Sun Pharmaceutical Industries Limited ($SUNPHARMA)

Ladies and gentlemen, good day, and welcome to the Sun Pharma's Q4 FY '26 Financial Results Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Dr. Abhishek Sharma, Vice President and Head of Investor Relations and Strategic Projects. Thank you, and over to you, sir.

Thank you. Good evening, and a warm welcome to our fourth quarter and full year FY '26 Earnings Call. I'm Abhishek from the Sun Pharma Investor Relations team. We hope you received the Q4 financials, the press release and the earnings presentation that was sent out earlier in the day. These are also available on our website. We have with us today Mr. Dilip Shanghvi, Chairman; Mr. Kirti Ganorkar, Managing Director; Mr. Alok Shangvi, Chief Operating Officer; Ms. Jayashree Satagopan, CFO; and Mr. Richard Ascroft, CEO, North America; Today, the team will provide an update on financial performance and business highlights for the quarter, pipeline update and respond to any questions that you may have. . We'll refer to the consolidated financials for management comments. The call recording and transcript will also be put on our website shortly. As you know, Sun has formally announced the acquisition of Organon company. disclosures regarding the acquisition, including strategic rationale, time lines and pro forma headline financials have already been cared to our exchange filings and discussed during the recent investor call. Since Organon remains a public listed company. Today, we will not be taking any questions regarding Organon's business performance. including recent quarterly results. The discussion today might include certain forward-looking statements, and these must be viewed in conjunction with the risk at our business basis. You are requested to ask 2 questions in the initial round. I also request all of you to kindly send in your questions that may remain unanswered today. I will now hand over the call to our CFO, Ms. Jayashree Satagopan.

Good evening, all, and welcome, and thank you for joining us for the earnings call after the announcement of financial results for the fourth quarter and full year FY '26. The financials are already with you. As usual, we will look at the key consolidated financials. During the fourth quarter of FY '26, sales were at INR 1.45,598 million, registering a growth of 13.6% vis-a-vis Q4 FY '25. Gross margin was at 80.8% for the quarter, higher than the same period last year largely on account of better product mix. EBITDA for the quarter was INR 39,542 million, an increase of 6.4% over Q4 last year. EBITDA margin came at 27.1%, lower both on year-on-year, which was 28.7% and on a quarter-on-quarter, which was 31.9%. ForEx gain for the quarter was INR 4,268 million ex ForEx, EBITDA margins were lower quarter-on-quarter due to several factors, including lower milestone income some seasonality, reduced contribution from lenoledomide in Q4 versus Q3 and higher spend in certain geographies, including U.S. Some of these spends were elevated for the quarter and we should see it normalizing in the subsequent quarters. Reported net profit after tax for Q4 FY '26 was INR 27,140 million, while adjusted net profit for the quarter was INR 27,507 million. Earnings per share for the quarter was INR 11.31 per share. Effective tax rate for the quarter stood at 22.3% vis-a-vis 19.8% in Q4 of FY '25 and 24.3% in Q3 of FY '26. Balance sheet continues to be strong with a net cash of $3.2 billion at the consolidated level. Now we will discuss the full year FY '26 performance. For the full year FY '26, sales were [ INR 582 million ] a growth of -- sorry, a growth of 11.9%. Gross margin was at 80.2% for the full year FY '26. EBITDA came in at INR 1,734 million. growth of 16.1%, with a resulting EBITDA margin of 30.3%. Adjusted net profit for the full year was INR 1,24,015 million. The board approved a final dividend of INR 5 per share for the year FY '26. This is in addition to the interim dividend of INR 11 per share, taking the total dividend for the year to INR 16 per share. This is the same as prior year FY '25. I will now hand it over to Kirti, who will share the performance of our Global Innovative Medicines business and the India business.

Thank you, Jayashree. I shall first provide you an update on global innovative medicine. In Q4 FY '26, our Innovative Medicines sales were USD 354 million. Global Innovative Medicine sales for the full year FY '26 were USD 1,420 million with a growth of 16.8%. This business accounted for 22.2% of the share of Sun sales for the quarter. The performance of this business unit continues to be driven by growth across U.S. and ex U.S. market as well as Ilumya and other products such as Odomzo, Cequa and Winlevi. Global Ilumya sales for FY '26 were USD 796 million, having growth of 16.7% for the year. This does not include in-market sales of our alliance partners. During the quarter, U.S. FDA accepted the review of BLA of Ilumya for the treatment of adults with active psoriatic arthritis with regulatory action date set for late October '26. Now coming to India, the sales of India formulations were INR 4,359 million for the quarter, recording a growth of 14.8%. India formulation sales for the full year were INR 1,92,904 million, recording a growth of 14%. India sales accounted for 33.2% of total consolidated sales for the quarter. During Q4, we launched semaglutide injection and under the brand name Noveltreat and [indiscernible] in India across all the strengths. Sun Pharma is ranked #1 and holds 8.4% market share in over INR 2,450 billion Indian pharmaceutical market as per PharmaTrack at March '26. Corresponding market share for the previous period was 8.1%. I am pleased to note that this year, we have seen the highest gain in market share for Sun since Ranbaxy acquisition. For the quarter ending March '26, we grew higher than IPM, and we had done well across all major represented therapy areas. The sales growth continues to be led by higher contribution from volumes, new products and production as compared to overall market where the price increases is the key growth factor. Our volume growth of 6% for the quarter beat IPM volume growth, which came at 1.6%. As for SMSRC, November, February '26 report, we continue to be the #1 company based on the prescription volumes. Sun Pharma is also ran #1 by prescription with 11 different doctor categories. For Q4 FY '26, the company launched 11 new products in India. Now I will hand over Rick for the update on the U.S. market.

Thank you, Kirti. Let me share the performance highlights for our U.S. business. Overall, the U.S. business reported sales of USD 459 million for the quarter, declining by 1.1%. The U.S. sales for the full year fiscal 2026 were USD 1.9 billion, recording a marginal decline. For both the quarter and the full year, growth in innovative medicines was offset by lower sales in the generic business due to additional competition in certain products. U.S. accounted for 28.8% of consolidated sales for the quarter. As you know, we launched EnLOXIT in the U.S. during the fourth quarter, and we also launched 2 new generic products in the U.S. I'm also pleased to now for the year that innovative medicines rose $1.1 billion for the first time in the United States. Having had a strong trajectory since the launch of Ilumya and contributed to by products, including Illuma, Adamson, Winlevi. Innovative Medicines is now the larger of the businesses in the U.S. when compared to generics. I will now hand over the call to Alok for updates on our other businesses.

Thank you, Rick. I will provide an update on the performance highlights of our other businesses. Our formulation revenues in emerging markets were USD 306 million, up by 17.4% over Q4 last year. Emerging markets accounted for 19.2% of total consolidated revenue for Q4. The underlying growth in constant currency terms was 6.5%. For the full year -- for the full financial year FY '26, formulation revenues in emerging markets were USD 1.265 billion, up by 13.6%, with a constant currency growth of 8.2%. While branded generics has continued to grow, innovative medicines has been an important new driver for growth in emerging markets, for the year, with Ilumya doing well across several markets such as Romania, Brazil and as well as the partner market of China. Formulation revenues in Rest of the World for the quarter were USD 220 million, up 10%. For the full year FY '26, ROW sales were USD 969 million, up 14.4%. Innovative Medicines led by Ilumya and Odomzo have been the key drivers for growth in ROW including sales in non-alliance markets. Rest of the world market accounted for approximately 13.8% of consolidated revenue. I will now hand over to Mr. Dilip Shanghvi for updates on R&D. .

Thank you, Aalok. Let me now take you through our R&D initiatives. We continue to invest in building an R&D pipeline for both the global generics and the Innovative Medicines business. Consolidated investments towards R&D for quarter 4 FY '26 stands at INR 9,757 million or 6.7% of sales. Innovative R&D accounted for 36.9% of our total R&D spend. On the guidance, we expect high single-digit consolidated top line growth for FY '27 based on our current understanding of the regulatory and macro environment. We expect our FY '27 R&D spend to be 6% to 7% of the sales for the next year. Further to our announcement of Organon acquisition, we have set up an integration management office and have initiated activities for day 1 preparedness. The regulatory filings in various markets is in progress. We expect the acquisition to be completed in Q4 FY '27. That's the end of our prepared remarks. Operator, if you can ask for Q&A.

[Operator Instructions] Our first question comes from the line of Kunal Dhamesha with Macquarie.

First question for Richard. If you could share some initial print on unlock launch, how has been the answer the product and whether it's the product making it smart on efficacy, safety side? And a related question on that, within the competitive landscape, do you expect one of the competitors to kind of vacate the Part B channel eventually given their new dosage form? That's the first question.

Good questions. Thank you. Yes, the receptivity has been very positive. I think you may recall from the last call, we talked about the unique attributes of Loxo. And what makes the product unique is that it really provides balance of efficacy and tolerability. And this patient population tends to be more frail and more prone to adverse events. And if you look at the mechanism of action of Aloxi, it preserves PD-L2 functioning and that pathway is thought to be the pathway that leads to mean-mediated adverse events. So that's what we're hearing back from physicians. Not only are they seeing the efficacy that they expected but they also are not seeing immune-mediated adverse events, which we believe is unique about the product. So physicians have been positive. We've been actively working with integrated health systems where a lot of these patients are to make sure that the product is available on their formularies and we have made sure they're providing adequate training, so their nurses know how to administer the product and patients have the best possible experience. As to your other question, you would be better off asking our competitors their strategies as it relates to Part B and Part D reimbursement.

Sure. Second one for Kirti sir, on the semaglutide launch in India. I think the data agencies, which is primarily take the secondary sales data where our market share at this point in time, I'm not in the top 3 where we are in anti-diabetes, we are in top 3, but in terms of prescription share, how is that market planning for us? And where do you see will be in that market, let's say, from 1 year down the line perspective?

I think we launched noveltrade on first March. So I would say what reflection you are seeing both in or even the prescription may not be adequate because any new product will be launch. It takes time for a complete reflection. So maybe in the next 5, 6 months, you will see the reflection, which is close to reality. Being said that, the product has been received very well by the doctor's community. And 1 of the differentiating point is our auto-injector as well as the pain system, which was appreciated by the doctors and patient equally with -- so current reflection what you are saying is right. We are what you are saying. We are not #1 player in the GLP-1 generics. But as I said, the reflection and the reality, it takes some time to reflect and our endeavor is always to remain leader in the market.

And sir, any clarity on will we be there in the overall semaglutide market anytime soon?

Sure, sure. So for overall, we have completed the clinical study. And once we get approval, we will launch the product at the earliest. .

Our next question is from the line of Surya Patra with PhillipCapital.

My first question is on the sequential drop in the margin. Ma'am, in the opening remarks that you mentioned about a couple of cost element. Am I audible, mean sorry?

Yes, yes.

Yes. So sequential drop in the margin. That was my question. So -- and how much of this drop is because of, let's say, REVLIMID driven and hence, can continue going ahead?

So the impact of regimed in this is relatively small.

Okay. And any one-off cost component that is sitting in the other expenses? And can you quantify that which may not be recurring?

No, there are multiple small items that have together come up to this level. That is why I was also mentioning you should see some amount of normalization as we go forward.

Okay. Okay. Second question is about, although we are not discussing Organon acquisition-related aspects, and I'm not asking anything about that. But in what way, I think both are equal-sized businesses. So if you can give some sense that in what way the base business of Sun Pharma can be complemented for example, like the cross-selling opportunity, that would be a kind of a common thing. But apart from that, what other factors or what other complementing aspects that we can see for Sun Pharma's base business because of that integration?

Sure. So I think we have done a presentation on organ on where in the detail has discussed about how the business complement each other -- but I think there are 4 parts of business where biosimilar is the new addition and the established brand, which is not growing, but which is the 50% of Organon complements with the branded generic business, what we have and women's sales is an innovative business, which will also add to our innovative business and our innovative business contribution, both combined together goes to 26% to 27%. . So in my opinion, it's a complementary because we don't have even product overlap, very negligible product overlap is there. And biosimilar is a new addition. So what gets added is a women's sale on an innovative site to our existing innovative products in dermatology, ophthalmology and some part in oncology. So in my opinion, it's quite complementary business, and we are confident that both companies, when we close the transaction together, it will help us to grow further.

Sure, sir. Just last 1 question, if I may ask. So we have obviously seen a kind of a good progress in Ilumya outside of the U.S., and that is what we have seen the trend also for the global sales business. So -- can you provide some incremental outlook for the global sales business or global innovative business outside of U.S. And what -- which other products possibly can see commercial launches outside of the U.S. from the innovative basket?

Yes. We have Ilumya and Odomzo, these are 2 products outside the U.S. So if you remember, a couple of quarters back, I said like Ilumya, we launched in 35 countries. Now it has gone to 40 countries, and it is helping us to grow. At the same time, even the other non-Ilumya portfolio is also continuing to grow, and we see that they are adding to the overall growth of the market ex U.S. So overall, I would say the innovative medicine part of the business, either you look at U.S. or ex U.S., it is helping us to grow further.

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

A quick question on the U.S. Specialty business. Would it be fair to assume that the growth that you are seeing in specialty in the U.S. so far or let's say, in FY '26 is largely driven by Ilumya. And my second part to the question is, as we think about '27, '28, do you think that the Illumina growth, given the base sort of slows and you see a much larger growth from newer launches, particularly like Selviana and Unloxcyt?

Yes. Thank you for the question. So for '26, we did see good growth for Ilumya, but we really saw good growth across our Innovative Medicines portfolio. So it really wasn't singled out just to 1 brand. And certainly, if we look at this current fiscal year end and the 1 we're coming into, we expect to see continued growth from aluminum. We still see good growth of the IL-23 market, as KirThank you mentioned earlier, we also have submitted for a new extension in psoriatic arthritis. But yes, we also expect to see growth from the Solana and Unloxcyt as well as the existing Innovative Medicines portfolio. .

So out of the existing portfolio, excluding Like, let's say, win levy particularly, we changed our strategy there. The prescription data seems to be showing a very good traction. How much more room do you think that has with this change in strategy? Or this is just the beginning, and we think there could be a much steeper improvement in Winlevi as we go through the next 2 years?

We continue to see growth based on the model that we've adopted, and we also continue to see good growth of SQ product that you didn't mention, where we think that will continue for the next years as well. .

Okay. And last on Leqselvi, how are you thinking about -- I mean, based on your conversation with formulary partners, is it is market poms becoming a little more easier -- how do you think we should think about this product ramp up of this product, given what we are seeing on the competitive landscape with 1 of our competitors sort of slowing down on promotion, a likely new competitor coming in?

Yes. I think there are a couple of things in that question. First of all, we have continued to improve our access position. So as of April 1, we have a majority of access now in the U.S. market. We've continued to expand our testing regimens. So that is another plus. And then I think you're probably referring to a new competitor that may launch I think, look, anytime there's competition, it's a good thing for patients to have choices. We know that they're still -- even with the best products, there are still patients that don't respond. By having another competitor, we do believe that will help grow the market and that, that will not only create opportunities for patients, but it will create opportunities for us as well. .

Understood. That's very helpful. One other question, if I may. If I look at the emerging market business, Obviously, there's currency tailwind there. But do you think sema could be a big driver for emerging market growth for Sun Pharma in '27, '28. We haven't talked about too much information there, but just qualitatively, do you think that could be a big driver either this year or next year?

Yes. So I think we will certainly look at maximizing the potential, but we will not be able to provide any guidance.

[Operator Instructions] Our next question comes from the line of Girish Bakhru with OrbiMed.

Just some for mentioning on biosimilar Talara impact, I know it is in a different channel, but discounts are very heavy, almost going to 90% and there have been significant formulary exclusion of branded STELARA, -- has that changed anything for you? For ILUMYA in terms of formulary positioning and general commentary on the market share that biosimilar might be taking?

We are seeing some impact of biosimilars changing formulary access, but we've not seen an impact on our business. Keep in mind that Medicare is one of the primary channels through Part B that Ilumya is reimbursefied, and that has no effect on the Part B reimbursement program.

But there is no cross referencing of pricing, let's say, does it not change gross to net for you in case the cheaper option is available in the other channels would part be not negotiate on that front?

It does not. Part B drugs are not negotiated under that regimen.

Understood. And second one on Unloxcyt. I know it's still early, but can you share how many how many accounts have you got onboarded given this is an IV product, understanding is positioning will be very different from how excel will be marketed.

Thank you for the question. And you're right. The key focus for Unloxcyt is continuing to work with the not just infusion centers, but the academic centers as well as the integrated health delivery systems. We're not providing guidance on specifically what number of accounts have or have been to sign contracts. But we are seeing good uptake, particularly with cancer centers, and they are -- we are seeing repeat purchases from those centers as well.

Just ballpark, would you be able to tell how many key priority accounts are there? I mean and how many would you target? Because your last call, you mentioned you will only look for new patients. So is it something that you would only with a limited distribution or would you actually compare it with other peers, how they are doing?

No, it's not -- we don't have a limited distribution model because this product is largely used in institutions, some in the community. So we have wide access available to any academic or any institution for that matter that wants to use the product. No restrictions. .

Our next question comes from the line of Abdulkader Puranwala with ICICI Securities.

So my first question is with regards to your specialty products under development. and specifically to M2. So where we are now planning for a partnership. So exactly, if you could highlight which markets are we looking for this partnership? And in terms of in terms of the front end, what is the kind of field force, which would be required for this particular truck with the partner or in select markets like U.S. and Europe?

No, I think we have stated this for U.S. market, we are looking for a partner for developing MM2 further.

Okay. And so would it be fair to assume that the same would happen for the type 2 diabetes drug as well once you complete the Phase II?

Yes. I think the idea is that in larger markets where we will require a large field force to promote, we would look for a partner. In some of the emerging markets and in other geographies, we would look at marketing the product, our sales.

The next question is from the line of Tushar Manudhane with Motilal Oswal Financial Services. .

Dilip, would like to ask you on this generic business, while there will be great franchisee that has built on the innovative medicine portfolio and the R&D scope has been pretty strong. But some are generics business sort of has sort of struggled to grow. Just would like to understand what has been the major reason for this? Is it the compliance because the R&D has been pretty strong, and that could have also led to a generic pipeline while allocating whatever money for the innovative addition. So if you could just highlight what's happening in the generics business?

No, I think part of the question you answered yourself, because of the compliance issue, we haven't been getting approval. And as all of you are aware, generic business is business where pricing pressure will mean existing product will lose top line every year. So I think as we start getting new approval hopefully we will start seeing some improvement. But I think the sales that you see as a growth in emerging markets, also in India as well as rest of the world, also are developed by the same R&D team. So we are seeing decent return on investment in terms of the R&D spend.

Sir, is there any thinking in terms of while maybe the existing sites compliance issue and we're probably taking some more time or longer time. So we sort of build new facility with the, let's say, the latest equipment so that the compliance issues are behind and hence, we have a renewed look at the Generics business. .

So I think like we've shared in the past, I think we continue to work on training and upgrading the existing manpower and ensuring that we're at a minimum meeting or exceeding the requirements from a CGMP perspective. And I think the greenfield facility is to address what we foresee as the future requirement to continue to be able to support the business across the world. .

So are we in the process of selling a greenfield for U.S. generic specific is what I was saying as.

U.S. generic would be a part of the volume that would be manufactured, but it would not be the stand-alone trigger for the greenfield facility.

Tushar we are referring to the Madhya Pradesh plant that is coming up.

Yes. I mean just conceptually, so I'm just trying to contour that while the compliance issue has sort of impacted our business for a certain long period of time, -- but I just wanted to understand if the generic outlook promising enough that we can look for a newer facility so that we have compliance in place and hence, the growth prospects remains strong? Or are we sort of questioning the ensindustry prospects? .

No, we are not challenging -- I mean changing our view on attractiveness of generic business.

And the new facility is not only for compliance, I think it's also to ensure that we have new supply capacity as our volume continues to expand year after year. And as like what Aalok indicated, I think it's a facility being set up for supplying to major global geographies.

Sure. Just 1 more, if I may, so this facility, sorry for my ignorance. So this will have what kind of proceeds in terms of oral falling indictable?

Yes. This is a sterile only facility. .

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

One for Dilip. On the R&D front, we have guided for 6% to 7% as a percentage of revenue. So in terms of the broader split between the innovation and the generic spending, should we assume it in line with the historical track record of 40-60?

So I think you must have seen that both the last quarter overall R&D spend has grown over the rest of the year and also the oral percentage of money spent on innovative R&D has also gone up. So my expectation is that this will continue to be the -- I can't specifically give you a response as to whether it will be 40-60, 45 what you call 55, or may be different. But as more and more products get into our development pipeline, the innovative R&D spend will go up.

So let me put it this way, like the percentage spend or the money spent on innovation divided by innovation revenue, that proportion for the last couple of years has gone down. So is that a strategic emphasis that we want to reinvest from a certain broad range or percentage of revenue from the innovation business into innovation, especially in our existing molecule? Or is it more of a function of whatever trial comes in or there is a broader strategic answer is that at least x percentage you want to lose?

No, I think we have an active life cycle management approach for all our innovative products. And sometimes the investment versus return, looking at the residual IP rights on the product. make it difficult for us to commit large sums because we would have relatively low residual IP period. So I think the idea for us is to accelerate our capability to identify and initiate the life cycle management programs faster.

Sure. And one for Jayashree madam. On the intangible asset increase, I think, is it related to the commercialization of the 2 molecules and hence a tiles or how to think about that? Or is there some milestone payment which we are capitalized?

You're right. This is relating to the commercialization of these 2 molecules.

So let's say work in progress intangible has been classified as the intangible asset. Is it the correct way to understand? .

For Leqselvi, yes. For Check Point, It was never under.

The next question is from the line of Vishal Manchanda with Systematics Group. .

In FY '27, I think we don't have a large specialty launch. So is it fair to expect that the operating cost growth will moderate in the current year and we should see operating leverage kicking in? .

I think the -- it's important to sustain launches as well. So you should expect that we will continue to be investing in Lexelviand unlost going forward. It will become part of our base spend. And that's already been factored into our time.

Any time lines with respect to how should we see these launches happening in Europe and other markets, Unloxcyt and Leqselvi?

I think we are not factoring any sales out of this product in any geographies other than the U.S. this year. If there is, we will ride both for filing as well as approval.

So is it -- these markets are not large enough? Or will we need to do additional trials here and we are probably thinking about it?

No, I think sometimes you have to -- the filing itself requires a certain time because you have to recognize that these are products that we license from somebody. So if the -- and they only wanted to find the product in the U.S. So it requires adopting the existing data to recalibrate for different geographies. So it takes a certain amount of time. So we are not taking a view that it's the other geographies are not attractive -- because if you see competing products, they do quite well in other geographies also.

Understood. And just on the generic business, do we expect any reinspections maybe at Baska or along this year?

So I think the sites operate from a 24/7 audit readiness. I think we would not be able to predict as to when the FDA would audit our sites.

Okay. Okay. And I have 1 more question on Winlevi, the innovator company has done a trial on androgenic alopecia and they have got positive data. Does -- would Sun have any right of first refusal here?

Since this is a pipeline question. We won't be able to answer it.

The next question is from the line of Shashank Krishnakumar from Emkay Global. .

I just wanted to check on Leqselvi I think 1 of our competitors is likely to get an approval in Europe for a sense. I just wanted to check where we are in terms of targeting that patient group. If I'm not wrong, I think they're still in for adults, I just wanted to check. And a related question is on Levulan. I think there again, I think 1 of our competitors have filed for the DCC indication. Are there any plans to sort of also try and target that indication with Levulan?

Yes. We do have an active Phase III trial underway for Leqselvi in adolescence, you're correct. And yes, along with the rest of the portfolio, we let you on, we're actively looking at a number of different potential LCM opportunities.

Got it. That's helpful. And just 1 clarification. I think in your opening remarks, you mentioned that this quarter the higher spending in the U.S., which should sort of normalize. So was this largely launch-related spend In the U.S?

Let me clarify the higher spend was on account of several factors in various geographies, including the U.S. So it is not only in the U.S. .

The next question is from the line of Saion Mukherjee with Nomura.

I think last year, my guidance for [ $100 ] million spend on new product launches, initial promotional spend. So have you spend that amount? Was it more or less? Can you just -- how much was the spend last year. And how should we think about that going forward?

Yes. I think it was around that amount. We're not providing exactly what it is, but it was within that range. And you should anticipate that, that just becomes part of our base spend in support of these brands versus a one-off spend. In order to stay competitive, to continue to invest in sales force and marketing, medical affairs activities, patient support activities. In fact, some of those grow as you have more patients.

Right. My second question is related to tariffs. I think in April, after Section 230, the investigation, there was an announcement on tariffs on branded innovation drugs. So have you seen an assessment of whether it impacts me in any way, if you would like to quantify or give some color around it?

Yes, the pressed announced in April the resolution of the 232 investigation. -- laid out a time line for when those tariffs would apply. I think there are 2 days, 1 in July and 1 in September. As you would expect, we're looking at all of the available alternatives, and we'll look to mitigate accordingly.

Do you expect any negative impact because of that? .

Marginal impact.

[Operator Instructions] Our next question is from the line of Damayanti Kerai with HSBC.

My question is regarding your EBITDA margin trajectory. So you mentioned you will continue to invest in the new launches of Leqselvi in the site in the U.S., et cetera, and you have given R&D guidance. So moving from the fourth quarter base, how should we assume EBITDA margins to move ahead in H2?

So as you know, we do not guide on the margins. However, the expenses relating to Unloxcyt and Leqselvi has been factored in the plan for the year.

So that will be on the Leqselvi .

Just to clarify, Damayanti, we are not guiding whether they will be lower, same or higher versus last year. So that's what we are trying to say that -- last year, we provided an explicit guidance. This year, we are not providing an explicit guidance.

Sure. And can you indicate your effective tax rate for next year and beyond?

Yes. We expect the effective tax rate to be in the range of 25%. .

Ladies and gentlemen, we have no further questions. I would now like to hand the conference over to the management for closing comments.

Thank you, ladies and gentlemen. If you have any questions that have remained unanswered, today, you can reach out to the investor relations A very good evening and a happy weekend to all of you. Thank you. .

On behalf of Sun Pharma, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.