Hello, friends. Welcome to our Q2 earnings call. Joining me here are Nilesh, our Managing Director, Ramesh, our CFO, and Ravi, our Head of Investor Relations. We are pleased to share performance for the second quarter, the progress we are making on our strategic priorities, and our outlook for the remainder of the fiscal year. We delivered another quarter of steady performance, supported by sustained momentum across most of our major geographies. Our organic revenue growth remained in double digits, driven by strong performance in India and other developed markets. Importantly, this growth reflects the increasing strength and diversification of our business, with multiple markets contributing meaningfully to our overall performance. We expect this momentum to continue into the second half of the year, with organic growth of around 20% ex-U.S.
On profitability, we delivered EBITDA margins of around 25% during the quarter, despite increased investments in R&D and a challenging geopolitical and operating environment. We remain committed to our fiscal year 2027 margin guidance of around 24%-25%, while recognizing that margins are likely to moderate in the coming quarters. This reflects intensifying competition in some of our key U.S. products, increased investment in our R&D pipeline, and higher input costs arising from the challenging macroeconomic environment in the Middle East. Now I'll turn to individual business segments. Our U.S. business continued to navigate an evolving competitive environment during the quarter. As anticipated, competition in tolvaptan intensified with the entry of two additional generic players. While our base portfolio benefited from higher volumes and contributions from seasonal products, these gains were offset by pricing pressures in certain products, particularly tolvaptan.
We expect competitive intensity in tolvaptan to increase further, with the possibility of additional entrants over the coming quarters. For fiscal year 2027, we continue to expect U.S. revenues in the range of $1.1 billion-$1.2 billion. Growth in our base business, our new injectable launches, and contributions from pegfilgrastim are expected to help offset the impact on increasing competition in key products. More importantly, our mid-to-long-term plan for the U.S. remains on track. Our priority is to double the share of complex products in our U.S. portfolio, with respiratory products, complex injectables, and biosimilars serving as key growth drivers. We are on track to file more than 15 products during the current fiscal. Over the next three years, we expect to launch more than 60 products in the U.S., including approximately 25 injectable and respiratory products, five biosimilars, and two to three 505(b)(2) products.
This pipeline represents an important step in reshaping our U.S. business towards higher complexity products, creating a more sustainable growth platform over time. Turning to India, our business delivered 14.7% year-on-year growth this quarter, with the core prescription business growing 13.8%, aided by volume growth of 6%. For the first half, our prescription business grew 14.4% compared to 14.3% growth in IPM. Our chronic segment grew 19.5%, ahead of IPM's 17.2% growth. Chronic therapies now account for around 66% of our portfolio, up from 65% in fiscal year 2026, and we aim to increase this share to 70% over the next five years. Most of our key therapy areas outpaced their respective markets. In the first half, our anti-diabetes and cardiac segments grew at 1.5x and 1.1x their respective category growth rates.
Our diabetes segment was a particular highlight, delivering 25%+ year-over-year growth this quarter, our third consecutive quarter of 20%+ growth. This performance was led by our market leadership in human insulin and the successful launch of semaglutide injection. The IPM market growth reached a six-quarter high of 14.7% in Q2. We are very well- positioned to capitalize on this momentum and remain confident that our India formulations business will grow at 1.2x- 1.3x the IPM growth rate, supported by a prescription sales force of nearly 11,400 people and a pipeline of more than 80 new product launches over the coming years. Looking further ahead, our target is for novel proprietary products to contribute 1/3 of our India revenues within the next 10 years.
We will build this portfolio through in-house development and in-licensing, drawing on our partnership track record and our brand building, development, regulatory, and clinical capabilities. We were very pleased to get approved for the first green propellant MDI in India this past week. Our other developed markets, Europe, Canada, and Australia, delivered 46% year-on-year sales growth this quarter and accounted for 15% of our revenues compared with 11% in fiscal year 2026 and 14% in Q1 fiscal year 2027. Within this, our European business sustained strong momentum with 45% year-over-year growth. During the quarter, we entered into an exclusive licensing partnership with Tenpoint Therapeutics to commercialize YUVEZZI in Europe. This once-daily dual-agent eye drop for presbyopia advances our ophthalmology portfolio and builds on our strategy to expand specialty care through innovative therapies that meet unmet patient needs.
Europe remains an under-indexed market for us, with a clear pathway for growth across complex generics, biosimilars, and specialty. We are very pleased with the strong foundation we are building in Europe on the ophthalmology front through the recent acquisition of VISUfarma and the addition of YUVEZZI in the near future. Turning to R&D. R&D remains central to our growth strategy, with investment at 7.9% of sales this quarter, focused on complex and specialty platforms. The tentative approval of our novel apixaban oral suspension through the 505(b)(2) pathway during the quarter underscores the strength of our R&D capabilities. Our pipeline includes more than 55 injectables and respiratory products under active development. We are also preparing to file four to five biosimilars for the U.S. market over the next few years.
We have built a strong 505(b)(2) pipeline, with product launches expected to begin this fiscal year and a potential launch of apixaban oral suspension in fiscal year 2028. For India, we continue to strengthen our innovation portfolio through in-house development and in-licensing of late-stage assets. Quality and compliance remain fundamental to our business. At Pithampur Unit 2, we have submitted our responses and remain on track with our remediation efforts. We are very pleased with the outcomes of the inspections we have had this calendar year across our network. We are fully committed to upholding the highest standards of compliance across our sites globally. In closing, we remain on track to achieve our fiscal year 2027 revenue growth and profitability goals as we navigate an increasingly competitive operating environment.
We are investing on multiple fronts, including building scale to capture the growth opportunities in India, enhancing our specialty capabilities in Europe, and tapping the growing biosimilar opportunities in the U.S. This, coupled with our strong pipeline, provides a firm foundation for sustainable growth and a more resilient business going forward. With this, I will hand it over to Ramesh for a detailed analysis of our financials.
Thank you, Vinita. Friends, I welcome you all to our Q2 FY 2027 earnings call. As you may have seen from the results, this has been a steady quarter for the company, with results within the overall guidance we shared in our last interaction in August. Whilst revenue from operations has grown at a healthy 11% year-on-year, the overall margins have been impacted by the additional competition we have witnessed in some of our key products in the U.S. Diving into the numbers, total revenues from operations, including other income for Q2 FY 2027, came in at INR 7,827 crore as compared to INR 7,048 crore in Q2 FY 2026 last year, a growth of 11% year-on-year. Amongst the key markets, the U.S. grew by 9.3% year-on-year, India grew 14.7%, other developed markets grew around 46% year-on-year, and API grew about 20% year-on-year. Emerging markets declined by 4% year-on-year.
As Vinita mentioned, our organic growth was in double digits, highlighting the resilience of our diversified business model. Speaking about the U.S. business, this quarter, the U.S. business recorded $317 million, a decline of 13.4% quarter-on-quarter on constant currency basis. The quarter-on-quarter decline is largely due to the increased competition and loss of exclusivity on some of our key products like mirabegron and tolvaptan, partially offset by seasonal demand and volume growth in some select products. Whilst we continue to benefit from our differentiated strategy on focusing on complex products, as indicated in our earlier interaction, we see the U.S. business significantly impacted in the short- term from the increased competitive intensity of some of these key products.
This will be offset by the commercial launch of our biosimilars portfolio in the U.S. this year and from the anticipated launch of apixaban oral suspension, of which we received tentative approval this quarter. I would like to mention that we have a rich pipeline, including complex injectables, respiratory products, exclusive first-to-files, biosimilars, and 505(b)(2)s, which should all go well for the long-term growth of our U.S. business. Turning to India, the region business grew by 14.7% year-on-year during the quarter. Within this, our core prescription business grew by 13.8% year-on-year and 14.4% year-on-year during the quarter and H1 respectively. Key segments like diabetes, cardiology, and dermatology handsomely outperformed their category growth at 1.5x, 1.1x, and 1.5x respectively during the first six months, whilst volume growth has been a healthy 6.1% during the same period.
The chronic segment grew by 19.5% in H1 vis-à-vis IPM growth of 17.2%, and the chronic share in the mix has increased to 66% in H1 FY 2027 from around 65% in FY 2026. The share of in-licensed product is around 6%, similar to FY 2026 levels. We launched 12 products in H1 FY 2027 and plan to launch about 20 products in FY 2027, vis-à-vis 15 products which we had launched in FY 2026. We remain confident that our India formulations business will continue to outperform IPM by 1.2x- 1.3x, supported by strong sales force of more than 11,000 people and a pipeline of more than 80 new product launches over the coming years, including innovation in-house and in-licensed products. Other developed markets are concerned. Revenues in our other developed markets were INR 1,182 crore, representing a growth of 46% year-on-year. This is led by strong sales in Australia, Canada, and Europe.
We are focusing on various strategic initiatives to grow our business in this segment, especially in Europe going ahead. Other emerging markets, we grew by 4% year-on-year in this quarter, with lower sales in Brazil offsetting double-digit growth in markets like South Africa, Philippines, and Mexico. Turning to the P&L, other operating income at INR 42 crore, as against INR 216 crore in Q2 FY 2026. This decrease of 81% is primarily due to the lower export benefits from the PLI scheme during the quarter. Turning to the gross margins. Gross margins came in at 74.2% as compared to 73.3% last year and 74.6% in Q1. Whilst margins have sequentially benefited from increased volumes, cost initiatives, and higher profitability in India, we have also seen downsides from increased competitive intensity on some key products in the U.S. and elevated geopolitical risks in the Middle East.
Employee benefit expenses at INR 1,424 crore, increased around 29% year-on-year from INR 1,106 crore in Q2 FY 2026, translating to 18.3% of sales as compared to 16.2% in Q2 last year. This change is largely attributable to higher costs due to regular annual increments and business growth during the year. Q2 FY 2027 manufacturing and other expenses came in at INR 2,438 crore, increasing around 23% year-on-year from INR 1,980 crore in Q2 FY 2026, translating to 31.3% of sales vis-à-vis 29% last year. The expenses were mainly higher due to higher volumes in the normal course of the business, higher SG&A expenses on account of field expansion, and license fee payments as part of our settlement agreements. R&D at INR 618 crore is 7.9% of sales as compared to INR 522 crore in Q2 last year. On a H1 basis, R&D was INR 1,226 crore, representing 7.7% of sales.
For the full year, as indicated, we expect R&D to be around 8%. EBITDA excluding forex and other income was INR 1,957 crore vis-à-vis INR 2,138 crore in the same period last year, with a margin of 25.1% vis-à-vis 31.3% last year in the same period. For the full year, as indicated in our earlier interaction, we expect EBITDA margins to be around 24%-25%. ETR. Turning to the tax rate, ETR in H1 was 28.5%. For the full year, we expect ETR to be around 27%-28%. Going on to the balance sheet, operating working capital stands at INR 7,542 crore as of 30th September, against INR 7,132 crore as of 31st March. This translates to 87 days of working capital against 90 days in the previous quarter.
Net cash stood at INR 3,349 crore as against INR 4,636 crore as of March 31st, largely due to the closure of our VISUfarma acquisition and dividend payout. Whilst we focus on increased cash generation for our business, we would like to highlight that we continue to explore strategic allocation of our capital to ensure the long-term mission of the company, including on the specialty front. On the ESG front, our ESG agenda continues to make strong progress in Q2 FY 2027. We achieved zero waste to landfill certification across eight manufacturing sites, including seven platinum rating advancement to circular ambitions and enabling more responsible management of waste and resources. We also strengthened responsible accounting through sourcing through ESG assessment of 130 suppliers whilst advancing diversity and leadership development. With this, I hand it over to the floor for questions.
Thank you very much, sir. We will now begin the Q&A session. Requesting all the participants who wish to ask questions to raise their hands on the participant tab on the screen. We will wait for 30 seconds for the queue to assemble. Thank you so much. Thank you for your patience. We will take the first question from Dhara Ganatra.
Hello. Am I audible?
Yes, you are. Thank you.
Thank you. My question was on the gross margin front, sir. As tolvaptan and mirabegron being the exclusive products, as they have come off in this quarter, and we are clearly seeing that with the decline in the revenues, the same impact has not been reflected on the gross margin side. What is the other offsetting factor that explains this?
Ramesh, will you take that? I just wanted to clarify that the decline is primarily tolvaptan. Mirabegron has been relatively stable. Please go ahead, Ramesh.
Yes, thank you, Vinita. Yes, as Vinita was saying, it is clearly because of that in the Americas, but there is a mixed change in other parts. Moreover, there has been tailwinds in terms of forex associated with impact on gross margins, and that's the reason why you actually say that the gross margins are more or less slightly on the higher side vis-à-vis the previous quarter. I mean, vis-à-vis the previous quarter, there's a decline, but it's not so steep.
Sure, sir. Thank you. That's all from my side.
Thank you so much for the question. The next question is from Shashank Krishnakumar.
Hi. Thanks for taking my question. Vinita, just wanted to understand on apixaban, reimbursement works for some of these 505(b)(2) products. There could be a few challenges with respect to getting reimbursement codes assigned and then getting coverage. Do you anticipate any of those challenges post-launch in the first few months? Could there be a lag in terms of the product gaining traction and revenue getting recognized?
Yeah. I mean, the differentiated products, 505(b)(2)s, are obviously not the same as substitution generics. So it is incremental effort, additional effort on gaining market access. But our team has been working hard building the right expertise and the right relationships into the channels that we target for the product to be able to gain share on a rapid basis. We still expect it to be a buildup over the months and quarters. We expect to launch the product first quarter of fiscal year 2028, and as we gain traction in the channels that we've targeted, we expect the share to build up.
Got it. Thank you. That's helpful. And the second one, if you could just comment on the progress that were made with respect to some of our respiratory filings, Respimat, Ellipta platforms, et cetera. Where are we in terms of I think we had guided to close to seven filings this year, so if you could just update on the progress there.
Yeah. We have made really good progress on Respimat. Exhibit batches are done, and the filing is this fiscal year on Spiriva Respimat. On the Ellipta franchise, we have had good progress on the Breo product, so that is expected to be filed later this fiscal year. It probably will slip a couple of months into first quarter next fiscal year, but the seven to eight products that we targeted with these two plus the MDIs remain on track to be filed within this fiscal year or within a couple of months of the end of the fiscal year.
Got it. Thanks. Just the last one, if I could squeeze in. The R&D spend, obviously for the current year, we are guided to around 8%. What we have seen in case of some of our peers is probably some optimization of R&D spend, which also has been happening. Probably sometime next year, FY 2028, is this also a line item which you could probably look to optimize given where margins might stand at that point? Or given your focus incrementally on complex filings, you expect R&D spend to sort of remain in this range?
We will take a look and have been reviewing the R&D spend to determine what is the best way for us to maximize our opportunities while not compromising on the material products. As we are investing into commercialization in a few areas, like a specialty in Europe, as well as 505(b)(2), like apixaban and biosimilars, we are looking to moderate and optimize on the other lines, including R&D.
Got it. That's very helpful. Thank you and all the best.
Thanks, Shashank, for your question. We will take the next question from Bino Pathiparampil.
Hi. Good morning and good evening. Vinita, what are your thoughts on FY 2028 U.S. revenues? Would you be able to match the FY 2027 number, or will there be some decline?
I would say that revenue should remain at $1+ billion , which is kind of a bar for us that we want to be able to maintain, of course. In terms of matching the level of fiscal year 2027, I mean, we have some pressures with tolvaptan coming off with additional competition. Post-September next year, we would expect additional competition on mirabegron. Of course, apixaban, dalbavancin, and the biosimilars, in particular pegfilgrastim, should help us grow. But we hope to be able to be at least at $1+ billion . As we look out in fiscal year 2029 and get the full-year impact of some of these more durable pipeline products, we would expect the business to grow.
Got it. Do you have a filing of etanercept in the U.S., and what is the status?
Yeah. We are in a very good position with etanercept across the world, and are expecting to file later this fiscal year in the U.S.
What would be the timeline? Would you be in the first wave, and what would be the timeline for that?
Yeah, we expect to be in the first wave in 2029.
Last question, the Europe and other markets revenue seem to be pretty weak this quarter. If I adjust for VISUfarma, it seems to be even down YoY. Why? Is there any particular reason for that?
Actually, Europe was pretty strong, double- digit, even without VISUfarma. The other markets, in particular Latin America and Brazil, we had additional competition in DAPA that we had tremendous upsides over the last two years. That was primarily the reason for the decline in the emerging market revenues.
Okay. I will jump back to the queue . Thank you.
Thanks, Bino. We will take the next question from Neha Manpuria.
Yeah. Thanks for taking my question. Ramesh, on the gross margin number, if I look at the FX, the FX hasn't increased materially quarter-on-quarter. I think it's up like 1.5% odd. Or probably, I think, Vinita, if you could just give us some color on what's the exit tolvaptan market share that we have, just to make sense of the gross margin number and how we should think about it going forward. Is it fair that we are expecting one more competitor to come through in tolvaptan in this quarter?
We expect potentially a couple of additional competitors can come in. We had market share of 50% in the last couple of months, being the sole generic on the marketplace. With this additional competition, obviously, we will be giving up some share. The bigger impact, obviously, is on pricing. We would expect the generic share to continue to grow, and we're certainly continuing to maintain a big percentage of our channel partners, but would expect the margin contribution, revenue contribution to come down significantly.
Understood. Therefore, Ramesh, in this context, is FX the only reason why we've been able to offset the tolvaptan impact on gross margins?
When I spoke about forex, it' s in the context of forwards that I'd taken in the first quarter. When we started the year, it was at, if you recall, around 89, 90. Essentially, some of the forwards were around that range. I had a depressed, the overall realizations for the first quarter, which is not there in the second quarter. That's the reason. That's what I meant by tailwinds in the second quarter.
Okay, understood. I think as we go forward, this should probably unwind itself a little bit as the INR stabilizes.
Absolutely.
Okay, understood. My second question is on apixaban. Vinita, I know you said that it's too early for us to say as to what could be the share that we could take, et cetera. But in your assessment, how easy is it to launch a 505(b)(2) to take this share? When you say incremental effort would be required, would this also mean investment on the ground or additional investment that we would need to make in the coming quarters before the launch?
Yes, we are planning to make additional investments in the next couple of quarters to be able to get the right market access and channel expertise and relationships to be able to build share in the exclusive window that we have prior to the generics coming in. We would expect to retain some share after the generics come in particular in segments that benefit from a liquid dosage form. So yeah, we have built in incremental efforts on the commercial front to be able to build share.
Understood. To that extent, given this is a differentiated dosage, this could be slightly more durable even after generics come in in fiscal 2029.
Yes. I mean, that's what we are expecting, as we look at the 505(b)(2)s. The thought is that you get a longer window in terms of from a business and margin perspective relative to your exclusive generics.
Understood. That's very helpful. Thank you so much.
Thanks, Neha. We will take the next question from Kunal Dhamesha.
Hey. Hi. Can you hear me?
Yes, we can. Yeah.
Yeah. Thank you for the opportunity. Vinita ma'am, on the apixaban strategy, would it be focused more on B2B customers, getting the formulary access and then leading to substitution, or would it be more B2C kind of strategy? What are the initial thoughts?
Yeah, it's more targeted on channels where we believe that we can impact through the efforts that we make, as opposed to a direct B2C. It would be aspirational to get products, and this would have been a good one if we had multiple years before other generics got in to do B2C.
Sure. Thank you. And one for Nilesh on India business. We are suggesting that you'll be growing at around 1.2x- 1.3x . But if I look at H1, we are more or less around 1.1x . Right? What are the drivers of acceleration here for us in H2?
Yeah. So for H1, we're actually 16% ahead of the market, but definitely not where we need to be. I think we've seen in respi in particular, very slow growth. That's definitely pulling down the average. Cardiac has slowed a little bit as well, but we continue to be well ahead of the market. Diabetes is where we're obviously excelling. We expect respi to pick up. Usually the second half is better for respi, so we expect respi to pick up now. There's no reason why cardiac should not bounce back as well. Our goal is 20%-30% ahead, so we are short of that. But, and we've got some new launches. Obviously, the business is doing well. The entire chronic share is so solid. Obviously, we would expect to build back growth.
Sure. In respi, this slowdown, is it more on some of the tablets, et cetera, or is it more on the inhaler side that we are witnessing?
On the inhaler side. Everybody has been coughing in India the last few months. I think those remain strong. That's not our focus area. Our focus is on the inhalation side, MDI, DPI, and nebulization, and that part has been slower. You seem to see this alternate years of very solid growth and then lower growth. Last year was very solid. The year before that was actually slower. The year before that was very solid again. There is no sense in this pattern, but I do see it picking up in second half.
Sure. Lastly, on capital deployment, right? We have some room to kind of lever up to add inorganic growth lever. What are your thoughts in terms of capital deployment priorities beyond capital expenditure?
You would like me to take this question, Vinita?
Yes, please.
So clearly, we are an acquisitive company, but we would obviously be judicious in our choice of investments. Based again on the proposition, our first choice obviously would be specialty in various parts, Europe, America, and equal importance to acquisitions in India, but only at a cost which is appropriate from our perspective.
Will there be a very active pipeline that we would be looking at right now?
We have entered the ophthalmic space, and clearly we would like to grow in that space across the globe. India, of course, based again on the proposition. So in our overall capital, we would keep the threshold limits of twice the EBITDA, so to speak. So that would potentially mean about INR 16,000 crore-INR 17,000 crore for debt, and about INR 3,000 crore-INR 4,000 crore that we have on our balance sheet. So we could go up to INR 20,000 crore really, but the proposition should be compelling enough.
Sure, Ramesh. Thank you, and all the best.
Thank you for your question. The next question is from Kunal Randeria.
Hi. Good evening. First question on XYWAV. I believe your litigation is still on with the innovator, while one of the Indian filers has already settled. My question is this an FY 2029 opportunity for you, and do you expect a sole exclusivity or a shared exclusivity?
Well, it's not FY 2029, it's a further out opportunity, XYWAV in particular, and we believe that we were sole exclusive, we were first to file. Of course, that brand can always launch an AG or partner with companies that they settle. But those, I mean, we don't have privy, they're not privy to those arrangements.
Got it. Got it. Vinita, are DULERA and diazepam nasal spray still opportunities for next year, and can they be meaningful?
Yes. I mean, we are expecting diazepam for certain, but hopefully DULERA also, depending on the queries we get from the FDA, hopefully is an opportunity next year or early the fiscal year 2029.
Got it. Got it. Just one more clarification on apixaban. I believe you may have a 10-month window before the ANDA generics hit the market. Are you confident of maintaining and perhaps even enhancing your FY 2028 apixaban revenues in 2029 and 2030?
We hope so. We will learn a lot through this launch, because of course the time we have prior to generics coming in is going to be likely the most valuable, but we expect to retain share, especially in the channels where the liquid dosage form brings real benefit to patients. So we hope to have a tail in the coming years.
Right. Right. Thank you very much. This is very helpful. All the best.
Thank you.
Thanks, Kunal. Before we get into the next question, this is a reminder to request all the participants to raise their hands from the participants tab for more questions, please. We take the next question from Shyam Srinivasan.
Yeah. Good evening. Thank you for taking my question. Just one on, as you prepare to launch these five biosimilars in the U.S., what are some of the learnings that you're seeing the first wave guys have gone through the challenges, and when you arrive in the markets, what are you trying to do differently to kind of achieve the kind of stated shares that you have probably achieved on the small molecule side? Is there something that you need to keep in mind from a philosophy perspective of how we approach biosimilars in the U.S.?
Yeah, I mean, our learning so far, and obviously we have a lot more learning to do once we get into the market with these products. I mean, our first one, pegfilgrastim, has launched through our partner, Valorum, so certainly looking forward to learning from that experience as well. As we have seen companies in the market over the last couple of years, I mean, it's pretty clear that what tactics and strategies succeed on the biosimilars front are very different from small molecule. I mean, the erosion on the pricing standpoint, discounting by manufacturers really doesn' t help much on the biosimilars front relative to our small molecule generics. One really needs to very carefully look at the incentives to the payers on the biosimilars front that really drive substitution on biosimilars.
I mean, we are very pleased that we are going to ramp up these products over the next few years at a time when there is significant openness relative to five, eight years ago. Biosimilars were still nascent. Today, there is a pretty active and adoption of biosimilars in the marketplace, and a lot of learnings of companies that have exited products as well as come back into the market with different strategies that really inform how we launch the products that we plan to launch over the next few years.
Got it. Helpful. Just a second question on your U.S. guidance. So we have done one half at $683 million, right? So even if I take the midpoint of your full year guidance, $1.1 billion-$1.2 billion, we are talking about like a quarterly run rate of $230 million per quarter, right? Maybe quarters could vary. Is that the kind of like $100 million loss that we envisage, or you think Q2 probably has come in far better than what you thought? If, and the reason to just hold onto that guidance maybe, is there upside risk is the question I am asking.
Yeah, Q2 was above our plan. Q1 also was above our plan, and therefore we will maintain our guidance, and we will see if we get any upsides to it.
Got it. Last question on the India business. I think prescription business was called out at 14% with 6% volume growth. Chronic business growing faster. If you could help us disaggregate how the chronic business volume growth has been happening as well, and if I were to kind of just keep overall anti-diabetes out, I'm just saying since it's a category, especially semaglutide, it started this year. I just want to see X of that, if you could give us some qualitative color on the growth, please. Thank you.
I have the value, I don't have the volume. I mean, the volume growth, like you said, H1 is 19.5%, Q2 is 17.4%. The volume overall MAT is 8.6%, and H1 was 6.1% volume growth. I would presume that most of it would be from chronic only. The semaglutide number is not very large. We're the third-largest generic, but the semaglutide number is not very large in that volume. So, I would presume that the volume would be very close to that. But if you want a more specific answer, we can get it to you.
No problem. Thank you, and all the best.
Thanks, Shyam. We'll take a pause for 30 seconds for the queue to assemble. Thank you so much. Thanks for the patience. We'll take the next question from Rashmi Shetty.
Yeah, thanks for the opportunity. Vinita, what is the addressable market size of apixaban oral suspension?
The overall brand is $10+ billion, right? We have certain channels that we have targeted that are a good percentage of the market.
Got it. Is it fair to understand that the EBITDA margin won't be similar to the substitutable generics exclusivity?
The EBITDA margin, I would say, should be fairly attractive. We are expecting a margin like an exclusive product, but with some investment on the commercial front.
Got it. For the full year, as you have given the guidance of $1.1 billion, $1.2 billion for the U.S. market, for FY 2028, when you are saying that you would be able to maintain at least $1+ billion , that includes your apixaban estimates?
Yes.
Okay. Thank you. That's it from my side.
Thanks, Rashmi. We will take the next question from Tushar Manudhane.
Thanks for the opportunity. Ma'am, if you could share your thoughts and other development work in the peptide segment, apart from whatever we have launched for the regulated markets, specifically U.S.
Yeah, so on the peptide front, the products that we have launched so far are glucagon and liraglutide. As we look at the next couple of years, glucagon and liraglutide will continue to be the material products. We don't expect to get products like semaglutide and others, the newer peptides, the GLP-1s, into the market anytime soon, just given the patent expiry is beyond the five-year timeframe for those products. In the near- term, the injectable products that are turning out to be really attractive for us, Risperdal Consta is one of them. Sugammadex that we just launched is a nice opportunity for us. Dalbavancin, both the 505(b)(2) as well as generic opportunities are nice opportunities for us. Then, broadly, we look at biosimilars, also injectables. We see larger opportunity on the biosimilars front, even compared to injectables in the next three to five years.
Got it, ma'am. Similarly on the iron colloid side?
Yeah. We expect some niche product launches on the iron colloid side as well.
If you could share, without getting into product-specific details, but let's say addressable market and the timeline to launch.
Maybe we will get back to you. Ravi's team will get back to you with additional details there.
Sure. Thanks. That's it from me.
Thanks, Tushar . We will take the next question from Foram Parekh.
Hi. Thank you for the opportunity. My first question is on the company-level EBITDA margin. Since we have mentioned about couple of pipeline products, and apixaban launch would be there in FY 2028, whose margins would also be like an exclusive product margin. My question is, do we see a company-level EBITDA margin going back to 29%-30% in a span of five years with so many products in pipeline?
Vinita, I will take this question. Yes, if you were to take 29%-30%, clearly we would get to those levels. There is, of course, the investments coming up on a host of things. Given the fact that some of those areas that we are getting into have very good realizations, the 505(b)(2)s, the biosimilars portfolio, the specialty products across the globe, including U.S. and all of that really scaling up, we could get to those levels. So secular growth is kind of expected over several quarters, whilst the 2028 period could potentially be a period of consolidation, so to speak.
Sure. Also, on the U.S. run rate, if you could highlight something. In FY 2029, I understand in FY 2028 we have apixaban, but in FY 2029, with the help of specialty and complex injectables and respiratory products, would it be fair to assume that we will maintain a $1 billion run rate?
Yes.
Okay. My last question is on the India market. I read in the presentation that on the chronic side, we will max out at 70%, and we have already achieved 66% of our chronic contribution. Assuming that we will achieve 70% target in near- term, we will not go beyond 70% on the chronic side. Is that a fair understanding?
I would love to prove you wrong. I mean, our plans are adding up to that 70% odd. That doesn't mean that we're going to stop there, right? I mean, we are a chronic story, so that's where the growth will come from. Consistently, the growth on that side has been higher. There are acute or semi-acute parts of our India business as well, so those will grow as well. But the focus remains on chronic, and therefore, theoretically, that chronic share will keep growing.
Sure, that's helpful. Thank you. Those were my questions.
Thank you, Foram. We'll take the next question from Alankar Garude.
Hi, thank you for the opportunity. First question, Vinita, are you evaluating the possibility of a partner for apixaban?
We looked at all opportunities and options, believe we have a really strong commercial strategy here.
On the manufacturing front, given this product is filed from Somerset, do you think there is enough capacity available to drive the best outcome in FY 2028?
Yes, actually, our team has worked very hard on it, global operations and supply chain team, as well as Somerset team, to ensure that we can meet our upside scenario.
Got it. The second question, Ramesh sir, on the cost side, are there any levers available, maybe some discretionary spends, which you might have incurred over the past couple of years, which could reverse as tolvaptan contribution comes down further?
So, if you are talking about specifically the expenditure increase, this is essentially because of the settlement on a kind of mirror background, which is also included in there. That would reverse out. The second is, we are also investing ahead of the curve in terms of IT, a number of platforms, plus, of course, AI spends and the like. And we would expect a lot of outcomes to come in from there. And clearly, there is an investment phase, and that would play out over the next few quarters. So, if you were to take a period of time, say three, four years, you would expect the IT spends to be low, would increase, but as a percentage of sales, to be much lower. And of course, the outcomes from those are visible across various other lines.
Understood. So basically, these are more about productivity gains rather than any discretionary spends coming down or maybe staying flat on an absolute basis?
Well, discretionary spends, so it's essentially with better ways of looking at, they are ways of looking at productivity. So clearly, with the advent of technology and the like, a number of things would be made possible.
Got it. That's it from my side. Thank you.
Thank you, Alankar. Since we have time for one last question, may I request participants to raise their hands from the participant tab? We will take a pause for 15 seconds. Thank you. Thank you very much for the patience. Since we don't see any raised hands, I will now hand over the conference over to the management for their closing comments. Over to you, ma'am.
Thank you. Well, thank you, friends, for all your questions. Hopefully, we were able to give you all the answers, and otherwise, our team will be in touch with any additional clarifications that you need. As you can see, and hopefully what you heard, we remain confident in growing our business in a more sustainable manner going forward. The investments that we are looking at in areas like specialty, in particular for Europe, as well as biosimilars and 505(b)(2)s, give us the confidence that we should be able to evolve our developed market business on more durable, more sustainable portfolio going forward, as opposed to the one-off exclusives. Our consistent performance and increased investment in India continues to be a very strong anchor for our growth going forward.
We remain very excited about our prospects over the next five years, and look at the next year as a year of investment and building capabilities to build a more resilient business going forward. Thank you again for your time today, and we look forward to connecting with you soon.
Thank you, ma'am, and thank you to all the participants. On behalf of Lupin Limited, that concludes this conference. Thank you for joining us, and you may now exit the webinar. Thank you.