials in Australia. So we should have some results in our hands by the end of this year.

And Sema, we would be targeting the oral and injectables both? And when do we see the respective markets opening up?

As soon as the patent expires.

So the oral patent doesn't expire in 2026 as well?

Difficult to comment on the patent right now on the call, but when the generics launch, we'll be there in the first year of launch.

[Operator Instructions] The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services.

Yes. Sir, with this -- just on the field force with all reset -- strategic reset done now and so is there any scope to add MRs now in FY '26? Or you would want to see the improvement in productivity and then look at it in FY '27?

We had mentioned by Rajeev Ji in his previous commentary also that most of the corrective measures have been done, almost done. So there is no scope to add MR and all the things have been done. So now we will focus on increasing the productivity in this year.

Got it. And sir, just on BSV, given that 18% to 20% growth in the coming 9 months. If you could just help this will be more exports-driven or more domestic-driven?

No, I think growth will come from both angles. So we are already -- as I mentioned that there's already growth seeing in secondary for domestic. I gave you examples of Rx, but let me give you some examples of the specialty business. So the fertility business, if you see FSH, our Foligraf is secondary growth is 35%. If you see Humog, Hucog, all are growing 10% plus. ASVS, which is the anti-snake venom is also showing high double-digit growth. So there's a good secondary traction. And hence, we are confident that primary will catch up. And international, as highlighted earlier, the growth expectation is upwards of 20%. So we expect that overall, if you do the math, we'll land up at around 18% to 20% growth for the BSV as a whole.

Got it. And on this international aspect further, like is it that the BSV already had registrations of the products in respective geographies and now it is the time to scale up those? Or there will be sort of a period where registration has to happen and then the growth sort of picks up?

So it's an ongoing process. The first objective is to increase the penetration in our core markets. So there, we are already seeing high double-digit growth. The second objective is for existing products in newer markets also, so we are exploring as we speak, we opened -- already Board approval has come for Russia. So we're expecting a couple of approvals. So there can be good growth. So it's a function of existing products in newer markets. At the same time, there's also some work going on newer products, which will be starting with existing markets and then even look evaluating for some of the higher semi-regulated markets in future. So there's a multipronged growth strategy, which is being played out.

Got it. And just on this biologic facility, if you could also share -- while you have shared the CapEx amount to be spent, just if you could elaborate on what capacity, whether it is drug substance, drug product both or if you could just elaborate on that aspect as well?

So this biologic facility would be divided into 2 phases. The first phase would be for drug substance and the second phase would be for drug products. And it is basically a risk mitigation strategy for the Ambernath facility of BSV. And also this facility will help us drive business into some semi-regulated and highly stringent international markets. So the facility is being built from that point of view.

Just conceptually on this, like given that we have such strong marketing strength and subsequently for the international markets also and sourcing the products from -- and then subsequently further focusing on distribution as far as this biologics aspect is concerned within BSV. So will that strategy be better off or getting a hold on the manufacturing piece is sort of quite relevant. The perspective here is that given that CDMO biologics, there has been a lot of facilities, which have come up. So from that perspective, if you could throw some light.

If you look at biologics, most of the people who are there in biologics are into mAbs or certain recombinants. There are hardly very few players globally who are making recombinants for infertility. BSVs recombinants are majorly into infertility where we are producing recombinant Hucog, recombinant FSH. We'll also be the first generic globally, as Rajeev ji mentioned, that we are doing some research in our R&D, where we will be producing follitropin alfa, which will be the only generic after Merck. So there are not many CDMO players available who are present in the biologics facility for the infertility space. Having said that, there's another product, which is AntiD, which is the first novel biologic, which has come from the R&D of BSV. There is no producer for it. So all the products, which are coming from BSV are all either first-time generics or novel products. So it is very important for us to have our own facility and our own R&D and the full supply chain control over the manufacturing of these products.

Got you, sir. And so this AntiD will require a dedicated facility?

No, it will be produced. It is currently being produced in Ambernath. But once Baroda is ready, it will be produced in Baroda as well.

No, no, I meant to ask this CapEx of INR 150 crores to INR 200 crores, will this be for the product specific...

It's including AntiD. It's including AntiD. It's including all the biologic products of BSV.

The next question is from the line of Navani Naredi from Naredi Investments.

I just had one basic question. The reason behind the 17.4% Y-o-Y decline in net profit despite the strong top line growth. I know it might be on account of finance cost -- increase in finance cost, but like will we be able to increase the net profit margin again?

So it's a factor of not only finance costs, it's a factor of increased depreciation cost. And then there used to be other income because there was surplus funds. So that has also become negative because of the debt being taken. And as we highlighted that our endeavor is to clear all the debt by FY '28. So till FY '28, there will be interest burden. And then slowly and gradually, the PAT is going to increase as we are going to liquidate our debt. But one thing we would like to highlight, if you look at it on a cash EPS basis, so we have shown a slight improvement in cash EPS in this quarter.

Yes, that I saw. So it's good, but I was just concerned about whether going ahead, we will be able to maintain -- like we will be able to increase the net profit or not. So that was my question, but it has been answered.

Certainly, we will do that.

Certainly.

[Operator Instructions] The next question is from the line of Sidharth Negandhi from Chanakya Wealth Creation.

Two questions. First one, the growth in gynae has -- while chronic growth has been very, very good and really kudos to the think to that, growth in gynae has trailed IPM, and that is obviously a big one considering both BSV has a massive gynae portfolio as well as dydro and the other products in Mankind, right? So any specific headwinds that you are seeing there? And how should we look at that growth? That's question number one. Question number two is on the antidiabetic portfolio. Currently, growth clearly is very strong ahead of IPM. But post GLP-1 genericization, how do you see the impact on that base business?

So Sidharth, to answer your first question, yes, your observation is correct that we have slowed down a bit in Kye, but the major impact has come from dydrogesterone and Dydroboon mostly. But if you see quarter-to-quarter, there is a steady upward movement for even Dydroboon. So we have seen some kind of strategic intervention what we have taken has given us results, especially Mankind has been very strong at the bottom of the pyramid of our ACP pyramid, where we have lost a bit initially, but then we recovered in last 3 quarters. And there is a positive trend if you see quarter-to-quarter. So year-on-year basis, definitely, even gynae also being a #1 player in this space, we will be doing well. And that confidence is coming in quarter 1 performance, in fact. And Dydroboon also will have a significant growth in quarter to come. Coming to the next question, I think, Sidharth, though antidiabetic, as you said, Mankind has been doing quite well. And even with our older brands, we are in a very good space. Our mature brands also are doing well, better than the market. And coming to the newer therapies, once these newer therapies comes to the market, you have seen traditionally also that the old molecules doesn't go away. So there are positions still for sulfonylureas, there are positions still for other molecules. So we have -- we are present in all the segments of antidiabetics. So even if suppose something comes up, we will be strong in those segments as well as we will be maintaining our position in the older segments. So if you consider the market change, considering a new molecule comes into antidiabetic, we have seen earlier also that the older molecules also sustained. So in those spaces also, Mankind will outperform those antidiabetic segment. I hope you got both the questions.

Yes. Got it. Just wanted actually to understand your guidance in terms of how those older segments may end up facing any headwinds in terms of growth. The next question that I had was on the Consumer Healthcare business where while there has been very, very strong growth, you've seen a sharp decline of 2% in EBITDA margins. And I'm assuming that's because of the sales mix where the contraceptives have grown ahead of Prega News. Just wanted to understand in terms of overall growth continuing at 15%, do we see a path back to 20% margins?

So Sidharth, don't go by 1 quarter. We always talk about the annual growth. Whatever projections have been given would be achieved. And the first quarter, the first half is always a bit more aggressive as far as the spending is concerned. So naturally, you see that EBITDA margin has gone down. But we have always said in the past as well that we'll maintain the EBITDA margin, but at the same time, top line growth is our #1 priority.

Go ahead on the growth on antidiabetic, if you can -- base business growth headwinds, if you can give some color.

So as I said, like there are certain categories like sulfonylurea, if you see, or maybe the other categories of old antidiabetics, it is not flat. It will not be a flat therapy because even when empagliflozin or maybe dapagliflozin when they have also been launched, it has not impacted so much on the existing therapy. So if you see the overall antidiabetic space, there are different categories of HCPs where these molecules are still steady. So Mankind, as you know, has been strong in most of the specialties. So in this case also, wherever the therapy goes, suppose it goes top to bottom, then we'll be also very steady at the bottom space. So I don't think there will be a significant impact in terms of overall business volume in antidiabetics.

Let me give you an example of that. This -- we took this Glizid from Panacea, growing at 25%. It's old molecule. So every molecule has its own kind of an importance in doctor's mind and different kind of patients require different kind of medicines. When EMPA came, people said DAPA will go away, but you look at the DAPA side, the growth is 20%. So plus because a lot of new patients are coming in diabetic side. So more patients are being diagnosed, more population is coming, universe is becoming bigger. So every medicine has a different thing. It does not make a point that some new will come and wipe out the older molecules. It does not happen like this.

Thank you. We can close the call, moderator.

Ladies and gentlemen, as there are no further questions, I now hand over the conference to management for closing comments.

Thank you for all your questions. And for any further queries, clarification, you can write to us on [email protected]. Thank you. Have a nice day. Stay happy. Stay healthy. Thank you.

Thank you. On behalf of Mankind Pharma concludes this conference. Thank you for joining us, and now you may disconnect your lines.