NATCO Pharma Limited (NATCOPHARM) Earnings Call Transcript & Summary

Dear shareholders, good morning, and a very warm welcome to the 40th Annual General Meeting of NATCO Pharma Limited through videoconferencing or other audiovisual facility. [Operator Instructions] Please note that as per the requirements, the proceedings of the Annual General Meeting will be recorded and available on the website of the company. I now hand over the proceedings to Mr. Ch. Venkat Ramesh, Company Secretary and Compliance Officer of NATCO Pharma Limited. Thank you, and over to you, sir.

Good morning, ladies and gentlemen. I, Ch. Venkat Ramesh, Company Secretary of your company, welcome you all to the 40th Annual General meeting, being connected through videoconferencing. The meeting is live streaming through webcast. I now request our respected Chairman Mr. G.S. Murthy to the meeting.

Good morning, all. I'm attending this videoconference from the registered office of the company.

Thank you. I now welcome Sri V.C. Nannapaneni, Managing Director of the company.

This is Nannapaneni. I am attending this meeting from our registered office NATCO.

I now welcome Sri Rajeev Nannapaneni, Director and CEO of the company to the meeting.

Good morning, everyone. My name is Rajeev Nannapaneni. I'm attending our Board -- AGM today from corporate office. Thank you.

I now welcome Sri S.V.V.N. Appa Rao, Chief Financial Officer of the company.

Yes. Good morning, ladies and gentlemen. This is S.V.V.N. Appa Rao, Chief Financial Officer of your company. I am attending this meeting from the corporate office of the company. Thanks.

Thank you. I now welcome Dr. T.V. Rao, Independent Director and Chairman of the Nomination and Remuneration Committee to the meeting.

Good morning, everybody. I'm attending this meeting from my sister's residence in Hyderabad. Thank you.

I now welcome Sri D.G. Prasad, Independent director of the company to the meeting.

I'm D.G. Prasad, Independent Director, participating in the AGM from my residence in Hyderabad. Thank you all.

I now welcome Dr. M.U.R. Naidu, the independent of the company to the meeting.

I'm Professor Dr. M.U.R. Naidu. I'm actually Independent Director of NATCO Pharma Limited. I'm joining this audiovisual conference of the Annual General Meeting from my house in Moti Nagar, Hyderabad.

Thank you, sir. I now welcome Dr. Leela Digumarti Independent Director of the company.

Yes. Good morning, everyone. I'm Dr. Leela Digumarti. I'm attending this meeting from Jaipur. Thank you.

Thank you, Ma'am. I now welcome to Sri P.S.R.K Prasad, Director and Executive Vice President, Corporate Engineering Services of the company to the meeting.

Good morning, everyone. I'm P.S.R.K. Prasad. I'm joining this AGM from our Mekaguda unit.

Thank you, sir. I now welcome Dr. D. Linga Rao, Director and President Technical Affairs of the company.

Good morning, everyone. I'm joining the meeting from my Mekaguda office.

Thank you, sir. I now welcome Dr. Pavan Bhat, Director and Executive Vice President, Technical Operations of the company.

Good morning. I am Pavan Bhat and I'm attending this meeting from the NATCO Kothur facility.

Thank you, sir. I now welcome to Sri Vikash Somani, Partner BSR & Associates LLP, statutory auditors of the company to the meeting. I now welcome Sri Kiran Kumar B., Proprietor BK & Associates, secretarial auditors of the company and also acting as scrutinizers for the e-voting process of the meeting. I now request our respected Chairman Sri G.S. Murthy to commence the proceedings off the meeting.

Good morning, ladies and gentleman. I welcome you all to this 40th Annual General Meeting. I am informed that 38 members are present for the meeting through video conference. I declare that the requisite quorum call is present and the Annual General Meeting is open for commencement. I now request Sri, Rajeev Nannapaneni Director, CEO, to readout the chairman's speech.

Thank you, sir. Dear shareholders, a very warm welcome to all. On behalf of the Board of Directors, I welcome all of you to the 40th Annual General Meeting of the company. I'm delighted to state that the year in review has brought remarkable growth in our company's business as we navigated through difficult times around the pandemic and the business challenges during that time. This performance of your company was supported through consistent commitment to quality, nurturing of our technical strengths and pursuit of marketing -- market expansion strategies. Our financial performance highlights the progress that we have made and inspires confidence for years to come. During the year ending March 31, 2023, our consolidated total revenues stood at INR 2,811.7 crores and net profit after tax of INR 715.3 crores. The increase in revenue and profits for the year was driven by growth in U.S. business and performance from subsidiaries in Canada and Brazil. Our Crop Health division has begun its journey contributing, with strong growth potential. Our company recorded domestic formulation sales of INR 374.9 crores during financial year '22-'23. During the year, we launched 11 products across 3 key segments as we continued to expand our NATCO Reach initiative to cover much wider base of doctors, including general medical practitioners. NATCO's carefully selected products needs to be leveraged with strong reach to doctors and patients. We firmly believe that the strategy would pay good dividends for growth of domestic business. The revenue and growth in the international business during the year was a clear outcome of your company's core strategy focus on select few molecules, work diligently for years and create blockbusters. We witnessed a total export revenue of INR 2,230.4 crores, of which formulation revenue was INR 2,063.2 crores and balance from exports of active pharmaceutical ingredients. Although majority of the revenue came from exports to the U.S, there was a good diversification of revenue with contribution from subsidiaries in Canada and Brazil. With our emphasis on aggressively expanding to new geographies, we hope to maximize return investment of carefully selected molecules. So, we are widening our reach internationally to diversify source of revenue. We are in process of registering key products in the MENA region and have plans to increase number of subsidiaries. During the year -- financial year 2023, your company launched in India the agro blockbuster product, Chlorantraniliprole pesticide formulation and its combination which are in liquid and granule form. Your company has created a strong presence among competitors in the industry due to significance of its product selection. Post launch, we are making our presence felt at the distribution and farmer level through several field marketing and advertising initiatives. We have now established a strong sales team in key agrarian states across the country as we continue to increase more personnel, build business processes at front and back end. Apart from CTPR and its combinations, we are working on a unique pipeline of products for both domestic and international possibilities. Your company proactively invests in state-of-the-art R&D and manufacturing infrastructure to ramp up of the supply of critical medications across the world with an emphasis on quality and global compliance. The R&D team comprises of over 465 highly skilled employees who are proficient researchers, scientists and product specialists. They are deeply committed to enhancing our intellectual property through innovation and dedication. Our first-to-market and first-to-file status demonstrates our patient-centric actions. During the year, our expenditure in R&D amounted to INR 195.9 crores. We spent 8.3% of our standalone revenue on R&D, a continued importance to business. Your management has established a clear sustainability agenda that emphasizes the importance of water, wastewater, waste and energy management and we are constantly striving to make advancements in these areas. In financial year '22-'23, about 27.51% of our total energy requirement was met through renewable energy sources. Our people and the relationship we build with communities are the foundation on which we grow and prosper as an organization. Our employees are the key to our success and as a result, we invest significant resources in ensuring that we are an employer of choice in all the regions where we operate. NATCO has corporate governance at the heart of its management approach. We believe that our governance framework supports our high performing and respectful culture and is underpinned by our values of integrity, openness and quality. Through NATCO Trust, we strive to tackle important societal issues by uplifting disadvantaged communities and fostering inclusivity and equality. During the year, 12,000 students were supported through 121 anganwadis. Our comprehensive approach strives to promote healthy practices and raise awareness about nutrition, mother and child health, and non-communicable diseases and preventive measures. We initiated two mobile clinics and two standalone satellite clinics at Kothur and Nagarjuna Sagar benefiting over 30 villages collectively. At NATCO, we value our people. We aim to hire and retain the best talent and provide a work environment where each person can thrive. It is through our people and culture that we create products that help consumers. As of 31st March 2023, your company's market capitalization stood at INR 10,285 crores. During the financial year, your company issued three dividends at INR 5.5 per share which amounted to a dividend payout of INR 100.4 crores. Dividend payout stood at 15.76% of standalone profit. I would like to extend my heartfelt gratitude to our employees for the passion and commitment they have shown during the year, and to our shareholders for their continued support in our endeavors. We also thank our financial institutions and various regulatory authorities for their support and guidance. By continuing to work with our key stakeholders and prioritizing sustainability, we will do our part to ensure a healthier tomorrow for future generations to come. I thank one and all. Thank you so much.

I seek this shareholders' permission for to the notice of the AGM and also annual accounts for year 2022 and 2023. And to take the auditors' report as read. As the report of statutory auditors is unquantified and without any adverse observation of comments, with your permission, I take the auditors' report as read. I request the company secretary to read out the contents of the agenda items of the meeting.

Thank you, sir. The agenda items of the meeting is -- meeting are: agenda item number one, adoption of audited annual financial statements for the financial year '22-'23. Item number two, to confirm 3 interim dividends aggregating to INR 5.50 per share, paid on equity shares during the financial year '22-'23 as dividend for the financial year '22-'23. Agenda item number three, reappointment of Sri Rajeev Nannapaneni as a director liable to retire by rotation. Agenda item number four, the reappointment of Sri P.S.R.K. Prasad as a director liable to retire by rotation. Agenda item number five, ratification of the remuneration of cost auditors. Agenda item number six, revision in the remuneration of Sri V.C. Nannapaneni, Managing Director. Agenda item number seven, revision in the remuneration of Sri Rajeev Nannapaneni, Director and Chief Executive Officer. I now request Sri G.S. Murthy to further proceed.

Thank you. The company has provided e-voting facility to the members from 26 September 2023 9:00 a.m. to 28 September 2023 5:00 p.m. to enable them to exercise their right to vote. For the members who have not availed the remote voting -- remote e-voting facility can now cast their vote through e-vote or electronically during the video conference. The results for the remote e-voting and e-voting during the Annual General Meeting along with this scrutinizer's report will be intimated to the stock exchanges within 48 hours of the conclusion of the meeting and the same will be uploaded on the company's website. I now request the shareholders to raise any questions on the reports and accounts. I request the moderator to call the names of the shareholders who got registered to speak at the Annual General Meeting one after the other and unmute their lines.

[Operator Instructions] I now invite the first speaker shareholder, Praful Chavda. [Operator Instructions]. Ladies and gentlemen, we will wait for a moment while Mr. Chavda is connected.

[Foreign Language]

Thank you very much. I now invite the next speaker shareholder, Santosh Kumar Saraf. [Operator Instructions]. Ladies and gentlemen, we will wait for a moment while Mr. Saraf unmutes his connection.

[Foreign Language]

Thank you very much. The next speaker shareholder Shrikant Jhavar has registered, however, did not join the AGM. We will move on to the next speaker shareholder Rangan Venkataraman.

Are you able to hear?

Yes, we can hear you, sir. Please go ahead.

You are able to hear, no?

Yes Mr. Rangan. Please go ahead.

Okay. But I'm at the airport. I would like to know that for the last 5 years, our market capitalization and the share price is hovering around INR 800 only. And we have not created really what the market capitalization is. Why? It's the paramount duty of the promoters to create market capitalization. But what about the export [indiscernible] papers about the FDA regulations or rejected or somebody is filing some suits and get getting? And what are the prospects for the next 3 years? I would like to know that. I think you have gone for a very big expansion. I think for the results of that which quarter it may arise actually. Otherwise, I don't suspect the integrity of the promoters, but I would like to know what is the business model? Why it's going on like that? Somebody is filing and with the rejection all this, as a layman, we are not able to understand that. What would be the future growth for the next 2 years? That's all I would like to ask.

Thank you very much. I now invite the next speaker shareholder Yusuf Yunus Rangwala.

[Foreign Language] We are the leader in all divisions, sir. And we are an excellent company, sir. Dividend track record, dividend bonus, everything given to the shareholders. [Foreign Language] They are a very hardworking, very active company. [Foreign Language] Sir, we are having a factory in Hyderabad. Sir, I would like to arrange -- I am very interested to see your factory and sir, I have nothing more to add. [Foreign Language] Thank you very much. May God bless our company. Thank you very much. [Foreign Language] Thank you.

Thank you very much. I now invite the next speaker shareholder Sanjay Banik. [Operator Instructions]

Hello? Am I audible?

Yes, sir. Please proceed.

Okay, sir. Sir, I am Sanjay Banik from Kolkata, the City of Joy. I am a shareholder of NATCO since the year 2011. Since then, I have not visited any AGM either physically or attended any AGM virtually. So this is my first AGM of NATCO, and I had a wish to see V.C. sir and Rajeev sir. So my wish has got fulfilled. Sir, I have some questions. Our company has posted highest ever revenue. Sir, how sustainable is this? Will we see a double-digit compounded annual growth in sales and profit in coming 5 years? What is your guidance regarding this? If further price erosion happens in U.S. market, how our company will tackle this? Sir, number two question is, our domestic formulation business is not performing well over the years as revenue from this is decreasing year after year. So what are the main reasons for this? Number three, sir, on the API side, we know that India is a good -- India has a good opportunity over the coming years to grab the market share because of reduced reliance on China on API supply. So, how our company is looking at this opportunity? My question number four is non-oncology revenue is also decreasing over the years. Sir, what are the main reasons of this? Is there any lack of innovation or our company's product cannot compete with others? My next question is, sir, what is the costly product of our company -- most costly product of our company in oncology segment. Is it of lung cancer, liver cancer or anything else? Next question is, sir, as the crop production business is getting bigger of our company, shall our management will consider to demerge the business in future? That's all, sir. I have full faith of the management of the NATCO. So it has generated a quite amount of wealth for me over the years. So I wish a better performance of the company in future. Thank you, sir. Thank you for getting...

Thank you, Sanjay.

Thank you very much. I now invite the next speaker shareholder Kamal Kishore Jhawar.

[Foreign Language]

[Foreign Language]

[Foreign Language]

Thank you. Thank you so much.

Thank you very much. Next speaker shareholder Afzal Mohammed has registered, however, did not join the AGM. I now invite the next speaker shareholder, Ramesh Maguluri.

Hello? am I audible, sir?

Yes, sir.

Good morning, everyone, sir, I'm Ramesh Maguluri speaking from Hyderabad. Hello?

Go ahead, Ramesh. Please go ahead.

First of all, I would like to congratulate the management for excellent performance. Sir, I have three questions, sir. Till now, what percentage of Revlimid has been sold, it's number one. Number two, sir, agrochemicals, how the things are shaping up? How are you planning to grow this space? And third one, sir, I understand that you're planning to -- you're planning for acquisition, whether it is domestic or overseas and what would be the size of the company I would like to know. Thank you very much, sir.

Thank you.

Thank you very much. Next speaker shareholder, Anil Babubhai Mehta, has registered, however, did not join the AGM. The next speaker shareholder Gundluru Reddeppa has registered, however, did not join the AGM. The next speaker shareholder Abhishek Jay has registered, however, did not join the AGM. We'll move on to the next speaker shareholder, S.V.R.B. Shastry. [Operator Instructions]. Ladies and gentlemen, we will wait for a moment while Mr. Shastry unmutes his connection. [Operator Instructions].

Hello?

You're audible, sir.

Good morning, everybody. Congratulations on the good set of numbers. We are very much happy with the dividend you created to us. My question is, there is some talk of erratic monsoon this year. What is the impact on the CTPR sales? Is it on the expected lines or above expected lines or below, what is the impact? And second question is, some years back, one analysts mentioned that NATCO is having a very good land bank in Hyderabad. What is the -- how much land bank we are having and what is the value? If you declare this, it will enhance the value of the share in the market. Thank you very much, and I wish you all the best in your future endeavors. Thank you very much.

Thank you.

Thank you very much. The next speaker shareholder, Satishchandra Shantilal Doshi.

Hello? Am I audible, sir?

Yes, sir, you are audible. Please proceed.

I have sent the questions over mail. I'll just read those out, sir. So the first question is what is the market size and likely launch date of our different FDF products. Second question is, sir, what is the status of suit relating to pomalidomide? What is the legal status of the appeal relating to ibrutinib and have we appealed to the higher courts? And sir, the next question is, could you please provide details about the new products in the pipeline for the Brazil and Canada market, including a time line for their expected launch? Also, how was the performance of both the markets during the first 2 quarters of FY '24? Sir, the fourth question is, could you please outline the strategy for launching new products in our pharmaceutical division in India? Are we planning to continue with our current approach of introducing the products at highly affordable prices, or are we considering to shift towards launching them at market prices moving forward? How did onco products perform last year and growth going forward? Sir, just a moment. And which are the non-oncology brands and the growth prospects of the same? Sir, what is our planned business model for agrochemical sector? And are we considering direct sales to customers under our brand, or we'll be primarily engaging B2B transactions? What is our production capacity, capacity utilization and asset turnover in agrochemical sector? Sir, what is our intended strategy for the launch of upcoming agrochemical products? Are we planning to follow the same approach of patent challenge as we did in CTPR segment of patent challenge? Sir, the next question is to what extent is our distribution channel in the Indian agrochemical business is efficient? And how can we leverage our existing distribution network from the pharmaceutical business to enhance our presence in agrochemical sector? Sir, what synergies are anticipated from acquisition of Pee Safe and ISCA Inc., I-S-C-A I-N-C, Delaware Corporation. Additionally, could you please provide information on the allocated budget for such acquisition going forward? Sir, with the substantial cash position on our balance sheet, are we currently evaluating options such as additional share buybacks, increased dividend payouts or discussions regarding potential new acquisitions? Sir, thank you so much, and all the best, sir.

Thank you.

Thank you very much. [Operator Instructions] I now invite the next speaker shareholder, Bharatraj Kankanala. Ladies and gentlemen, we will wait for a moment while Mr. Kankanala unmutes his connection.

I'm audible, sir?

Yes, sir.

A very good morning Chairman and Board of Directors [Technical Difficulty]

Sir, your audio is breaking. We can't hear your audio clearly.

Mr. Rajeev, wonderful performance, sir. And taking my NATCO company to the next level. My Chairman is very generous. He's giving in time regular dividends. Thank you very much, sir, the way you're paying the dividend payouts and the way you expansion our company into the next level, sir. Thank you very much, and you are very generous in CSR. You are giving funds for the cancer hospitals and the cancers patients. Thank you very much for your generosity, sir. I thank my secretarial service Chairmanji. In time, my secretary has sent me the annual report and link also. He's always active 365 days, and I thank my CFO, Mr. Appa Rao and his team, Mr. Das, they are always accessible. Thank you very much. Chairman, sir, once again my best wishes to you. Sir, you should live 100 years, sir, because you're taking the NATCO company in the next legacy. Thank you very much for giving this opportunity. Sir, if possible next we'll have a physical AGM, sir. Once again my best wishes to you, all the best, sir. Sir, with me one of my shareholders Reddeppa Gundluru is here. Due to technical reasons, he did not attend. Sir, shall I give it to him? [Foreign Language].

Yes, sir. Please proceed.

Thank you, sir, for giving this opportunity. Sir, Board of Directors, Chairman, statutory auditors, my company secretary. Good morning, [Foreign Language]. This is Reddeppa Gundluru speaking from Hyderabad. As a shareholder, I'm very proud about the company's performance for financial '23 sir. Chairman sir, you have given a very wonderful speech about my company performance for financial '23. We came to know a lot of information about my company progress, future and present also. Sir, I requested for the physical annual report. I received within a couple of days from the company secretarial department. Thank you so much for wonderful services. After issuing the annual report, I found that there is a wonderful previous numbers, wonderful, colorful information in this, sir. Thank you so much for the wonderful progress. And also, I found that there is a wonderful corporate governance maintenance by my company, especially transparency of account, transparency of ethics, good values, morals and also good manner. So overall, I can say there is an integrity there in my company. Thank you so much, sir, for a wonderful and hardworking employees, CFO and leadership, my company's transparent governance. Thank you. Sir, yes, sir, we are growing wonderful financial performance, sir. Thank you so much. The Board has a very good growth mindset. Thank you so much. I don't want to speak much on this financial year. Here, my question is, sir, what is our next year financial vision in a couple of years? What is the new projects, sir? These are only observations. I don't need to ask any financial questions. I don't have -- find any financial questions over here. So, everything I find in the annual report, sir. There is no single transparent company, sir, since inception. And I feel so wonderful leaderships, sir. We believe in the leaderships, sir. Go ahead, sir. Take appropriate decisions about company growth. I have already e-voted on all the resolutions, sir. Thank you so much. The company's secretarial departments are always available, and they are a very good manners, giving the importance to the shareholders, very strong investor relations they are having, sir. [Foreign Language] Thank you, sir. I'm concluding, sir. Sir, wherever required, sir, please encourage women empowerment, women leadership, women employment sir? This is my humble request. Sir, we have a faith on the Board, trust on the Board. Go ahead. Sir, I wish you a good -- Sir, Chairman garu, under your leadership, sir, we'll achieve many more higher awards in coming financial years, sir. And also financial year '23 also. That's the reason I wish you the good health to you, all the Board and all the key players of the company, not only you, sir, all the hard working employees also. Thank you so much for giving this opportunity. Reddeppa, signing off.

Thank you.

Thank you very much. Speaker shareholder #13, Abhishek Jay has reconnected.

Am I audible?

Sir, you're audible, please proceed with your question.

Sir, do you hear me? Sir, am I audible? Sir, my name is Abhishek, shareholder of the company...

So you're not -- your audio is not clear.

Sir, my name is Abhishek, shareholder of the company. My DP ID is 41359155. Sir, first of all, I congratulate the management on the eve of 40th annual general body meeting. I trust all is well with you and your family in this challenging situation. Our company deserves much more respect than the current market cap after completing company more than a decade of successful operations, profitability and becoming one of the strongest brands in their respective sector. Sir, as of date, how many employees do the company have? I would like to know from yourself. And what are the steps being taken by the management to reduce the other expenses, legal professional charges and audit fees? Because myself and my team are running a legal firm in the name [indiscernible] So I would request you to kindly to enroll our company in the empanelment of the company, and we'll be glad to extend our services, sir. I would request the management to kindly consider hybrid AGMs in the future because of the digital challenges in the virtual platform. Most of our senior citizens are not able to join in this virtual AGM because of the digital challenges and so you can consider a hybrid AGM with local shareholders who can join you digitally, other shareholders can join you locally, you can get the valuable points and ideas that will be helpful for the management in our future, so kindly try to consider hybrid AGM. And CSDL and NSDL platforms where we exercise our reward and we get access to the information of documents like registered numbers, telephone numbers...

Sorry to interrupt you, Mr. Abhishek. Mr. Abhishek, this is the operator, sorry to interrupt you.

The members can very well inspect the documents you are submitting and after the conclusion of the AGM and I may not reach out to you at a later stage seeking for all these documents. So, if it is updated online, most of the companies, they are doing it, sir. So, I would request the management to kindly take care of it.

Sir, your audio is not clear to us.

Nothing much to ask, sir. I would request the management to kindly take care of the hospital record of the investor liabilities. Finally, arrange for a plant visit for the investor fraternity, sir. I thank the company secretary and the head of IR team for sending me the email link as well as making this 40th annual general body meeting a grand success. I wish the company and the Board of Directors a great success and prosperity in the coming future. And thank you for giving me the opportunity. I hope to see you in the physical AGM next year. Thank you very much.

Thank you very much. The next speaker shareholder, Keshav Garg has registered, however, did not join the AGM. That was the last speaker shareholder. I now hand over the meeting to the Chairman for further proceedings. Over to you, sir.

Yes. So what I'll do is there are a lot of questions so I'll split among all the directors. So first, I'll request Mr. Prasad to answer the question on the renewable energy and the water, what do you call, waste management program. Mr. Prasad, can you just address that question of the shareholder, please?

Yes, yes. I can say that we have a very extensive program for the renewable energies. We already have a couple -- 2 windmills. And we all -- we have about 6 megawatts solar power, and we are adding some more for other units also. And we are also concentrating on the parabolic dishes where we can have hot water. And we are also exploring for the steam generation. That is for our formulation plant as well as our Chennai plant, where we can utilize -- substitute our furnace oil and diesel oil with the solar energy. So this is on the renewable energy front. And when it comes to the water management, as you rightly asked, we have extensive programs and we already have, we are doing in a couple of units, especially the rooftop water management. We are collecting the very good rainwater directly. We are collecting it into our storage tanks, and we are reusing for our boilers and cooling towers where we don't have to do any further treatment. This is one of the good initiatives that is yielding, and we are extending this to all other units also. And we have a lot of storage facilities we have created. And we are utilizing this rainwater for our cooling towers and for our internal gardening and for other purposes. So this is on the waterfront. We are doing as far as possible to the maximum extent that is possible. Thank you.

So I request our CFO to address Mr. Shantilal Chandra Doshiji's (sic) [ Satishchandra Shantilal Doshiji's ] questions. Give him a moment.

Yes. The market size and life cycle of different FDA products. We have been announcing the launch of products from time to time. The market size would be a very extensive exercise, I will leave it to you. And with regard to pomalidomide, we have already mentioned that this is a case without merit. So we have also not launched this product. The launch of the product will happen sometime in 2027. So with regard to the question on the pipeline for Brazil and the Canadian markets, we have almost launched 7 products in Brazil. We have started the file plan for approvals about 10 products in Canada. So the performance of the Canadian and Brazil subsidiaries, we had a very good performance during the first quarter, almost about INR 50 crores turnover in Brazil and about almost INR 60 crores in Canada. We are doing very well and contributing for the growth of the company. With regard to your question on the affordable prices, our endeavor has been that for quite a long time and we continue to do that. And with regard to the onco products performance last year, about 5% to 10% growth is there in oncology products. And our endeavor -- because this is one of the principal therapeutic divisions of the formulation, we continue to focus on that in the domestic market as well as in the international markets. And with regard to your question on the agrochemical sector whether we will be doing B2B and actually, it's a mix of -- mainly, primarily, our emphasis is B2C. And we are also doing B2B for certain major customers, but predominantly 80% of the business comes from the B2C. And regarding the strategy for our launch of the agrochemical products, it is -- whether it is with the patent challenges or otherwise, it will be a mix of both because we need a basket of products for running the business to be with the distributors and the farmers. So the -- we continue to focus on both the patent challenges as well as the normal regular products. And we also -- with regard to your question on the leveraging the pharmaceutical distribution business to the agrochemicals, these are 2 independent setups. So we cannot mix both of them. And we have a reasonably good setup for the agrochemicals. In a very short time of about 9 months, we have built a good setup and we are stabilizing that. Definitely, wherever there is a scope, we are working for increasing the efficiency of this. With regard to Pee Safe, it is a woman hygiene products, which we have invested, and they're slowly growing, and we are hopeful that this business will go very well. And ISCA is -- actually, it is not an additional investment, it is an investment made almost a couple of years back. Since they are selling this business to some big multinational company, so we have used our -- like there are conditions in the agreements. And additional shares have been issued to us to maintain the value of our company. Yes. And we own about 6% shareholders, which is a minority, but we are confident that the investment will have a value add. With regard to the cash position in the balance sheet, there are plans -- there are no further plans for the buybacks. Definitely, we would pursue certain opportunities for the acquisition when we get them at a very at a very optimum level where we can grow with those acquisitions and should not become a burden to the company.

Dr. Pavan, can you just speak about our portfolio that we are looking -- that we're working on in our R&D and what is our vision for the business? Just a few lines, please.

Thanks. So for R&D, we are focusing on multiple products along the same strategy where there is difficult to develop or difficult to manufacture or have some inherent barrier to entry. With that, we continue to build on that. And mainly, I would say, about 60% to 70-or-greater percent of our portfolio is focused on oncology, trying to leverage our strength in [ India ] as well as the past few products that we've launched in our subs in Brazil and Canada. So we continue to build on that. And we are definitely trying to extend some of the typical products that we have developed for the U.S. or into other markets like Canada and Brazil where we have our own subs. And we've also started recently extending this to some emerging markets. So our -- we work on oral solids as well as injectables. And we've also now increased our footprint into more complex products like peptides and oligonucleotides. And peptides, these are harder-to-develop products because of the -- they are called as combination products with a device, either a reusable pen or an auto injector. So we are continuing to increase the development in the area of complexity as we generally refer to as complex products. So, these have inherently got some barriers to entry. We're increasing the scope as well as the geographical diversity for our products in terms of development.

Thank you, Pavan. Thank you so much. So let me address the question on income growth and women participation. I think we're expecting good growth in the next few years. And I think a lot of the growth is driven by the product cycle launch. And I think we have some good launches that's the reason why we're seeing good growth right now. And women participation, yes, I think we should definitely improve. I think that is something -- it's a very valid criticism. I think we need to work hard. And I think to enhance our participation, I think we'll definitely revise policies which encourage women participation. And I'm hopeful that over the next few years, we'll be able to see the difference and increase in participation. The gentleman asked us, in the last 5 years, our market cap has remained flat and not increased so much. And so I think there, I think the challenge has been our portfolio. I think our portfolio has declined dramatically because there are 2 challenges we have had. One is our domestic portfolio has declined dramatically because hep C has become 0. It used to be about INR 500 crores a year, and then it dropped dramatically. And that's the reason why you've seen a dramatic drop in the domestic sales. Otherwise, other businesses have done well, but it's been a large hole to replace because hep C is a cure and that's the reason why they are unable to recruit new patients. And regarding export, there's been a tremendous amount of price erosion in the U.S., which has affected our core business. But however, I think we have revived with our new launches and with our geographic expansion, we believe that, I think, there'll be more stability in earnings this round compared to what happened in the last few years. It's the [indiscernible], and I think that's how it works. And Mr. Yusuf asked whether he can visit the factory. I think certainly he can. He can work with our Investor Relations and our Company Secretary. Whenever the shareholders are welcome to visit, we can always arrange a visit. I can address bonuses and shares and all. I think we will look into it. Certainly, I think we can certainly consider that. I think we want to enhance shareholder value. As you're aware, we did a significant buyback which has enhanced shareholder value, and we're giving good dividend. And we look at all measures that can enhance shareholder value. The gentleman asked about lenolidomide percentage. I think generally because the earnings are going to be finalized, I don't want to answer that question. I think we'll have better clarity for our September earnings. I think we'll speak during the conference call at that time how we have done in lenolidomide. Regarding agro, agro, I mean, one gentleman asked whether the erratic monsoon affected us? Yes. But luckily for us, we had started from 0. So I think anything above it has been a bonus because it's a beginning for us. Overall, has the industry has struggled because of the erratic monsoon, you are absolutely correct, but fortunately, because we have come from 0, our sale has done extremely well, and the product portfolio that we have had has taken very good market share. And I'm proud to say that we have done extremely well, and we are doing very good campaigns in strong agrarian states like Maharashtra and the Telugu states. I don't know if you ever have a chance to watch Marathi or Telugu channels. We -- our agro products are constantly advertised on the news channels, so that we can bring more coverage and penetration to our products. And so we're doing very well. And I think we have spoken in the past that we expect this division to do INR 150 crores to INR 200 crores, and we are on track and everything looks good. And regarding monetization of the land bank, I think some of it has been monetized over a period of time. I think it has been reflected in the other things from the past. Actual value of land bank and all, I don't have a number off of my head. I think it's a very dynamic situation. We have some assets that we can monetize. And I think we're looking at different opportunities. But as of now, there's no clear plan as such. Regarding the vision for the business, I think the business is going to be very competitive. I think as Pavan said, we need to do complex generics; second, have geographical expansion; and spend on R&D to just expand the portfolio. And I think these 3 things are going to work. Commodity business is extremely difficult today because of the nature of our pharmaceutical sector. I think people -- I -- my personal belief is that commodity products even though they're important, the margin that you will get in this business has become -- has declined dramatically and will continue to decline. And one gentleman asked about the vision for the API business. The API business should do well in my personal view in CMO and domain niche R22 API products, which are oligonucleotides, oligopeptides and then in niche para IV type of areas. Commodity, I still -- I am not that excited. I mean I might differ from the general market view, but I still think doing the niches and the high-technology barrier ones is where the real money is especially in generic stuff. And number of employees, we have a little less than about 5,000 employees in our system. I think we did some -- write some VRS program, which have dropped our employees by about 15% in the last 1 year. I think we are at the right size for our scale of revenue. And in terms of capacity utilization, I think we are around -- it depends on which particular segment. I think API, I think we are doing some expansion, doing -- enhancing capacity in our Chennai and Mekaguda units. And finished dosage relatively, we have good capacity because we have a back of facility in Vizag. So I think we're relatively okay there. But -- and I think we always have a INR 300 crore, INR 400 crore CapEx, which can just upgrade our facilities and enhance where we are -- capacities in areas where we're short. Regarding legal expenses being high, I -- this is part of our game. I think we do a lot of legal litigations to get early entry into the market where we are able to make money. And sometimes depending on the cycle of the litigation, sometimes the bills tend to be higher. You can't -- we can rationalize by strategically spending money on more interesting assets, but that itself won't drop dramatically because it's the nature of the business. And you have to spend legally, otherwise, you can't clear the way to launch. I think I have addressed most of the questions. Again, thank you, everyone. Thank you. Thank you for attending.

Thank you, sir. As the business for this 40th Annual General Meeting is convened and completed, I thank all the shareholders once again for joining the meeting and for their cooperation in conducting today's business. I thank all the stakeholders for their continued support. Thank you very much.