Zydus Lifesciences Limited (ZYDUSLIFE) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Zydus Lifesciences Limited Quarter 3 FY '26 Earnings Call. Please note this call is being recorded. I now hand over the call to Mr. Ganesh Nayak for opening remarks. Thank you, and over to you, sir.

Good morning, ladies and gentlemen. It's my pleasure to welcome you all to our post results teleconference for the third quarter ended December 31, 2025. For today's call, we have with us Dr. Sharvil Patel, Managing Director; Mr. Tushar Shroff, Chief Financial Officer; Mr. Arvind Bothra, Head of the Investor Relations; and Mr. Alok Garg from the Managing Director's office. Let me talk about the key developments during the quarter. I'm happy to inform you that we ended the calendar year with a strong double-digit growth and operating profitability. All our key businesses contributed to the performance during the quarter. Let me take you through the financial performance for the quarter gone by. We registered consolidated revenues of INR 68.6 billion, up 30% on a year-on-year basis. Excluding acquisitions, too, the base sustained double-digit growth with all key businesses delivering ahead of expectations. EBITDA for the quarter stood at INR 18.2 billion, up 31% on a year-on-year basis. Our operating profitability continues to remain strong with an EBITDA margin of 26.5% during the quarter, up 20 basis points on a year-on-year basis. EBITDA margin on for the first 9 months of fiscal stood at 30.3%. Net profit for the quarter adjusted for the exceptional expense on account of the new labor code impact and acquisition-related costs was up INR 11.1 billion, up 9% year-on-year. Now let me take you through the operating highlights for the third quarter of FY '26 for our key business segments. In the pharmaceutical space, North America business, comprising of the United States and Canada, registered revenues of INR 28 billion during the quarter, up 16% year-on-year. The base U.S. business continued to grow, driven by sustained volume expansion and new products launched over the last 12 months. On the U.S. generics front, we filed 18 ANDAs and received 8 approvals and launched 4 new products during the quarter. On the U.S. specialty front, we launched BEIZRAY, albumin-solubilized docetaxel injection, our first oncology 505(b)(2) product, further strengthening our specialty portfolio. On the orphan and rare diseases front, in January 2026, we received final approval from the USFDA for ZYCUBO, copper histidinate, and with this approval, ZYCUBO has become the first and only therapy approved for the treatment of Menkes disease, which is an ultra-rare disease. We now have 3 rare disease products being marketed by Sentynl. In Canada, we filed 5 ANDAs, received 4 approvals and launched 1 new product during the quarter. In India, our branded formulations business sustained its growth trajectory with a robust 14% year-on-year growth, outperforming the market growth for yet another quarter. The growth was driven by persistent traction in innovation products and pillar brands. Chronic segment continued to grow at a faster pace, driving the overall growth of the business. In terms of therapy performance, the business grew faster than the market in key therapies of cardiology, respiratory, dermatology, pain management and in the super specialty areas of oncology and nephrology. On the super specialty front, we continued to retain leadership position in the oncology therapy. Contribution of chronic portfolio has increased consistently over the last several years and stood at 45.3% as per IQVIA MAT December 2025, an improvement of 560 basis points over the last 3 years. During the quarter, we expanded our presence in the diagnostics area through our strategic collaboration with Myriad Genetics of the U.S., introducing 3 advanced tests, namely, MyChoice, MyRisk and Prolaris, and thereby strengthening the country's precision oncology ecosystem. International markets formulations business further accelerated its growth trajectory and posted revenues of INR 7.9 billion, with a strong year-on-year growth of 38%. The growth was strong, broad-based with the demand-driven performance in both emerging markets and Europe, focused by -- supported by focused execution. On a YTD basis as well, the business delivered 38% growth. On our Consumer Wellness business, we recorded revenues of INR 9.6 billion, up 113% year-on-year with full quarter of consolidation of Comfort Click business in this quarter. Excluding the impact of the recently acquired Comfort Click, the business delivered double-digit volume growth during the quarter, reflecting the underlying demand momentum. Comfort Click portfolio that was acquired this year continued to perform in line with expectations. The Comfort Click business deepened its portfolio with the launch of 4 adult gummy variants, 1 probiotic gummy variant for the kids, 1 pure and Pure Himalayan Shilajit Resin, reinforcing its position in high-growth wellness categories. Additionally, the WeightWorld brand advanced its European expansion by entering Poland, Finland and Portugal, strengthening Comfort Click's regional footprint and unlocking access to fast-growing wellness markets. In the medical devices space, the business performed registered revenues of INR 3 billion. This was the first full quarter consolidation of our Amplitude Surgical business. On the operations front, our injectable manufacturing facility located at Jarod received the EIR with voluntary action indicated status from the United USFDA post the inspection conducted in September 2025. Our Oral Solid Dosage formulations facility located in Ahmedabad SEZ II received EIR with no action indicated status post the pre-approval inspection conducted in August 2025. This concludes the business review. I would now request Dr. Sharvil Patel to take you through the key drivers across businesses as well as initiatives in our innovation program. Thank you.

Thank you, Mr. Nayak, and good morning, ladies and gentlemen. I am pleased to report that our core strategic pillars are delivering as intended. Our focus on supply chain resilience and stringent execution has allowed us to navigate market complexities effectively. 2025 was a remarkable year for us characterized by exceptional top line growth and healthy profitability. Our disciplined M&A and business development strategy has complemented existing businesses well and activated new growth engines that are already delivering tangible impact. Building on the seamless integration of LiqMeds and NIPL, which is the Ritebite Max Protein. Our recent acquisition of Amplitude, Comfort Click licensing of biosimilars and our strategic biologic facilities will serve as key enablers of sustained long-term business model to go beyond the bill, prioritizing patient-centric outcomes through sustained R&D investments. This focus is not just about better health care. It's about creating superior value for everyone, who has a stake in our success. In the U.S., our generic foundation is stronger than ever, anchored by a diverse portfolio of internal and partnered products. As we pivot to specialty, we are well positioned to drive further growth. We have identified and engaged key levers to expand our footprint, ensuring we bring highly differentiated, high-impact therapies to the market. This includes the 505(b)(2) pipeline of products developed in-house as well as through partnerships leveraging LiqMeds' portfolio and broadening access to 3 pediatric disease products by Sentynl. In the U.S. biosimilar space, we have obtained a critical milestone with the licensing of 2 large molecules, pembrolizumab and ranibizumab. We shall leverage the recently acquired biologics manufacturing facility in the U.S. to accelerate our proprietary pipeline while maximizing capacity utilization through a continued supply of BOT/BAL for Agenus and the onboarding of new partners. Looking ahead, we are particularly optimistic about the upcoming NDA filing for our molecules Saroglitazar in the U.S. market. This is a pivotal milestone that will not only catalyze our position as an innovation-driven leader in the specialty pharmaceutical space. Turning to our India formulations business, our branded portfolio has consistently outperformed the market for now several quarters. We are accelerating this momentum by sharpening our focus on our core therapeutic areas. Our commitment to patient-centric innovation has yielded a robust pipeline of novel differentiated products that not only address significant unmet needs, but also serve as a foundation for sustained long-term value creation. On International Markets Formulations business, spanning both emerging markets in Europe, it has delivered strong double-digit growth over the past several quarters. In emerging markets, we are driving growth through a therapy-led approach, tailoring offerings to local needs and building a more agile market responsive portfolio, whereas in Europe, our priorities to broaden our portfolio offerings and strengthen our market coverage. Our strategy for Consumer Wellness is centered on making wellness and natural extension of the consumer's journey. The acquisition of Comfort Click has uniquely positioned us with strong presence in both India and Europe's developed market, enhancing diversification and growth potential. With the addition of Comfort Click, we have reached a critical inflection point. This move not only expands our global footprint, but also secures a leadership position in the rapidly evolving digital capabilities, we are building a sustainable, scalable wellness platform framework designed to deliver superior long-term returns. On the MedTech front, we received an important milestone with the CE Mark approval for our proprietary and the robotic surgical system. This confirms its compliance with the European standards for safety, performance and quality. With this, let me share some material developments on our innovation efforts during the quarter. On the NCE front, as I mentioned, we plan to file saroglitazar magnesium with the USFDA for PBC indication. In the biotech R&D space, we received regulatory approval in India to initiate Phase III clinical trials of our second biosimilar ADC. On the vaccines front, we initiated a Phase II trial for bivalent typhoid conjugate vaccine in India. And on our global vaccine strategy is now playing out as recently, we have been awarded the tender to supply rabbies vaccine to PAHO for Latin American countries and the typhoid conjugate vaccine to UNICEF for low and middle income countries. On the 505(b)(2) Front, we have entered in an exclusive licensing and commercialization agreement for novel sterile 505(b)(2) product in the area of supportive oncology care. And the NDA for the product is expected to be filed with the USFDA in 2026. This will allow us -- just to have a second launch in [ 4Q ] and now we can start with the Q&A session. Over to the coordinator for the Q&A.

[Operator Instructions] The first question is from Neha Manpuria.

My first question is on the Agenus deal. Now that we've completed the acquisition of the asset, sir, you mentioned in your opening remarks that initially, there will be a supplier BOT/BAL before we start onboarding customers. In true sense, when should we start assuming revenue from the CDMO business? Would it be FY '27, the latter half, FY '28? Or could it take some more time? And let's say, over a 3-, 4-year period, how big can the CDMO business be for us under Agenus?

Yes. Thank you, Neha. So I think we will see the commercialization start from the second half of FY '27 when we start supplying BOT/BAL. In the meantime, we are obviously getting the facilities qualified. And we'll go with the portfolio development. So -- but I would say the commercialization will be second half of FY '27. In terms of scaling up of the CDMO business, it will take at least 2 to 3 years. Obviously, one milestone will be the -- how -- what BOT/BAL moves forward in its clinical and regulatory journey, and we are quite optimistic with the traction it is seeing in Europe and also the trial, how they're moving. And then obviously, further addition of new CDMO business. So in the next 2 to 3 years, we would say we would have a meaningful bio CDMO business.

Are we quantifying, sir, what this meaningful would be? I mean, would it be, let's say, INR 50 million or INR 70 million, INR 100 million? I mean, what can be the number that we could look at from this facility?

No, it will be a little higher than that.

All right. Okay. My second question is on the cost. Now obviously, we saw the full consolidation of Comfort Click and Amplitude in this quarter, we'll probably have the CDMO cost coming through and then we have saro next year. So if I were to look at FY '27, what should be a good cost estimate that we should look at? I mean from the current, if I were to strip out the R&D number, I think we are close to about INR 1,600 crores, INR 1,650 crores. So roughly, what would be this number on a run rate basis in '27? And when should we start seeing these saro commercialization cost, the MR, et cetera, that cost?

Neha, this is Tushar. Our -- yes, so our current run rate in terms of other expenses, excluding R&D expenditure for this particular quarter, and what we expect is about INR 1,750 crores to INR 1,800 crores, excluding R&D spend. But the Agenus expenses will be -- we are expecting that to be about around INR 20 million on other expenses. So we'll have to see that in terms of on an annualized business if it is about INR 20 million, how the phasing is going to happen. But our current run rate is expected to be about INR 1,750 crores to INR 1,800 crores, excluding R&D OpEx.

And this includes the INR 20 million from Agenus and the saro costs that we will incur, right?

No. This does not include that.

The INR 1,700 crores to INR 1,800 crores is excluding the Agenus and saro costs?

Yes. Saro, any kind of launch specific expenses is not included in this.

And when would we start seeing that given that we will file the product now probably by earliest -- if we expect launch in FY '27. Should we -- fiscal '27, should we start assuming some costs coming through in '27 or it will largely be a '25 -- '28 sort of cost where we see for saro.

No. '27, we'll see a meaningful cost on saro.

Okay. And we are not quantifying that at the moment?

FY '27. No, I think it's -- as I said, it will slowly ramp up because we have -- it depends on once on filing and how we are going ahead with the hiring and other strategic initiatives. So it's too early to give a guidance, but it will be meaningful, but it will be building up as we move through the year.

I think Neha, the idea is that once we are able to close on the budget and other things, probably Q4 will be the better time for us to give you the better guidance.

The next question is from Saion Mukherjee.

Sir, the R&D costs has gone up significantly this quarter. Can you just explain and your comment mentions around maybe INR 100 crore plus increase in other expense in quarters ahead. What is going to drive this further increase? Is it R&D or something else, which will drive that number?

So thanks, Saion. So R&D, we are -- as I said, we expect a 7.5% to 8% of our revenue for FY '26. That's what we guided for. There is always lumpiness to R&D in the third quarter, which is October, December that happened, actually, a significant amount of them. And also then the different clinical trials that are going on for biologics and others. So it's generally that lumpy, but -- and you've seen that in the last year same quarter as well. And -- but yes, we are guiding towards the 7.5% to 8% for this financial year.

Okay. Okay. My second question is regarding international market where we have seen significant growth in the recent past. If you can give some color what happened over the last 4, 5 years, the business has almost tripled. And how should we think about it going forward?

So I would say, I said, there are 2, 3 things that is, one is the key focus on the markets and doubling down on the branded space in the EM space with CVS. I mean, CNS being the most important part, and then we also expanded to some other metabolic disorders, including pain. So that's helping us and so while there have been up and down that have happened in different markets. But overall, I think markets have done very well in terms of growth. The second is expanding our access to more markets with the quality of filings that we have and the products that we have, we are many times semi exclusive or exclusive because of the technology. We are seeing a good traction to execute new markets in terms of launch. And Europe which was going through a challenge for us in the last 3 years -- in the last year and this year have done meaningfully better and they are significantly scaling up their business with both reach as well as the product portfolio growing and that's also helped with the overall business in terms of growth. And I would say also that all the new markets that we entered like U.K. and some of the markets in EM, all of them have significantly tracked better than expectations, both on revenue and margin. So that has led to the overall growth. So I would say a lot of it led by good portfolio, which is there, which we are accessing for these markets and then a very strong execution in the market.

And so you see this as sustainable, like at least double-digit growth to continue in the coming 2, 3 years?

Yes, we see meaningfully 20-plus percent growth continuing for the near future.

Okay. And sir, just one last question on the U.S. If you can comment on REVLIMID, whether it was large, low this quarter and also in mirabegron, there are some news of settlement by Lupin. So how should we think about the landscape on mirabegron, which is a big contributor for you currently in the U.S.?

So yes, on REVLIMID as I said, every quarter, the trajectory is on a downward trend. And even in this quarter gone by, it's a very small part of the overall business now. And we won't see anything in the next quarter. So we have sort of completed our business sort of so to say, for FY '26 on lenalidomide. And so by and large, this quarter is gone and next quarter, we'll not see anything. . With relate to mirabegron, the trial started as of Monday on 9th Feb with jury selection. The party started presenting there -- they will start presenting the case on Tuesday, which is Feb 10th and the court has directed the parties for mediation while the trial is proceeding. So that's where we are today.

Sir, any comments on possible competitive landscape here over the next year or so?

No. I mean it's difficult to say. Obviously, there has been a Lupin has settled from what we hear today morning. So there is some write-up there. But I would say, I would still refrain from saying anything until after the trial or after the mediation.

The next question is from Bino.

Sharvil bhai, just to follow up on the previous question. What is the outcome of the trial? Or let me put it this way. Is there any sort of outcome of the trial by which this opportunity of mirabegron can stay exclusive to current players in the market for next 3 to 4 years?

As I said, it will be better, the trial is just about to start, it will be better to not comment on that outcome right now.

Got it. On this KEYTRUDA partnership that you have got into, are you expecting this to be the first biosimilar market to KEYTRUDA?

So in terms of the product that we have licensed, you would -- I think from public domain, it is also known that this company has the -- is the furthest ahead in terms of both the clinical trial and the revised clinical trial guidelines. Actually, they shape that guide almost -- way of in terms of how this will move forward. So they are furthest ahead in terms of the clinical development and FDA guidance that the firm has received. So there is -- we are also hoping that we do get to file as the first biosimilar and potentially also find a meaningful opportunity for launch being the first filer.

Understood. And again, from public sources, it seems that KEYTRUDA key patents are expiring in 2028, 2029, without any explicit guidance, is that roughly the time line around which we could target the launch?

Yes, we would be prepared in the kind of time lines that IPD and others are saying and even the commentary that we have heard from various sources. So we would want to be prepared for that time line.

Understood. And one last question on Jardiance, empagliflozin. I believe we are one of the first to file. Do we have any chance of -- is it going to be any materially meaningful product for us even if it is a couple of years out?

So I would say overall, we do have been good -- had a good success in terms of first to file and also settlement. So we are quite -- we do see a lot of good pipeline of products coming through, including empa. But also importantly, even in the year gone by, we have filed almost 4 to 5 against sole exclusive first to file. So has probably been one of the best years for Zydus in terms of sole first-to-file opportunities that we have seen. So we are quite excited with the prospect of our future pipeline that we'll get to launch.

Sorry, I didn't understand, is empa going to be a sole opportunity for you? Or will it be shared?

No, no. Empa is not a sole, but as I said, beyond that also, we have filed at least 4 sole first-to-file this year.

The next question is from Nitin Agarwal. Nitin, can you hear us? We'll move on -- Nitin, can you hear us?

Yes, I can hear you. So I was saying that with the -- in the U.S. with REVLIMID not being there from the next quarter onwards as you guided, and some of our major first-to-files also kick in the second half of the year, how should we think about the U.S. business growth for the interim next 3 to 4 quarters?

So we have guided that we will still see growth in the U.S. in the coming year. In fact, even in FY '26 in the -- at least the calendar year, we have said 11% volume growth for our U.S. business, while the market has grown at 1% -- we have grown at 11-plus percent on the volumes, so which is also helping. So both the base business is robust, really growing. We still continue to launch meaningfully a lot of products in the U.S. and will continue in this year also. And then as I said, as the year comes nearer to the end, we'll have some exclusive launch also. So we will see a good growth continue in the U.S. generics business.

The next question is from Surya Patra .

I will just extend my question on the U.S. growth side. Sir, what are the key triggers that you are witnessing as the growth driver for the, let's say, next 1 or 2 years? And when we talk about the specialty opportunities, we have already this rare disease products also that is there in the U.S. market already. So considering all that, how big the specialty contribution would be to the U.S.? And how significant it can ramp it up or do you think? And what other trigger that you find for the U.S. growth for the next 2 years?

So in the next medium term in the next 2 years, obviously, we have very important launches, 4 to 5 sizable launches that we'll get to see and some where we are sole exclusive in the market. Beyond that, obviously, we have plans to launch 40 to 45 plus products in FY '27. And we'll continue to have a large growth trajectory going forward as well. And then the whole 505(b)(2) franchise of liquids as well as the supportive onco product like BEIZRAY. As I said, we filed -- we hope to file one more soon with a partner and also potentially launch it in a year's time. So all of that will lead to adding further value on that. And we just licensed ranibizumab also biosimilar. So we also see that in the second half of the year launch of that. So overall, I would say the specialty/505(b)(2) pipeline will grow very well with biosimilars entering also. Beyond that, obviously, Sentynl has just launched ZYCUBO and we'll see a good year for Sentynl in the coming years. So that part of the specialty business will also meaningfully track. And as I said, our generics business continues to do well. We had 11% volume growth in spite of what the market is, and that likely will continue.

Okay. So your price erosion is single digit, that is how one should consider when you say 11% volume growth?

Yes. I mean other than lenalidomide and others, we would see a single digit. Sorry, can you repeat that?

So when you say 11% kind of volume growth, price erosion should be single digit. That is what one should believe?

Yes.

My second question is on the margin scenario going ahead. A couple of factors that is likely to play out. See, obviously, the lenalidomide factor and secondly, the R&D -- higher R&D spend that we are likely to see and the blended margin implication of the 2 larger acquisitions, what we have recently seen, Amplitude as well as the Comfort Click. I think that is on a blended basis, margin is lower than the current margin scenario or our reported margin, our base business margin, excluding REVLIMID, that is the kind of margin, what the acquisitions would be having. So given that there is a kind of a visible pressure on the margin on the subsequent quarters, that is it looks like. Any sense or any commentary on that?

So I think for -- obviously, we have had an exceptionally high margin, much significantly higher than even any industry margin that has existed in FY '26. We -- if you look at -- going forward, loss on lenalidomide that we will see. In quarter 4, which you will probably see very little growth or no sale also on lenalidomide, we would still -- we still expect a 23% plus margin. And so I think while we -- yes, you're right, CCL will have lower margins. Overall, consumer business next quarter, which is a bigger quarter will have lower margins and Amplitude has a little. I mean it's near to it, but similar margin. We will still track at 23% plus margin in the quarter 4.

Okay. Sir, just one clarification, sir. This Amplitude what is the like-for-like growth that we would have seen in this quarter? Whether the metric revenue what we have reported, it is purely Amplitude or something else also that is included there?

It's that plus some cardiovascular sales as well.

Okay. And what would be the like-to-like growth in the Amplitude, sir?

So it's high single-digit growth for the like-to-like business.

The next follow-up question is from Bino again.

Just following up on the product, Palbociclib, which we have in-licensed. Is it as of today, FY '27 opportunity or an FY '28 opportunity?

The first part I missed the -- when you said licensed.

Yes, Palbociclib, which we have in-licensed, I believe there was some patent pediatric extension, which was awaited. So as of now, would it be an FY '27 opportunity or FY '28 opportunity?

So that we can't answer because if the pediatrics extension is granted, then it will be FY '28. Otherwise, it could be FY '27.

Okay. And Riociguat continues to be FY '27 opportunity, right?

Yes.

Got it. And one last question on this product, Enzalutamide Xtandi. Is that a material product for us, whenever it comes?

I'll ask Arvind to come back to you on that specific product because over -- on top of my -- directly, I can't answer that because I don't have recollection.

The next follow-up question is from Saion Mukherjee. .

Just a couple of questions on India. I think the growth that you're reporting, would it be fair to assume that a fair bit of it is being contributed by your saroglitazar, desidustat and your biosimilar portfolio, and in that context, like how should we think about these products growing? Because I think this year has been a good step up, particularly for desidustat. Where do you see these brands, the peak sales potential, particularly for saro and desidustat? And are there any patent risk that we need to be worried about on these products over the next 3, 4 years?

On the patent risk, no, we have a longer patent life. In terms of traction, yes, our innovative portfolio is growing much faster. It's growing at 23-plus percent, but also our growth booster brand, which are those 30-odd brands that we focus on are also growing at greater than 13%. So I would say overall, the portfolio is tracking very well. And as this product scale up, like saro, desi, also our biologics business also, we'll see a better trajectory on that. We are -- saro is already overall INR 450-plus crores franchise as a molecule. And we see the very strong -- very significant strong growth continuing for the franchise. So we are quite bullish on saro. Also desi similarly, we only see stronger traction going forward. And so I think from that point of view, yes, the patented molecules are doing very well. The biologics are also doing extremely well. And as I said, even beyond that, our growth booster brands, which are beyond these are also tracking significantly better than market. And [indiscernible] vaccines and other business also, which is separate, yes.

Okay. Okay. So just on, you mentioned about some tender wins on vaccine. So how large are this potential? And when should we pencil in these revenues in our model?

So this year, we have definitely grown very well. And next year, we also have a very significant growth expectation on vaccine. In the India public tender market, we had won last year, FY '26, the MR tender, which is INR 100-plus crores already opportunity that we have realized on a single product. Our also very strong traction on our flu vaccine, which is also gaining meaningfully and we hope to become the largest flu player in India very soon. And the rabies vaccines have done extremely well in the Indian market also with prequalification. I think as we get to the global tenders, obviously, there are -- we are starting off on some of them. So the initial starts are small. But as we get into the second year, third year, the supplies go up. So we -- as I said, I see a very strong value out of vaccines. In the next 3 to 4 years, we want to have a INR 1,000 crore plus business on vaccines for sure. And that's what we are conservatively aiming for.

The next question is from Bansi Desai.

Sharvil bhai, my question to you is on our M&A strategy. So you had earlier outlined that your -- you would want to scale up U.S. specialty through inorganic opportunities. And therefore, if you could provide an update on the progress of this strategy and the nature of assets that you are prioritizing in terms of therapy areas or commercial stage of these assets?

So in the U.S., as I said, yes, we are looking to how do we diversify and have more specialty-driven business. So it's a meaningful -- I mean, I think the couple of meaningful things that have happened for us, obviously, the launch of ZYCUBO, which is our third specialty drug or a rare disease drug that has happened. We do see traction to being able to find more of these opportunities in the next year or 2. We hope to at least get 1 or 2 deals almost every year. So that's one BD&L opportunity and licensing we'll scale up, and we have done well so far, and we track -- continuing to track well in terms of getting more leads. Beyond that, obviously, we are building the 505(b)(2) specialty space with supportive onco as the key area that we are focusing on, and we want to push for that further. I think the biosimilar launches will also aid to that. Ranibizumab will also be a type of specialty launch in the U.S. market. So we are excited with that opportunity also as we move forward. So overall, yes, the specialty business will continue to grow. And then finally, for our saroglitazar part of the portfolio once we come near to launch, we are hoping to find more assets to add to saro, both -- mostly commercial assets. And we continue to track and see what we can look for and -- but it will be in the liver, hepato, gastro space adjacency or at least any niche adjacencies in major diseases. So it will be mostly a specialty-driven portfolio acquisition if we are able to do.

And any plans to augment this via assets, which have commercial infrastructure or capabilities around that?

Yes. That is also a way we are looking at it.

All right. And my second question is on India, given our innovative brands are doing well, our chronic mix is going up, we will also see potentially GLP-1 launches. So fair to assume that our India business should track that double-digit growth for the next 2, 3 years based on the portfolio that we have today.

Yes, I think we have a strong momentum for our innovative brands. Also, we will have sema launch as well as many other interesting first day-1 launches in the market, also future more proprietary new drugs to come. So we are quite bullish on double-digit growth for India.

The next question is from [ Devang Saraogi ].

We secured shareholder approval for INR 5,000 crore QIP back in December, given that 2 months have already passed, could you clarify if the fundraising is strictly contingent on any acquisition or we are waiting for better market conditions to minimize dilution?

It is mostly contingent on if we get to see any major opportunity. I said our internal accruals -- I mean -- and cash flows is sufficient for us to continue to do what we need to do without fundraise. Fundraise is an enabling provision for us to use if we feel that we need to provided we can see any meaningful acquisition.

And secondly, if any -- if you can provide any clarity for mirabegron litigation. What should we assess the maximum risk limit for the product?

As we speak, we are in litigation. So I don't think we'll be able to make any comments for now.

The next question is a follow-up from Surya Patra.

Just wanted to understand how important this Myriad Genetics collaboration for us? And what is the opportunity that we are trying to target here?

We had earlier already licensed one opportunity in the liquid biopsy space with Guardant and that's tracking extremely well in India. And the liquid biopsy business for Guardant with Zydus is exclusively managing, it's doing extremely well. This will significantly add to that capability on creating more opportunity and access for patients to test for genetic disorders as well as -- not generic but genetics conditions with related to cancer and others. So this, I think, our view in the next 2 to 3 years, this would be a very meaningful business, sticky business for the company. It's already tracking very well with just CanAssist and the liquid biopsy business, and this would significantly add further opportunity for the company. Beyond that, obviously, we create a very strong patient angle to how we manage the whole ecosystem or for cancer for both the oncologists as well as the cancer patient in terms of giving them additional opportunities for them to test and early diagnose. So I think all of that will lead to us continuing to be the largest Indian oncology player as we intend to be, but also not only be the largest but also create more value for the patient.

Second one, just a clarification further again on the GLP-1. I believe we had mentioned earlier that we may not be there in the first wave of commercialization in India or emerging market because our product could be slightly differentiated product than the pure plain vanilla generic of the semaglutide. So if you can clarify, sir, because you have got the approval from the CDSO about your generic version. So what strategy that you are likely to play here? And what is your manufacturing arrangements or partnership arrangement for GLP-1?

So I think, Surya, there may have been some misunderstanding. We will be in the first wave of launches when it comes to India launch. We will also be partnering with at least 2 or 3 companies who will use Zydus' sema to launch. So we are definitely in the first wave. We already have marketing authorizations and all of that. So that is happening in terms of -- and that will be with our novel formulation. In terms of other markets, we -- as I said, we are saying we are not in the first wave when it comes to other markets. But in -- probably in the next 12 months, we will enter those markets also. But in India, definitely, we will be on day 1 post...

What is the novelty that we are talking about here?

So we have a new formulation where we -- it's a very significant ease to the patient in terms of use. Also, there is a very meaningful benefit in terms of cost because today, we have in -- typically, you -- for weight loss, you have to shift from the first 4 weeks to the next 4 weeks with a different dose, and that means a different pen device. For us, we have time and we don't need to make any changes from the initial dosing to the higher closing with the same device, it continues. So it'll definitely add significant ease of use for the patient, much less complexity for patients to learn 2 devices. Also, the supply chain wise it becomes much easier because you're not carrying 2 different devices for early first 4 weeks and then the future. So all of that is going to lead to very meaningful, I would say, patient burden being lower in terms of understanding and use and carrying and also in terms of supply chain, also convenience of dosing.

Okay. Okay. Just last one point, sir. On the finance cost side, we are having the cash balance as well as the debt. So that's why the interest cost is seeing a kind of a sequential rise. So generally, what is the kind of a thoughts process here going when we think about FY '27 and beyond?

So our net debt basis, we have INR 3,000 crores of debt as of now. And I would say that's because of, obviously, the large acquisitions that we have done recently, but I think we are more than comfortable in terms of our net debt position.

The next question is from Gaurav Tinani.

Sir, first question is on the biosimilar strategy. So firstly, on ranibizumab, I just want to understand the landscape right now. I believe Sandoz was also selling or was in a partnership with Formycon for ranibizumab, but then they kind of withdrew from the market. Now we've also got into an alliance with Formycon. So do we see the commercial landscape still attractive? And do we see this as Sandoz, when can they reenter the market? And when can Zydus enter the market here, please?

So as I said, we hope to enter in -- by the -- in the second half of the year, that's where we are planning for launch. There is definitely an opportunity where there is not enough biosimilars available on ranibizumab in the market, and we see that as an opportunity.

Sandoz had almost a 48% share and they still withdrew from the market. Now any read-through from there? Why did they withdraw from the market? And now we've also taken Formycon's product. So why did Sandoz withdraw the market and how...

No, I don't have -- I mean, it may be a regulatory reason, may be a commercial reason, I don't know.

Okay. Secondly, for biosimilar KEYTRUDA, what should -- the next clinical milestone in terms of the Phase I study completing, when can we expect the readout for that? Or do you see that in H1 of this calendar year, H1 or CY 2026?

Yes, we will see it in this year -- I mean this calendar year.

This calendar year. Okay. Got it. And the -- if the study is successful, in the press release, we've also mentioned that we can use Agenus' facility or manufacturing in the future. Now the initial filing on successful study, will that include Agenus site or that will include an alternate site initially for Formycon and Agenus site will be included subsequently. Any readout on that, please?

No, currently, we -- Formycon manufactures it in a European facility, and we are going to file as a primary filing through that. Subsequently, we will evaluate as a second source filing whether we need to -- we will use our U.S. facility. But currently, the BLA application will be submitted through the Europeans.

Got it. Last question. I think we've guided for 23% plus margins in Q4 of this year. With next year, U.S. growing, emerging markets growing 20% plus, India also growing in double digits. Any guidance for EBITDA margins for next year?

I think we -- as I said, the best is for us to give you the next quarter guidance. And I think as we start the next financial year, we will probably come out with better -- more near-term guidance. But right now, I would say the nearest guidance is we'll be in the fourth quarter despite no revenue on lenalidomide, we will see 23% plus margin.

[Operator Instructions] As There are no further questions -- we'll take a follow-up question from Gaurav Tinani.

Yes. Sorry. One last question. So as we're building in a slight ramp-up in other expenses ex R&D, which we guided earlier in this call. What would be the key levers for this higher OpEx spend? Would there be a field force dedicated for GLP, would there be a field force for biosimilars driving this? Or would there be marketing spend in Comfort Click or additional field force in Amplitude driving this? Any read-through for that, please?

None of those, it's the acquisitions that have led to obviously some of the higher base being created. But there is no addition of field forces in the current acquisition or the current businesses. Future saro will have a commercial team, which is not baked in yet.

So the biosimilars field force for rani, would be the same, which we use for the 505(b)(2) products?

Yes. And it's largely in the same number of people we have. We'll reorganize a little bit.

Yes, sir. We can have a closing remarks and then close the call.

Yes. Thank you. I think as I think the organizer said there are no further questions. Thank you, everyone, and we look forward to seeing you in the next quarter.

Ladies and gentlemen, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines and exit the webinar. Thank you.

Thank you.