Torrent Pharmaceuticals Limited (500420) Earnings Call Transcript & Summary

Gentlemen, good day, and welcome to the Torrent Pharma Limited Q2 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhir Menon. Thank you, and over to you, sir.

Thank you. Good evening, everyone, and welcome to quarter 2 FY '22 Earnings Call of Torrent Pharma. Quarter 2 was driven by a strong momentum in the branded generic market. In terms of financial performance, during the quarter, the revenues were INR 2,137 crores, up by 6% on Y-o-Y basis. EBITDA was INR 711 crores, up by 11% on Y-o-Y basis. The profit before tax was at INR 472 crores, which was up by 23%. Net profit after taxes were at INR 316 crores, up by 2%. Aman, over to you for taking us through the India business performance.

Thanks, Sudhir. India revenues at INR 1,087 crores grew by 13% on a year-on-year basis. Underlying growth adjusted for a spillover of sales from Q1, Q2 last year on account of dispatch delays is at 16%. Growth was driven by continued strong momentum across all our key therapies. All our new launches in the chronic segment continued to gain market share and leadership positions. Patient footfalls have largely normalized now, and we expect double-digit market growth to continue for the current quarters. As per AIOCD data, Torrent's Q2 growth was 19% versus the IPM growth of 15%. Torrent is among the fastest-growing companies in the CVD, gastro and CNS therapies during the quarter as per the AIOCD data set. The PCPM for the quarter was INR 9.9 lakhs with an MR strength of 3,600. Torrent continues to focus on brand building and specialty approach and has 16 brands in the top 500 of the IPM, with 11 brands with more than INR 100 crores sales. Now over to Mr. Sanjay Gupta for the international business.

Thank you, Aman. Let's start with the Branded Generics piece. So the largest [indiscernible] market outside India is Brazil. Our Q1 sales were resilient INR 109 million. these were up by 20%. The -- sorry, the Q2 sales were aided by strong performance of our key brands, new launches and some price increases. As per IMS, Branded Generic growth market growth for the quarter was 10%, and we continue to maintain a strong launch momentum in the routine, with 2 launches that took place earlier this year and 3 additional molecules, which would be launched before March 31, 2022. Moving on to Germany. Our Germany sales were EUR 29 million, down by 4% on a year-on-year basis. This growth was impacted negatively due to COVID and new supply delays and channel inventory reduction due to wholesaler customer consolidation. As per secondary sales data, Torrent's growth is in line with market growth. In the U.S., our sales were at $35 million were down by 18% on a year-on-year basis and 2% on a Q-on-Q basis. Growth continued to be impacted by the lack of new launches, pending re-inspection of facilities and price erosion on the base portfolio. At the quarter end, there were 53 ANDAs pending approval with the U.S. FDA and 7 tentative approvals have been received. One ANDA was approved during the quarter. To conclude, sequentially, Q2 witnessed steady recovery and normalization across the market. This was complemented by our strong performance in Branded Generic markets led by new brands and new launches. We continue to focus on returning our Germany and U.S. business back to growth. Operator, we can open the call to questions now.

[Operator Instructions] First question is from the line of Prakash from Axis Capital.

My first question is on the gross margins. Since India and Brazil are -- have seen good growth and have a higher share versus last couple of quarters, the gross margin seems to be muted back down versus the last 5 quarters. Could you explain what's happening here? Are we seeing increase in raw material prices? And what is the outlook there?

Absolutely. So, Prakash, in terms of increase in raw material prices, we are yet to see those things coming in because of the shortage of power issue in China. But there's a general increase, which we have been seeing over the last 2 quarters. So, yes, there's some amount of increase, but not very significant, I would say. So that's point number 1. This quarter, what happened, Prakash, is 3 factors. So 1 is, if you remember, last quarter, we said the gross margin is a little -- looking a little lower because, at least as far as India business is concerned, there's a little more concentration on the acute segment to the overall portfolio. What we are seeing is quarter 2, that's still continuing, Prakash. So possibly 1 quarter down the line or maybe in quarter 3, we should see that correcting and the mix changing more favorably towards the economic portfolio, so that's number 2. Number 3, this quarter, there is a higher inventory provisioning, which we've done more for the generic markets, I would say. That impact is roughly 0.5%. So that's something additional, which has logged in this quarter versus quarter 1. And we've seen some amount of higher price erosion in the U.S. business in quarter 2 versus quarter 1. That's impacting the margin by around 0.3%. So all in all, we see an impact of roughly 1%, of which U.S. price erosion is 0.30%. The other 2 factors, which I spoke about, I think going forward, it should get -- it should start reversing.

So net-net, we would be around this level of 72% to 72.5%.

Yes. I think it should be a little higher than this because of 2 factors, right? I mean, inventory provisioning, as I said, is impacting the margin by 0.5% in quarter 2. that should reverse in coming quarters is what I believe. And plus, as I said, the concentration of the portfolio more as far as India is concerned, on the acute side. And that should start getting corrected. Because I think even the acute and sub-chronic segment have started normalizing now. So maybe 2 months, 3 months down the line, we should see that correcting. And the portfolio mix of, again, realigning towards our chronic portfolio. So that should be another 0.2%, 0.3%. That's the correction which I believe should happen in the coming quarters.

Okay. Understood. And secondly, on the cash flow position. So could you help us understand the cash flow from operations. So I'm looking at the number which you have given in your cash flow statement, but if you could just confirm the numbers, please?

So net cash from operating activities half year ended 30th September 2021 is INR 904 crores.

This is cash flow from operations?

Correct. And minus the CapEx INR 127 crores, free cash flow would be roughly INR 770 crores.

And how much is the net debt now with this kind of cash generation? And how much you paid?

So we've repaid around INR 490 crores up till now. And possibly, in H2, I think we should be around the same number, and therefore, net-net, I think we should be -- the net borrowing -- net borrowing should be a roughly -- I think by year-end, Prakash, borrowing INR 2394 plus INR 1944 So around INR 4,200 crores would be gross borrowing, Prakash.

Yes. And the net would be around INR 3600?

Net would be minus INR 700, I would say, yes, around INR 3,500 kind of amount.

Perfect. And last one on the payable side, it seems to have decreased quite a bit. Any particular reason? I mean, while your inventory and this receivables are similar, but your payables have gone down sharply. Any particular reason there?

Yes. So Prakash, so one of the major component in trade payables is the discount claims, which [indiscernible].

Germany?

Germany, yes. So Germany is a tender market, right? So there are insurance discounts which come from insurance companies. So previously, just to come with a lag of 6 to 7 months. There are 2 things which have happened in Germany. So 1 is, Germany, the growth we are seeing [indiscernible] represent quarter 2. So that's point number 1. Because of it, the amount of are payables towards the insurance discount has gone down. The other thing is there's some amount of acceleration we see in terms of the discount claims coming from the insurance companies totaled...

Mr. Menon, sorry to interrupt you, sir. The audio is slightly breaking from your line sir, please check.

Prakash, you can hear me?

Yes. I mean, a little bit the sound quality is bad, but it's okay.

Yes. So what I was saying is the second factor, Prakash, is that previously, we used to get claim from insurance companies with a gap of 6 to 7 months. So there was a floor which was available. But now there's 2 to 3 months of acceleration, which we have seen in terms of a claim. So that has caused a reduction in trade payables.

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

Sudhir, can you break up the India business growth into new products, volume and price please?

Yes. Aman, do you want to take that?

Yes, yes I'll be glad to. Volume growth was 7%, price growth was 8% and new product growth was 4%.

7%, 8% and 4%. Okay. So Aman, previously, we had seen much higher price growth and lower volume growth last year. And this year, the trend seems to be sort of reversed where the volume growth is higher and the price growth is lower. So I can understand the higher volume growth given last year COVID impact must have been there across the portfolio. But I'm failing to comprehend the lower price growth. So can you help us understand that?

Lower price growth, I don't think it's lower than the last few quarters. It remained in this range of 7% to 8%. So this quarter, it's 8% as well.

Okay. Sorry. Sorry, I misheard you. Okay. So 8% is the price growth. Okay fine. Aman, any color on the...

[indiscernible] aside.

Understood. Understood. Yes. And on the Generics Business that we have started, the trade generic business, I know it's early days, but any colors on how the market is turning out to be? And as you're testing water, how easy or difficult is it to build the business out?

I would say, a pretty good start. As you mentioned, it's been is the second quarter, but we have essentially taken some of our Branded Generic brands and shifted them to the [indiscernible] basket and also added new launches here. And the traction is picking up month by month. So probably the next quarter, we can give a much clear picture on what we anticipate this business to look like in the near-term.

Understood. Could you also give us some color on the number of MR? So because you shifted some of these brands from Branded Generics to trade, were you able to reduce the field-force by a little bit? And also what is the organic attrition in the field-force?

No, we have not shifted any MR. MR strength remaining exactly the same at least mid-single digits.

Mid-single digits. And that is for Torrent, right? What is standard, industry-standard right now in your understanding?

More than 10% is usually average, 10% to 15%.

10% to 15%. So that's phenomenally good. Okay. One last question. Sudhir sir, on the CapEx plan, what's our CapEx plan for FY '22 and '23? And where is that directed, majority of it?

It should be basically maintenance CapEx, should be between INR 250 crores to INR 300 crores.

Understood. INR 250 crores to INR 300 crores and all of it maintenance, right?

Yes, most of it. I mean, there would be some expansion, which may start next year -- end of next year, basically for expanding the domestic capacity, but that will be over a period of 3 years. So I would say, both put together, would be roughly INR 250 crores to INR 300 crores in FY '22 and possibly FY '23, we can look at between INR 300 crores to [indiscernible] .

No, I got that. Just 1 last question, sorry. On the increase in raw material prices that you alluded to in the previous comment. Obviously, a lot of this has been driven by China and the supply situation that exists there. Any thoughts on vertical integrating? Or do you think the Chinese raw material price inflation is transitory and it would normalize in a few months or quarters?

No. So from a priority perspective, this year, there is no plan to invest in vertical integration as of now.

And the price inflation, therefore, how do you tackle that?

No, that's what I said, right? I mean, Aditya, it is too early for me to comment on the price increases, which are being stocked in the market, right, at least for our portfolio, we've not seen that kind of a major impact coming in. But yes, I mean, if there is an impact coming in, we believe it won't be on the overall portfolio. Maybe in some products it might come in, and we'll have to tackle it through price increases, right? I mean in those specific products within the regulatory allowed framework.

The next question is from the line of Damayanti Kerai from HSBC.

My first question is regarding your U.S. business. So sir, any update on FDA inspection of our facilities, any time line which you might be hosting at this point of time? And in the U.S. base business, what kind of price erosion you are facing? And where do you see price erosion moving in next, say, few quarters?

So the first question on, in terms of that inspection [indiscernible] started again making inspections in India being part of a few of our peer companies getting infected. And we've established with prior dealers as per what they consider to be important for the U.S. drug supply. And so we expect them to visit us in the coming months, but I cannot give a firm timetable. So -- but it should be -- I mean, hopefully, in the next, let's say, 3 months and any time when we are prepared for it. In terms of price erosion, we are seeing a pretty high level of price erosion in the U.S. again. There is a lot of competitive intensity has heated up. And for a base business, it's again, safe to assume high single-digit or almost double-digit price erosion.

Okay. And any outlook on the pricing or it largely depends on new launches once we get out facility appearances.

I'm sorry, can you repeat the question?

Sir, I was asking, how do you see this price erosion in to set out in the next few quarters? Or do you think it will be mostly normalizing, once we get new approvals coming from the [indiscernible] appearance?

So price erosion is kind of an intrinsic part of the U.S. business on the base business. And generally, it used to be 3% to 5%, and it's currently running at a higher rate. But eventually, it should stabilize at the historical spend level, which is between 3% to 5%. To grow the business, one has to launch new products. And here is why we've been constrained since March of 2019 because we've not got any material approvals. And once the facilities are cleared, we have about 55 ANDAs pending at the FDA, so we would expect them to be approved rapidly. Many of them would still have commercial value on the market and customers would be interested in sourcing them from us. So we are doing that evaluation permanently, and we would be bringing quite a few of these to the market. So that would have a positive impact.

Okay, sir. And have you started supply some Levittown facility?

Levittown will have some sales this quarter, this current quarter.

okay. it will start this quarter, third quarter?

Yes.

Okay. And sir, my final question is on India business. So how do you see impact of this, I'll say, pickup in online pharmacies in broader market in medium- to long-term, especially for companies like Torrent, which is chronic heavy. And what we understand online pharmacy and now are more focused on capturing the chronic part of the market. So any thoughts here, sir?

The same dynamics in the market continue and there is no new impact on the Branded Generic business at all right now. In fact, this could be an opportunity for us to leverage for the trade generation as of retail off-line change and online use.

Okay. So no impact as of now, but anything you foresee for the long-term?

Nothing significant.

The next question is from the line of Anubhav Aggarwal from Credit Suisse. Current participant has placed the call on hold. We'll move on to the next question from the line of Prateek Mandhana from Nomura.

I had a question on the Germany. You had mentioned in the press release that there are some impact due to customer consolidation to replace. So this impact is just on the -- like Torrent, or this is a market-wide phenomenon by when do we expect this to basically normalize?

Sudi, you there?

Hello? Yes, I am here. So what I was mentioning is that Germany had 4 major wholesalers and 2 of them merged in this year. So what they've done is, they're streamlining their inventory and it's a one-time impact, whereby as they consolidate, they bring down the overall level of inventory of the combined group and so that is 1 factor. The second factor is that the wholesale that built up inventory in the COVID days and that's also getting normalized. So both of these should -- the impact should fade away with time.

Okay. Sir, do we expect any pricing pressure in Germany like 4 are now 2 or merge. So will this give them more pricing power?

No. Actually, the wholesalers in Germany do not really impact the pricing. The pricing is more as linked to the companies that bid on tenders. So in general, there are more companies coming to Germany from India and elsewhere. So the prices then build up in the tender process. Wholesalers are more like service providers, and they are the ones that are actually servicing the requirements of the pharmacies, but the demand generation comes because of the tenders. And so I do not expect the consolidation to yield -- to result in any additional pricing pressure.

Okay. And then 1 question on U.S. So in the press release you have mentioned the constant currency sales to be $35 million and in INR 284 crores. So that points to obtain a higher rate of U.S. [indiscernible] about 81.1%. So can you please help me understand like why is it so?

Sudhir, can you take that one please?

No, let me come back to you, please.

Okay. Sure.

And $35 million is the right number.

Okay. So like is the INR number? Does that go in something else as well?

INR 284 crores. I'll have to check. Possibly some mistakes, but I will have to check.

The next question is from the line of Abdulkadar Puranwala from Elara Capital.

Two questions from my end. First, on the India. Last quarter, we spoke about entering into the Trade Generics business. So have you already started that and whether this growth what we have seen in India, is that also been driven because of entering into the Trade Generics segment?

Yes, we have started it. This is the second quarter of launch. So it's a pretty small part of the business, something between 1.5% to 2% overall right now, the Trade Generics business.

Okay. Okay. And next question is on the R&D spending that we are doing. So on a quarter basis, this quarter, we spent close to INR 130 crores on R&D. But when I look at the U.S. filing, not much of the products have been filed. So how is our product filing strategy going to be? Are we going to wait till the every [indiscernible] site, and we'll start all the products that we find or what exactly would be the planning on the product [indiscernible] cost?

So there is no change in the filing strategy. generally, we file more products in Q3 and Q4. So this year, although we expect to file double-digit products in the U.S. So no change there. It's just a timing issue.

The next question is from the line of Shyam Srinivasan from Goldman Sachs.

Just the first one is on the EBITDA margin. We have seen a softness in gross margins, which you explained and maybe you've also given an outlook. But EBITDA margins are done better like Y-o-Y. So just want to understand what are the levers that are there? And if you can help us with some kind of a directional guidance on EBITDA margin?

Shyam, as per the policy, we don't give a future-looking guidance. But quarter 1, what we had said is on the expenses, we said, more or less, it should be around this number. In quarter 2, if you see that's the way it got delivered, right? And what I had also commented last quarter is maybe the expenses will go up to a certain amount. And that's exactly what we are seeing in quarter 2. Other than that, as you said, I've already explained what is that impact on gross margins. So I would leave it to you to assume what's there in H2.

Yes. No, Sudhir, I think only point is these margins are significantly higher than what we saw pre-COVID. So much sustainability. I just want to understand, and we've always talked that costs may not have come back fully. So when do you think the cost will come back fully? Is it Q3, Q4? Or is it only next [indiscernible]?

No. That's what Aman had explained last quarter that most of the pre-COVID costs have come back. So if you look at it from, what you call, last year versus this year's perspective, this year, I think most of the costs have come back. Now the question is, I mean, how does one look at this cost going forward? And in terms of making incremental investment for higher growth or so, that will be something different. But as far as the costs are concerned, I think quarter 1, quarter 2, we've delivered, more or less similar, kind of a cost, right? And I think the field working, doctor meetings and all have come to almost 95% of the pre-COVID level. So that sticks out on the cost.

And so going in Q3, there could be some just a marginal level of increase in further physical activity. That's just go back to almost maybe 100% level of previous, but again, not much higher from that.

Got it. Got it. And my second question, just looking at your MR productivity now almost touching INR 10 lakhs, right? At least in this quarter. How should we look at it? You are now almost in line with some of the top players in [indiscernible], which have a high chronic element like you do. So how should we look at this? Do you think is there any scope required for increasing field force? Or do you think productivity improvement can drive top line growth product for us in India?

In the earlier discussions in quarters have always been that as the portfolio expands, we will need to add the field force accordingly. So when the new launches start coming in, and that's when the additional expansion would be acquired.

Do we foresee which time frame? Is the question -- do you think it's a fiscal '23 event now? Just want to understand that.

Yes. Within the next year, it could be likely.

The next question is from the line of Bharat Celly from Equirus Securities.

Just -- Sudhir, sir, just wanted to understand on Germany market. Given that the Germany overall EBITDA margins are already lower -- on a lower-end and the insurance claims actually accelerating, are we looking at dip in -- perpetual dip in and ROICs for the treatment?

No, no, not really. I mean Germany for me, I think the return on capital employed is superb because of this floor, which is available to me, I have a negative working capital.

Right, sir. So since it is getting accelerated will it impact in the longer period?

I mean, I would say this was something which was expected. I mean, so from a 6 months or 7 months coming down to 5 months, it doesn't change the color too much. So I think, still, I would say, in terms of the returns, Germany still stands out, against the other geographies, I would say.

And do you foresee if you get further acceleration in the coming period? Or do you see it stabilizing?

No, I don't think so. Because I think the whole thing is -- the things started when this happened last year, right? So probably everywhere, there were cash flow pressures, which could have been the case with insurance companies also, right? And which made them accelerate some part of it, right? But -- I mean, that's how the system works. So I don't think there's more acceleration beyond this what's already seen.

Right. And sir, on the Euro market, is there any particular set of products where you are seeing higher price erosion or it is a broad-based price erosion, which are you saying this?

So essentially, since we don't have new launches, we have legacy products, which were launched before 2019. And the high-volume oral solids. So you are seeing a price erosion of oral solids as well as a few derma products that we've launched.

Okay. So it is more broad-based, I say, which is in the market. Hello? Hello?

Yes. Sanjay, you there?

Yes.

Okay. And sir, 1 final one. So we have 1 settled for Revlimid as far as you can see in the code document. So are we going to be among first or second wave of plant? If you could give some outlook on Generic Revlimid?

I'm sorry, I didn't understand the question. Can you just repeat again, please?

So in code documents, it seems that we have settled for lenalidomide, that is Revlimid. So when can we expect the launch? And are we going to be in the first wave or second wave? So if you could give any outlook broad-based or a number over there?

Yes. So we settled the lenalidomide but unfortunately not at the liberty to disclose as to what the terms of the settlement are.

But sir, can you at least tell whether it is going to be second wave or third wave of launch? Anything broadly if you could tell?

No, I think they are driven by confidentiality. We cannot discuss that.

The next question is from the line of Sayantan Maji from Credit Suisse.

My first question is on Brazil. So we had a constant currency growth of 18% during this quarter. So how much is price increase in this what's the component of pricing increase?

So broadly speaking, about half of it comes from volume increase and the other half is equally split between new launches and pricing.

Okay. Okay. And second question is on R&D. So in [indiscernible] have not been cleared for the past 2 years now. So once the plants get cleared, so would we see an increase in the R&D or is it not, say, related to this event?

There is no change in our R&D guidance. So generally, we guide towards 6% to 7% of top line revenue in R&D, and we don't anticipate a change in that.

[Operator Instructions] You rest the next question is from the line of Prateek Mandhana from Nomura.

Sir, on the inventory days. So I see that the inventory days went up during the COVID period, like during the last year. It is still at elevated levels from historical levels. So do we expect it to go back to historical levels? Or do we expect it to remain around these new levels?

No, so that's what we said, right? I mean, it will start getting normalized over 4 quarters. And quarter 1, quarter 2, we've already seen that normalization starting off. And I think that should be visible in the cash flow statement. If you look at inventory, there's normalization, which has already started. So probably over the next 2 quarters, also, the normalization you'll see happening faster, I would say.

[Operator Instructions] The next question is from the line of Amey Chalke from Haitong Securities.

I just have one question to ask. Largely, Torrent has overall solid portfolio, both in the domestic also in the exports market. So is there any plan to expand our manufacturing base towards injectables? And also if you can talk about the biosimilar plants as well if there're any?

Sanjay, you want to take that?

So we are not into the hospital market traditionally in India and around the world. So we currently have set up a plan to do oral oncology drugs. And we don't have any manufacturing infrastructure in injectables. But it's always under evaluation, right? So we keep studing the markets keep trying to see what the opportunities are, what our peer groups are doing. And both injectables and biosimilars are areas of constant study at Torrent. But beyond that, I wouldn't like to say whether we are making any investment plans at this point in these 2 areas. But both of these areas are followed closely by our management.

And just a follow-up question on this. Do you think that not investing in these areas will have any impact on the growth side for us? Or you think we are -- we have good enough portfolio even to support with the oral solid?

So we are a little bit beyond oral solids already. So especially if you focus on the dosage form that we manufacture for the U.S. market. So in addition to oral solids, we have creams, ointments, [indiscernible] liquid, suspensions. Now we have oral oncology drugs. So we diversified our portfolio, and we had also the three 505(b)(2)s in our portfolio. So we are doing a variety of things, and we've made some choices. And one of the choices that we don't do respiratory, we don't do injectables right now for the U.S. market. But those choices are constantly being evaluated. So I'm not saying we will not do injectables because the customer consolidation in the U.S., there's a lot of pressure in the retail side, but there are only 3 or 4 customers, which account for 90%. So by adding a hospital channel, we would be doubling the number of customers because the hospital size has 3 to 4 CPOs, which play an important role in that market. So we are interested in going into the hospital segment because of [indiscernible] and diversify our customer base. But so far, we've not disclosed any products to do that diversification. But it's something which is under constant evaluation.

The next question is from the line of Rishi from HNI Limited.

Can you hear me?

Yes.

Sir, in the last AGM, you have -- the Chairman and CEO has announced that the outlook looks very bullish, and the pipeline is great. But that has not been displayed in this quarter number. So what went wrong in the exports market? And what are the challenges in the local market right now in the post-COVID scenario? If you can explain that in a broader term, that would be great.

Sanjay?

Sudhir, you want me to answer?

Yes.

So essentially, the big tire we face is lack of new approval. So why we have been investing in the portfolio and filing the ANDAs in the U.S. market. So we have not been receiving approvals because of the status of the facilities, right? So that is the number 1 reason for us to hold back in revenue growth linked to new products. So that is -- is that adequate response to your question? Or are you looking for something else?

What is the outlook for the H2? Means, so we don't see any signs of the COVID. And some of the companies who are our smaller peers have done relatively very well in terms of top line growth where we are lacking right now. So what is the outlook, sir, can you tell us the outlook for H2 Basically, some guidelines that you can give?

No because the outlook will depend upon the status of the U.S. FDA inspection and the launch of new products, right? So I have mentioned that the U.S. FDA is currently inspecting other facilities in India, and they've restarted. So we would expect this to happen in the next 3 months. And then if that takes place, then we will be back on the growth track because our new products will get approved.

[Operator Instructions] The next question is from the line of Sayantan Maji from Crédit Suisse.

I have 2 questions. So one is in Germany. So in last quarter earnings call, we had mentioned that we would be growing in high-single-digits. So do we still maintain the guidance given the changed landscape now?

Yes. No, our expectation was that we would be back to the growth track. So unfortunately, this quarter, again, there have been a few setbacks. So we are trying to -- our objective is to grow somewhere between 5% to 10%. And historically, that has been the growth rate in Germany. But at this point, I would not like to give forward-looking guidance. We are doing our best to remedy the situation and to get back on growth. And some of these are one-time items. But I think, at this point, I would say that the objective of the company remains to get back to where it was. And hopefully, it will be there soon. But I don't know. I prefer not to give you guidance for the future.

Okay. Sure. And for the U.S., so we were supposed to launch sartan. So have we done that? And is it now reflecting in the quarter since?

Can you repeat that, please?

So in U.S., we're planning to launch sartan in this -- in 2Q. So have we launched that? And is it now reflecting the U.S. things? Or are we [indiscernible]

So it's about sartan. So we actually relaunched the olmesartan, one of the oldest sartan in the U.S., and it is reflected in the numbers.

Okay. And finally, I just want to check, what's the status of clinical trial of Dapsone? So are we done with the clinical trial because, I think, we got tentative -- we have -- we already have tentative approval on this product?

Correct. So we do have tentative approval, and we are in negotiations with the FDA to get final approval. So we've met all the requirements. And we -- hopefully -- we have a kind of ongoing legal battle in the court. So it's a combination between what happens in the court and what happens with the FDA. So hopefully, we would see some good results on both of those fronts.

As there are no further questions, I would now like to hand the conference over to Mr. Sudhir Menon for closing comments. Thank you, and over to you, sir.

Yes. Thank you, everyone, for joining Torrent quarter 2 earnings call. If you have any further questions, please feel free to get in touch with us. Thank you.

Thank you. Ladies and gentlemen, on behalf of Torrent Pharma Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.