Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY 2023 earnings conference call of Eris Lifesciences Limited. We have with us on the call today Mr. Amit Bakshi, Chairman and Managing Director, and Mr. V. Krishnak umar, Chief Operating Officer and Executive Director. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. V. Krishnak umar, Chief Operating Officer and Executive Director of the company. Thank you, and over to you, sir.
Thank you. Good afternoon, and welcome to our earnings call for the second quarter of financial year 2023. I'm V. Krishnak umar, and I'll be sharing the highlights of this quarter and the first half of the year with you. Oaknet, our recent acquisition in the month of May 2022, is emerging as a clear success story in value creation through M&A. Oaknet's growth momentum continues with quarter two revenue of INR 68 crores and EBITDA of INR 16.5 crores, which represents an EBITDA margin of more than 24%. We are tracking to deliver an EBITDA of INR 50 crores from Oaknet in this financial year. Just to recap a bit, we had acquired Oaknet as part of our strategic entry into the Dermatology segment. Our thesis was that Oaknet brings in two strategic assets.
Firstly, a strong portfolio in Medical Dermatology with brands such as Cosalic and Cosmelite. Secondly, a good presence in the specialty with a coverage of 11,000 Dermatologists across the country. Oaknet had a revenue base of INR 195 crores with an EBITDA of INR 20 crores when we went into the business. Our target was to build the business and achieve an EBITDA of INR 50 crores in two years' time, that is, in FY 2024. Accordingly, we set various levers in motion of execution excellence, including, firstly, realignment of the divisional focus with specific product portfolios and Doctor specialties to maximize growth impetus and minimize overlap. Secondly, we expanded the bandwidth of the Senior Team. Thirdly, we digitized the entire field force and got them onto Eris's proprietary digital marketing platform to enhance productivity.
Fourthly, we saw an expansion of the Dermatologist coverage from 60%- 90% in just three months. We also kickstarted the investment cycle in the business by launching strategic products such as Dydrogesterone and FCM injection in the Gynecology Division. We also lined up an interesting pipeline in Dermatology and Cosmetology for launch starting this month. A few months into this deal, our growth thesis has been more than reconfirmed, with the business having delivered a revenue of INR 100 crores in a period of just 4.5 months with Eris. We are now tracking to deliver an EBITDA of INR 50 crores in financial year 2023, which is one full year ahead of our expectations at the time of the deal announcement. Now moving to the growth numbers.
As per AWACS, Eris delivered a growth of 19.3% in quarter two of this year versus a market growth of 13%. This is on the back of an 8% growth delivered by Eris in quarter one versus a market growth of 2%. Hence, on a half-year basis, Eris has delivered a growth of 13.6% versus the market growth of 7.4%. We have now entered an era where we have clear visibility on secular growth over the next three years. Let us begin with our Cardiometabolic Segment, which accounts for 53% of our revenue. This market has bounced back with a 14.6% growth in quarter two after having gone through a one-time correction of 4% growth in the preceding fourth quarters.
Eris has registered a Q2 growth of 21.8% in this segment, which is 720 basis points ahead of the market. In the last six quarters, our Cardiometabolic Business has grown at a 12% CAGR compared to the market growth of 5%. Once again, a lead of 700 basis points. We expect that the Cardiometabolic market will be able to sustain a mid- to early-teen growth rate over the next three years, with 5%-6% growth coming in from new products, 4%-5% growth coming in from price increases, and 3%-4% growth coming from volumes.
We expect that Eris will continue growing ahead of this market by a healthy margin on account of several exciting growth drivers, including patent expirations and new product opportunities in the DPP-4 and SGLT2 segments, growth from our Insulin Glargine and GLP-1 segments, and patent expirations in the heart failure segment. Secondly, let's talk about our three emerging therapies, Dermatology, CNS, and Women's Health, which collectively account for 21% of our total revenue. Our portfolio in these segments has achieved critical mass with combined annual revenue of INR 420 crores as per AWACS. This portfolio has registered a growth of 25.3% in quarter two of this year versus a market growth of 15.8%, which represents a lead of 950 basis points.
Over the last six quarters, this portfolio has registered a CAGR of 25% versus the market growth of 14%. This represents a lead of 1,100 basis points. We expect that Eris will continue growing ahead of the market by a meaningful margin on account of several growth drivers, including new launches in Dermatology and Cosmetology. secondly, a force multiplying effect that is in play in the Women's Health Therapy with more than 470 reps in the market across two divisions in Eris as well as Oaknet. Expansion of specialist coverage across the board and potential inorganic opportunities. Zomelis, our Vildagliptin mother brand group, continues to sustain its growth trajectory with a monthly run rate of INR 9.3 crores in September. This represents an increase of INR 1 crore in monthly run rate from the June figure of INR 8.3 crores.
With this, the Zomelis Mother Brand has grown 9x, nine-fold in less than three years from acquisition. In yet another milestone, Gluxit, our Dapagliflozin Mother Brand group, has achieved a monthly run rate of INR 5.1 crores in September 2022, which represents an increase of INR 1.2 crores in monthly run rate from the June figure of INR 3.9 crores. Key new products launched in this quarter include Glura, which is our brand of Sitagliptin, Gluxit S, which is a combination of Dapagliflozin and Sitagliptin, and Raricap FCM in the Women's Health Therapy for the treatment of iron deficiency Anemia. We have an interesting set of new product launches coming up in Q3 as well, including X-Klar, which is our brand of Glargine in-licensed from Biocon this month.
Coming to the financials, our standalone operating revenue amounted to INR 355 crores this quarter, which represents a growth of 10% year-on-year. The standalone operating revenue for the first half of this year stood at INR 684 crores, which is a growth of 9%. Our standalone gross margin in Q2 stood at 80.2% versus 82% last quarter, which is down by 180 basis points owing to a higher incidence of new products this quarter. The impact of industry-wide raw material cost escalation in our portfolio continues to remain minimal. With the addition of nearly 200 MRs since the start of the year, our standalone YPM stood at INR 5.3 lakhs this quarter, up from INR 5 lakhs last quarter.
Standalone EBITDA for the quarter stood at INR 141 crore, which represents an EBITDA margin of 39.7% versus 38.4% in quarter one. Standalone net profit for the quarter stood at INR 115 crores, which represents a profit after Tax margin of 32.4%, and this includes Oaknet-related impact on treasury income and finance cost. Our Consolidated operating revenue for the quarter was INR 461 crores, which represents a growth of 28% year-on-year. The Consolidated operating revenue for the first half of this year grew by 21% to INR 859 crores. Consolidated EBITDA for the quarter stood at INR 151 crores, and EBITDA Margin stood at 33%.
Consolidated profit after Tax for the quarter stood at INR 119 crores, which represents a margin of 26%. This is inclusive of all Oaknet-related impact on depreciation, treasury income and finance cost. The overall margin profile for the first half of this year is in line with our expectation, given that FY 2023 is a year of unprecedented investments, including the launch of our Insulin Business, the Amalgamation of Oaknet acquisition, addition of a field force of 200 people, launch of significant new products across Therapies, and commissioning of a new manufacturing facility in Gujarat. Our Gujarat facility is on track to commence commercial operations in January 2023. The total CapEx outlay for the facility is to the tune of INR 170 crores-INR 180 crores, of which INR 150 crores has been invested till date.
Inclusive of Oaknet, we are targeting a Consolidated revenue growth of 30% and a Consolidated EBITDA growth of 16%-17% in this financial year. These were the highlights for the quarter. We are now happy to open up for questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Hi. Thanks for taking my question. Just, you know, couple of questions. One, the logistics question on the Depreciation and Amortization, which has increased by roughly INR 5 crores-INR 6 crores this quarter on a sequential basis. Is this the sustainable run rate, given now we will have Oaknet amortization included?
The second quarter represents the full impact because what happens is the Oaknet acquisition cost of INR 650 crores, right? That is getting amortized over 20 years. INR 30 crores per year is the rough, you know, Depreciation and Amortization expense from Oaknet alone. The full impact of that is taken in quarter two. I would say the answer to your question is yes.
Secondly, you know, within our, let's say, antidiabetic, you know, pie, what would be right now Sulfonylurea, DPP-4 and SGLT2, and how does that compare to, let's say overall, Indian Antidiabetic, Oral Antidiabetic Market?
For us, the presence of DPP-4 and SGLT2 is about 35%-40%. Right. For the IPM, this percentage is slightly higher because the IPM number includes the patented molecules as well. So the IPM number will include Empa, it will include Empalina, it will also include Sitagliptin patented. For us, this number from the new age molecules is higher than many of our peers, but it is still catching up with the IPM.
Right. When I look at the standalone growth, which is at 10% year-on-year basis, right for us, if I look at some of the secondary sales number that you have put in the AWACS, we are kind of growing faster than almost all the Therapies that we are present. Why would you say it is not getting reflected in the primary number for us?
There are a couple of reasons for this, Kunal, and I mean, I'm sure you understand that on a quarter-on-quarter basis, it is a little challenging to see parity between internal numbers and AWACS numbers. When we have seen the average for the last four quarters or the last six quarters, then the difference narrows down quite a bit. You still have a 2%-3% difference, but it is not as stark as, you know, what we see in quarter two. We believe that this difference will iron itself out over a period of time.
There is also a second driver, and I think this is something that we'll continue to see at least for the next three quarters, which is that there are quite a few products in the category where, you know, there is some legal thing going on, where, you know, I don't want to go into too much detail, but these are stocks that are lying in the market which are selling. These come into the secondary sales, but we don't necessarily get any primary sales out of it. This is also a contributing factor.
Correct.
It is a mix of factors. As I said, if you look at it over a long enough time frame, then these differences tend to iron themselves out.
Okay. The secondary sales that are for those products would have come into primary sales earlier, right?
Yeah, they did. I mean, they didn't come in this quarter, so that is the challenge, right? You're seeing a 10% primary and a 19% secondary in this quarter. The difference is very stark, and that is where I understand this question comes from. Because a 3%-4% difference is something that you will have in every quarter.
Okay. Basically those are as of now discontinued products from your side.
I wouldn't say discontinued, but on hold pending resolution.
Pending.
I would say.
Okay.
Yes.
Okay. Sure. Thank you for answering my questions.
Thank you. Participants, if you wish to ask any questions, please enter star and one. Ladies and gentlemen, to ask a question, please enter star and one at this moment. The next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services. Please go ahead.
Yeah. Congrats on a good set of numbers. Just with the standalone level, as I see, you know, the year-on-year growth is still 10%, where the industry growth is looking better than this. That was one part. Secondly, even the EBITDA Margin is kind of slipping down from 41%- 39%. If you could share or comment on both the aspects.
Sure. I mean, on the standalone side, you know, there are a couple of factors that will come into play which are not visible yet. I think one is that, both the quarter four of last year and quarter one of this year, they have been very busy quarters in terms of new product launches. These launches will gain scale, and they will gain momentum in the quarters to come. That is one aspect that will start showing itself up in the standalone numbers going forward. The second aspect is corresponding to, you know, whatever inflationary trends that we are seeing. We have been allowed to take price increases starting April, but these price increases will also start manifesting themselves only in the second half of the year.
Because, you know, unless we run out the existing stock in the market, the price increase effect also doesn't come into play. These two factors will start having a bearing on the standalone growth, going forward. That is one part. The second question was about the standalone EBITDA Margin. This is completely driven off COGS because, every time, you know, we launch a new product, it comes to us at a lower gross margin. The corporate average gross margin, excluding the new products, continues to be at around 83%-84%, right? But when a new product comes in at a 70% gross margin, for example, it dilutes the COGS by two-three percentage points for that quarter.
When these products scale up, when we take the production in-house, we have seen that over a period of time, Zomelis, Gluxit, they've all followed this trajectory. That is the reason why you see a dip in the gross margin, which is temporary, and that dip in the gross margin is reflected in the EBITDA Margin.
Sure. Just lastly, while you alluded to NLEM related price hikes and that will further have a positive effect on the growth going forward. The kind of traction which you are having on the, let's say, Zomelis and Gluxit set of products, and despite that if the year-on-year growth is so effectively 10% as I see on the standalone level. Somewhere in the base portfolio are we seeing relatively lower traction and any particular comment out there and any specific effort to drive the growth in the base portfolio?
See, the base portfolio anyway took a, you know, big hit with where the market was for the last four quarters, right? I mean, before Q2, we know that and we have discussed it before and we've all speculated on the reasons as to why is the Cardiometabolic Market growth down to, you know, 4%. I think there were a couple of things, right? One is that, before our three emerging therapies, derma, neuro and, you know, women's health have scaled up. Now they are like 1/5 of our revenue, which is a good place for us to be in. Till not very long ago, our company was basically being driven off two engines, basically Diabetes and Cardio. Our fortunes were totally tied to, you know, how these markets were behaving.
The market in Cardiometabolic is just coming back now. We've had three or four months of straight secular growth. You know, as we see when the market takes a beating, you know, some of the, you know, brands take a disproportionate beating. That's something that we've seen over a period of time. With the market correcting, I would say that, most of the brands, I think products like Zomelis and Gluxit will continue growing at, you know, very fast rates. We have products like Telmisartan, Olmesartan, Rosuvastatin, which will be in the 10%-12% per Annum growth category. We have the Sulfonylureas, like, within Glimepiride, we have Glimisave MV, you know, which is growing very fast. The traditional Glimepiride plus Metformin, that will be more like a 6%-7% growth market.
Going forward, that is the kind of, you know, numbers that we see. To the extent that we continue getting into more and more of the Gliptins and the Gliflozins, and there are heart failure products coming up starting January, the overall growth, you know, traction should improve.
Yeah. Also, Tushar, you know, the growth in this quarter from an AWACS point of view is distributed across. It is very difficult to choose. You look at it at any Therapy, even at the brand level, the growth is quite secular this time. Though we believe that, you know, this could be a little bit of an exaggeration from a growth perspective. As KK rightly said, three months is not a good time to look at. One month or three months is not a good time. We have seen over years, by the end of the year, it basically tapers down to a level which is acceptable.
Remember what KK told. We will be having a 300-400 basis points difference accounting for products which we sell in, which sell in the market, but we don't get any primary for. This will continue till August next year. That is our clear-cut understanding.
Got it, sir. Just lastly on Oaknet, now that we have already, you know, in a sense one year ahead of meeting the target of INR 50 crores EBITDA, if you could just further extend how we see FY 2024, which is maybe like six months down the line. If you could further elaborate on the efforts to be taken on the FY 2024 and onwards EBITDA for Oaknet acquisition.
Yeah. Tushar, we are happy with Oaknet. You know, you could imagine, you know, a lot of work wouldn't have gone in two quarters or, you know, not even two quarters yet. It is just the structural changes which we have got at this point of time, which has given, you know, some kind of positive vibe. We are quite hopeful about this business. I think that, you know, our thesis of the business as we are progressing is changing. Now we are thinking about a 30% range kind of EBITDA in the time to come. We have kind of, you know, upward revised our numbers, both from the top line as well as the bottom line because
It will always happen, Tushar, because, look, INR 3 Lakh s YPM is a very sensitive point or a sweet spot. You can choose to whatever you like. Sweet because after INR 3 Lakhs, whatever growth comes, most of it falls into EBITDA. The journey from INR 3 Lakhs to a INR 5 Lakhs YPM is always more accretive at the EBITDA level. This being there will show higher EBITDA once the sales grow up.
Understood. Okay. Thanks, and all the best.
Thank you.
Thank you. The next question is from the line of Mehul Sheth from Axis Capital. Please go ahead.
Yes. Thank you for the opportunity. One question on your cost part, right? Your staff cost TPC, it's almost 50% YoY, but on other expenses side, it's more of like a flattish number on a sequential basis as well. What this means. Can we consider this cost number? Means this quarterly run rate to be continued for next, which is, it will be a basic quarterly run rate now for both?
Yes. This is choice because I think even in the last quarter, Amit made this point that, you know, the kind of competition and the kind of competitive intensity that is being witnessed in the new launches at present, and specifically in the case of Sitagliptin, which happened a couple of months ago. We are not, you know, doing anything significantly out of the ordinary in terms of, you know, promotion for the new products. Right now, we are there in the market, we are participating in the market, and we are doing, you know, whatever it takes to be there.
The bare basics.
The bare basics. You know, the real competition and the real differentiation in the new products, whether it is a Sitagliptin or anything else, it will happen, you know, nine-12 months later when the dust settles down. It is a very conscious call that, you know, we decided to keep the other expenses at the same level on a linear basis. I think, for the remainder of the year as well, going to the second half of your question, we will broadly be in the overall numbers that we had indicated. We've indicated that, thanks to all the investments happening this year, we'll be in the EBITDA Margin range of 32%-33%, and we expect that, you know, that is where we will end up at.
Sure. Yes, sir. Also, one question on your. You had mentioned that product on hold in-
Sorry to interrupt. Your voice is not very clear. If you're using earphones, can you speak through the handset mode?
Yeah. Now it's clear?
Hello.
Okay, be a bit louder when you ask your question.
Yeah, yes. Just one question was on your MR productivity on Consolidated levels. You have mentioned about standalone, but what it would be at Consol level?
Yeah. We don't necessarily track this at Consol level, so we can get back to you. The two biggest entities are Eris Lifesciences and Oaknet Healthcare. Eris is at INR 5.3 Lakhs, and Amit just mentioned that, you know, Oaknet is in the INR 3 Lakhs-INR 3.5 Lakhs zone. We expect that, you know, by the end of the year, Oaknet will get into a better zone in terms of run rate. The average, you know, at the Consol level, it will be somewhere in between the two numbers.
Okay, sir. Thank you. Thank you. Thank you.
Thank you. Participants, if you wish to ask any questions at this moment, please enter star and one on your phone. The next question is from the line of Sonal Gupta from L&T Mutual Fund. Please go ahead.
Yeah, hi. Thanks for taking my question. Good evening, everyone. Just on this, on Oaknet, I mean, like we've, like you mentioned, you've done INR 100 crores of revenue in four and a half months. Should we expect that, and even, you're almost at, INR 23 crores of EBITDA, and your EBITDA margin has gone to 24% this quarter. I mean, like, but you're still guiding for INR 50 crores. Is there some one-off in this quarter, or should we expect that there is a good likelihood that you'll exceed the numbers?
I think we'll have to see how the next couple of quarters play out. I think we anchored it in the INR 50 crores number because when we made the acquisition, we had given a guidance of INR 50 crores in FY 2024. I mean, there is more than enough line of sight to see that INR 50 crores will happen in FY 2023 itself. That's the reason to pick that number. You know, in terms of how the next two quarters will pan out, as Amit said, you know, we've been in the business only for four months or so. I think we'll be in a better position to answer this once we are through with quarter three.
Correct.
Got it. On the Tax rate, is there some benefit of the Oaknet acquisition which is depressing the Tax rate this quarter? Could you just highlight?
No, the Tax rate, Oaknet EBITDA has been around INR 60-70 crores this quarter. Overall, if you see the Tax impact, we have taken it as around 9% on an annual basis.
Tax rate is 1%, right? Consol.
9%.
I mean, your Tax
Here, the Consol level is at 1% of PBT.
Yeah. That's what I'm asking, is that because
9%.
No. I'm asking that, this 1% on a full year basis, this should revert to 9%-10%, right?
Yeah, it is 9%. If you take H1, right? You'll see the number to be around 9%. There were some higher Tax provisions in the quarter one, which we have reversed. Overall, if you see H1, it will be 8%-9%, and that's where it will remain.
Got it. Just in terms of like, when you'd originally guided for 30% growth for this year, you were expecting around 15% growth on an organic basis. I mean, given what's transpired in the first half, how do you see that target?
I think it depends on, you know, how Q3 pans out, because we've only seen one quarter of revival, four months to be precise, in the Cardiometabolic Market, and that is what has, you know, led to slight uptick in our expectation as well, which we've outlined in our investor presentation. Our expectation, as I highlighted in the earlier part of this call also, that we'll get two effects flowing in in the second half. One is the benefit of the price increases will become visible, and second is the benefits of the new product launches will also become visible as the products scale up. Yes, absolutely, it is expected that, you know, there will be some improved traction in the second half, subject to, you know, the market continuing to support.
Got it. Just a clarification on this, price increase impact also, right? Like, I mean, if you've taken the price increases from April or even from June, the primary sales that you've done this quarter should reflect that benefit, right?
It doesn't work out like that. It works out from the last year to date. If the last price hike was taken, say on a product last September, then you have to take it this September. That's how it works out. It doesn't follow the calendar year or a financial year. It follows a twelve-month period from the last increment which you took. That is why you see this, you know, lag.
Okay. Yeah, that I understand. Are your price hikes more weighted towards the second half of the year, is it?
Correct. Absolutely.
Got it. Okay, great. Thank you so much.
Thank you. Participants, if you wish to ask any questions, please enter star and one. The next question is from the line of Yash Tanna from ithought PMS. Please go ahead.
Hello.
Yash Tanna, your line has been.
Yeah.
Yes, please.
Yeah. Am I audible now?
Yes.
Yeah. Good evening. My question was around Dydrogesterone that you've launched this quarter. I think there are two or three big players who already have a decent market share in this molecule, and maybe you can correct me if I'm wrong. There are two or three players who already have a very decent market share, and there are a few new players also who have entered this market. On this particular molecule, how do we see growth and how big is the market, if you can just highlight on that part?
I'll just answer the market part, and then I'll invite Amit to share his insights as well. The Dydro Market is INR 750 crores Per Annum now, and it is growing, still continues to grow at 45%-50% Per Annum, which is a Phenomenal Market to be in because, you know, that's been our thesis all along, that let us participate in high Growth Markets and let us try and take a disproportionate share of the Incremental Market that gets created. INR 750 crores market growing at 45%-50% per annum means that what you have like a INR 300 crores-INR 350 crores market getting created every year. That's like a new playing field for us.
In terms of, you know, what we are seeing on the ground on competitive intensity, et cetera, I would invite Amit to share his comments.
Yeah. There is a little bit of disadvantage which we have because, you know, the price have crashed. Crash is not the right word. The prices have come down in the last three months, and we are having an inventory which will last us for at least four more months. That is a small disadvantage of we not being able to participate in this price going down and at least for the next four months. It's after, I think December- January, we'll be able to do the price again. I think we will be missing our target. We were thinking about INR 30 crores by the end of the year, which I think now stands at around 25%-26% in that range.
At the prescription level, we are doing fine and Dydrogesterone is something which we won't miss in the Gynecology Therapeutics. That's where we stand at this point of time.
Right. Okay. Thanks. That's all.
Thank you. Ladies and gentlemen, if you have any questions at this moment, please enter star and one. Next question is from the line of Kunal Dhamesha from Macquarie. Please go ahead.
Thanks for the opportunity again. Just on the Insulin Franchise. We have been in the market for you know now I think more than six months right? What has been the initial you know thought process? We kind of command 5% plus prescription share in the oral Anti-Diabetic Market. Is it basically going to translate us for Insulin Franchise as well? Any thoughts on that would be useful.
Yeah, Kunal. Good question actually. We believe that we'll end up this year at around INR 18 crores. That's what we think we'll do, INR 18 crores-INR 20 crores this year. This is all started from scratch. There's no other product which is there in the market. We feel that INR 18 crores -INR 20 crores is a good number for the first year. It's all organic growth. It also applies the thesis again that, you know, we think we will be profitable next year. Therefore, a good thing is you can still build a good business, you know, and make it profitable in one year's time. We are good with the Insulin Business as such.
As I told you in the last call, you know, strategically you have to wait it out for six-nine months so that the product becomes available. Availability in Insulin is very, very important, and it's a product which is not available across because of, you know, the kind of requirement it has from the storage point of view. I'm quite happy about this, and you will see a lot of traction building up in this business, as with the launch of Glargine, which is very contemporary. We are launching it just Post-Diwali, so that means starting on November. That will get us to the second phase of growth in Insulin. So far we have done well. We will be a considerably good player in the Insulin Market. The quality has been appreciated.
You know, we've been around for some time now. We have thousands of patients on our Insulins now. More than 20,000 patients are taking our Insulin. We are working on it. I think we are on right track.
Just a follow-up on that. If I look at our revenue and EBITDA on the Insulin Franchise, let's say roughly on a quarterly basis, we're like making roughly, you know, INR 8 crores kind of EBITDA loss. Right? But let's say when you launch Glargine, do you see that there is an incremental launch cost, et cetera, coming in for Glargine?
Yeah. There will be Incremental Cost, and there will be Incremental Revenue also. It's not that, you know, we will be in this year coming into a positive zone at any point of time. We have considered both these things. We have already burnt out almost INR 10 crores.
INR 10 crores.
Yeah. We might, you know, burn out around INR 8 crores more in this year, roughly, and reach INR 18 crores-INR 20 crores of total sales. We are quite sure that from next year we are not burning any more.
Okay. Sure. Thank you.
Thank you.
Thank you. Ladies and gentlemen, if you have any questions, please enter star and one. We have a question from the line of Mahesh Vyas from UTI Mutual Fund. Please go ahead.
Yeah. Just one question. What is the payback period we are expecting for this Oaknet acquisition?
Yeah. Hi, Mahesh. We don't look at simple payback. We look at IRR on our investment when we go into it. Any investment that has more than 30% IRR, we you know consider it as a good investment in our system. I think with the Oaknet acquisition ramping up, you know better than expected, I think all I can say is that the IRR of the deal will be far better than what we you know had expected going in.
Okay.
Thank you. Participants, if you wish to ask any questions, please enter star and one. Ladies and gentlemen, if you wish to ask any questions at this moment, please enter star and one on your phone. As there are no further questions, I would now like to hand the conference over to Mr. V. Krishnak umar for closing comments.
Thank you all for your participation in the call. By way of summary, the Oaknet Business acquired in May 2022 is emerging as a success story for us in value creation through M&A. Through the deployment of various execution and growth levers, we see this business delivering an EBITDA of INR 50 crores this financial year, which is one full year ahead of expectation when we went into the deal. As per AWACS, Eris has grown at 19.3% in quarter two versus the market growth of 13%. For the first half of this year, Eris has grown at 13.6% versus the market growth of 7.4%. We have entered an era where we have clear visibility on secular growth in our Cardiometabolic Segment and our three emerging therapies over the next three years.
We will continue pursuing growth opportunities in these segments through multiple levers, including new products, expansion of doctor coverage, and inorganic expansion. Eris delivered a Q2 Consolidated revenue of INR 461 crores with an EBITDA of INR 151 crores and a PAT of INR 119 crores. For the first half of this year, Eris delivered a Consolidated Revenue of INR 859 crores, EBITDA of INR 281 crores, and profit after Tax of INR 212 crores. For this financial year 2023, we are targeting a Consolidated Revenue Growth of 30% and a Consolidated EBITDA growth of 16%-17%, including Oaknet. Thank you. I wish all of you and your loved ones a safe and happy Diwali.
Thank you very much. On behalf of Eris Lifesciences, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.