Ladies and gentlemen, good day, and welcome to Piramal Pharma Limited Q1 FY25 earnings conference call. 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. Gagan Borana from Piramal Pharma Limited. Thank you, and over to you.
Thank you. Good evening, everyone. I welcome you all to our post-results earnings conference call to discuss our Q1 FY25 results. Our results material has been uploaded on our website, and you may like to download and refer them during our discussion. The discussion today may include some forward-looking statements, and these must be viewed in conjunction with the risks that our business faces. On the call today, we have with us Ms. Nandini Piramal, Chairperson, Piramal Pharma, Mr. Peter DeYoung, CEO, Global Pharma, and Mr. Vivek Valsaraj, CFO of our company. With that, I would like to hand over to Ms. Nandini Piramal to share her thoughts.
Good day, everyone, and thank you for joining us on our post-results earnings call. We have had a good start to the financial year with a steady all-around performance. We registered a healthy revenue growth of 12% during the quarter, driven by continued strong momentum in our CDMO business, which delivered 18% year-on-year growth and steady double-digit growth in our India consumer healthcare business. Our EBITDA for the quarter also grew at 31% year-on-year, with an EBITDA margin of 11% versus 10% in quarter 1 FY 2024. This is a result of a continuous and ongoing effort towards cost optimization through increased process efficiency, yield improvements, superior product mix, and better product procurement and supply chain strategies.
Our net debt-to-EBITDA ratio continued to be under 3, with 2.8x at the end of this quarter, compared to 5x at the end of quarter one FY 2024 and 2.9x in the previous quarter. On quality and compliance, we successfully maintained our best-in-class track record of 0 OAI since 2011. This quarter as well, we successfully closed the U.S. FDA inspection at our Lexington facility with an EIR. Also, at our Ahmedabad formulation development facility, we successfully cleared the U.S. FDA audit with 0 observations, thereby becoming a U.S. FDA-approved site for analytical services. On the sustainability front, we're taking significant strides to integrate sustainability into our operations.
We're taking multiple initiatives in the areas of climate change management, water and waste management, conservation of biodiversity, promoting gender diversity, ensuring a safe operating environment, delivering quality products and services, and enhancing the quality of life of the communities around us. Our efforts were recognized in the third edition of the Times Now Global Sustainable Organizations of 2024, where we were honored as one of the top sustainable organizations in India. Moving on to business-specific highlights. Our CDMO business delivered yet another quarter of robust year-on-year revenue growth. Over the last five quarters, our CDMO business has delivered a healthy growth driven by steady order inflows and strong execution.
Backed by targeted business development efforts, we continue to receive a steady inflow of new orders, primarily for commercial manufacturing of on-patent molecules, which has increased the contribution of innovation-related work to about 50% of our CDMO revenues, compared to 35% five years back. Orders for early-stage development continue to come at a gradual pace as well as we await the full recovery in biotech funding. However, we are seeing some early signs of recovery in biotech funding with an increase in customer inquiries and visits, especially for differentiated offerings. We would observe the trend for a few more months before establishing a complete recovery in biotech funding. Our generic API business also witnessed a pickup in demand during the quarter.
Led by strong revenue recovery in the CDMO revenues in the recent past, along with continuous efforts towards cost optimization and operational excellence initiatives, we have seen a meaningful improvement in the profitability of the business. We intend to further take it higher over the medium term to increase capacity utilization and higher contribution from differentiated offerings and with innovation-related work. We continue to make calibrated investments in our CDMO business, which are geared towards customer references to integrated services, especially in differentiated areas of ADCs, peptides, and on-patent API development and manufacturing. Recent changes in regulations, along with the need for supply chain diversification, are expected to provide medium to long-term growth opportunities for the CDMO company, and we're preparing to capitalize on the same. Moving on to our complex hospital generics.
We are seeing a strong demand for ciprofloxacin and moxifloxacin in the U.S. and emerging markets like Asia, Europe, and rest of world. However, the healthy volume growth was offset by the lower price of ciprofloxacin in the U.S. market. Our expansion plans for setting up new manufacturing lines for ciprofloxacin in our India facility at Digwal, increasing KSM manufacturing capacity at other sites are on track. These are strategic expansions to capture growing demands for sevoflurane and increase our penetration in the rest of world market. We expect these expansions to operationalize in FY26. In the intrathecal segment, the sales of Gablofen were boosted by onboarding new customers. We continue to maintain our market-leading position in the intrathecal Gablofen market in the U.S., with over 70% market share.
In the injectable pain management segment, our growth in the past few quarters was affected by supply constraints and our CMO, which are showing some positive traction. We're continuously working towards improving our supplies and thereby strengthening the performance of this business. Going forward, we're looking to build a pipeline with limited competition specialty products through investments in R&D and in-house product development capabilities. We'd also be exploring new licensing deals to bring differentiated products to market and leverage extensive distribution network. These new products will not only help us drive growth in our CHG business, but will also help us reduce our dependence on sevoflurane. Moving on to our India consumer healthcare business. Our ICH business continues to deliver steady double-digit revenue growth. This is primarily led by new product launches and growth in our power brands.
We launched seven new products and 10 new SKUs during the quarter. This includes the launch of our brand, Bohem, catering to the men's grooming segment. We continue to invest in media and trade spends to boost the growth of our power brands. This quarter, we added Cir, a geriatric care brand, to the list of power brands that based on encouraging response received in the first year of its national launch. Power brands now includes Little's, Lacto Calamine, Polycrol, Tetmosol, i-range, and CIR. Our power brands grew 19% during the year and contributed 48% of total consumer healthcare sales. Our key brands, such as Lacto Calamine, Little's, and Tetmosol, delivered a healthy double-digit growth rate in quarter 1 at FY25, while the growth of the i-range was impacted due to it being both under price control.
Our sales and e-commerce platforms continue to show formidable growth, growing at 37% year-on-year during the quarter and contributing to 19% of the ICH sales versus 15% in quarter one, FY 2024. Summarizing the performance, I'm very pleased with the overall performance during the quarter and reiterate our FY 2025 guidance of early teens year-on-year growth in revenue and absolute EBITDA with a meaningful increase in that. I'm optimistic about the market opportunities in all three lines of business, and believe our timely investment in people, capabilities, and capacities places us well to capture them. Our ongoing efforts towards better profitability, maintaining a best-in-class quality track record, and integrating sustainability in our operations continues as we commit to deliver value for all our stakeholders. With this, I'd like to now open the floor for the Q&A.
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. We'll take our first question from the line of Sajal Kapoor, a retail investor. Please go ahead.
Yeah, hi. Thanks for the opportunity. I have two questions, please. First, the process of rebalancing the supply chain after COVID has been ongoing. However, has Biosecure significantly altered the tone in the innovator boardrooms? I mean, are we witnessing a rise in customer orders and the initial order placement for, you know, the pilot scale development projects, which kind of logically suggests that innovators are interested in us, but they also need to gain confidence in our capability, and hence they initially only award a small pilot scale development work before awarding the commercial contract. So has any of this been happening in your experience as well? That's my first question. Thank you.
So, thank you for your question. This topic has been top of mind for many of our innovator customers. The issue started to develop at the beginning of the calendar year, and it's become much more prominent as the bill, the potential bill, has progressed through the legislative channels. Just as one indicator of interest, we have a customer advisory board, and we had such a meeting in June, where we had the customers actually ask us two weeks before we needed to change the topic to this topic. So I would say that based off of our interactions, many of our innovator customers are seriously considering how best to address this potential change in what they can do and how they can do it.
Many of them are evaluating options and choices, and that often results in inquiries, visits, audits, RFPs, and we are seeing increased activity across this set of dimensions. We have capacity available to support our customers, either in the West or in the East, or both, depending on their requirements. And we've seen some early modest decisions. But in terms of material decisions, I think they're all still pending, at least for the customers that are making choices and evaluating options with us.
That's very helpful, Peter, thank you. And my next question is, do you think that the net cash from operating activities over this year and next, after adjusting for working capital and debt servicing, although we have been reducing the debt and there is still a sizable amount of debt on the balance sheet, which needs to be serviced through the operating cash flow, is this cash this year and next that we'll be generating kind of sufficient to support the growth aspirations of CDMO to capture a fair share of this supply chain rebalancing, as well as fund the growth for our complex hospital generics business, as well as India consumer business, and of course, the ongoing need for additional investment in Yapan Bio?
There's a lot of cash requirements across our network globally and the businesses. The question really is, is our operating cash flow good enough to kind of fund all these aspirations? Thank you.
So Sajal, thanks for the question. As you must have seen over a period of time, we have gradually brought down the overall debt on the balance sheet and made it more sustainable. If you look at the debt-to-EBITDA ratio, currently it stands less than three. Our consumer product business actually funds itself, so to that extent, there is no need of any further external funding that we need to put in. Between CDMO and our complex hospital generics business, we should be able to manage this through our internal accruals. I think, over a period of time, depending upon how needs emerge, we will balance the internal accruals as well as our investments accordingly.
That, that's helpful, Gagan. If I could squeeze one last, Piramal Pharma has a unique positioning, because we are present globally, so we have got reactors, we have got resources on UK soil, as well as in the US and, of course, India. Do you guys believe that this gives Piramal Pharma an edge or an advantage over some of the Indian companies that are not having presence, physical presence that is, outside India? And what I mean by physical presence, I mean development and manufacturing capability, not just the marketing presence. Thank you.
I do think, some of our customers like to have, onshore presence for wherever they are situated, because it helps with time zones, where they quite often will come to our site to see, to see the product being manufactured or developed. And especially in development, there's a lot of close, collaboration with scientists, so they do actually like that onshore. And, I do think the US also gives us an opportunity, for example, to even get work from India. I'll give you an example of a customer. We kind of signed a project, and they were like, "Okay, we want to sign it, but we can't start for another six months, because we're waiting on some raw materials, because those are late." And we said, "Well, what are the raw materials?
Can we actually make them for you?" They actually then came to our facility. That wouldn't have happened if we hadn't had the U.S. signing. They may. They may not have ever heard about this one facility. Just that one example.
That's wonderful, Nandini. Thank you so much, and all the best. Thank you.
Thank you. We have our next question from the line of Abdulkader Puranwala from ICICI Securities. Please go ahead.
Yeah, hi, and thank you for the opportunity. My first question is on, basically on, the order inflow, you know, what you would have for the CDMO business. Could you provide us some color as to, you know, directionally, how the movement has been?
Consider that we at this same date this year versus last year, we feel that we're in a meaningfully better position of full year revenue coverage from POs and revenue booked and high potential, in comparison to where we were at the same date last year. And so we feel that that gives us comfort in the guidance that Nandini mentioned at the beginning of the call.
Sure. Got it. And my next question is on the complex hospital generic business. So when we talk about some price erosion, could you please quantify the impact, you know, and in terms of the incremental growth, so is that coming from the U.S. market, or that's largely led by the emerging markets and Europe?
I don't think we've quantified the volume price mix of individual products in the CHG, but there was a price reduction from one contract in the U.S. that happened in the second half of last year, and that's what's showing up in the first half of, or the first quarter this year on a rolling basis. If you look at the volume growth, given that most of the contracts in the U.S. are somewhat stable, while there's some modest movements, most of the volume growth has been ex-U.S., which would be a combination of, Europe and ROW.
Got it, sir. And one final question on the consumer health business. So, you know, if I looked at the presentation, you mentioned that the power brands has grown at close to 19%, and it accounts for 48% of the revenue. So which, you know, which kind of specifies that the growth in the balance portfolio was little subdued. So, you know, could you please help us understand what are the efforts taken for boosting growth? And when we talk about the promotional expenses, how evenly is that getting distributed?
... So for in advertising and promotion, it's pretty much going all to the power brand, and that's what we expect them to grow, continue, to continue. The other brands are actually more on sustain mode, and that's what we're going to do. That's what we're doing going forward as well.
Got it. Thank you.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. Next question is from the line of Surbhi from Nuvama Wealth. Please go ahead. One moment, please. Ms. Surbhi?
Yeah.
Go ahead with your question, please.
Yeah. I have two questions. One, I wanted to know what kind of utilization levels are we seeing in the US plant. I believe we were at 40%-45%. And also, employee cost as a percentage of sales is at 30% currently, so is that kind of the new run rate going forward?
So, Surbhi, first on the capacity utilization, we have higher level of capacity available in our drug products towards those drug substances. And as you're aware, we have done investments to create capacities for all differentiated offerings wherever our capacities were short. It's difficult to give one percentage number when you're dealing in different kind of capabilities across formulations, APIs, and related capabilities. So, in term-
Sorry, we are not able to hear you. Surbhi, are you online?
Yeah, yeah, I'm online. I just wanted to know, is it directionally higher?
One moment. Is the management team connected? Because I'm getting a blank. Surbhi, I request you to stay connected, please. Ladies and gentlemen, ladies and gentlemen, please stay connected while we reconnect the management team. Ladies and gentlemen, we have the management team back on call. Surbhi, you may please proceed.
Sorry, I missed the last part of the answer, but I just more than a percentage I was looking for, is it directionally higher than what we were, say, last financial year?
Yes. So Surbhi, for this particular quarter, there is a little bit of unevenness, and I wouldn't say that is the indicator of how it will be in subsequent quarters. The guidance that we had given over for a full year was a high-teen growth in our OpEx, and that's how it will be. So please don't consider this as a run rate. And as a percentage of turnover, obviously, because we've got higher revenues coming up in H2, you will see the percentage of the staff as a percentage of turnover going down subsequently.
Okay, got it. Thank you so much. Thank you.
Thank you. We have our next question from the line of Sanjaya Satapathy from Ampersand. Please go ahead.
Yes, good. Thank you a lot for the opportunity, and congratulations for starting the year on a good note, with the margin expansion. We heard that your order book position also looks better this year compared to last year. So considering all this, are you looking to upgrade your guidance that you had given at the beginning of the year?
So, Sanjaya, at this point in time, we maintain the guidance that we had already given. We are not looking for an upgrade right now.
Understood. And is it because you are looking at some kind of execution challenges or any particular?
No, no such thing. Over a period of time, we'll have to see how the year progresses. Currently, of course, we had certain, higher front loading, which happened, but we'll have to see how this evens out over a period of time. So no change in the guidance for now.
We also want to continue to balance the quarter.
I'm sorry, ma'am, can you come closer to the phone, please?
We'd also like to balance the quarter, so it's not so uneven, and that's something that we're working on.
So how will that be done, ma'am, considering the nature? Are you saying that the 50/40, 55/45 split will change going forward?
I think it's... Last year there was a very last quarter four was much, much bigger.
... While I don't expect the split to change, but as in H1, H2, but I do expect a little more balancing across the quarter.
Understood. And, other thing that I just wanted to check on that, the CHG business on which you were planning to allocate some one-time expense this year, for the incursion in non-U.S., non-regulated markets. Was there any such expense this quarter as well? And, how is the guidance from that for the rest of the year?
If I've heard you correctly, you're referring to certain one-off expenses in our complex hospital generic business, which we had spoken in the previous quarter. A very small portion of that has been spent, and the remainder should possibly come up in the subsequent quarters.
Understood. Understood. And last thing on the CHG, the pricing issue, which you had seen in the last year's second half, generally, considering that the volumes have started improving, is there any sense that we're getting in terms of price kind of moving back up?
We don't anticipate price to be increasing generally in generics. There may be a few isolated cases with some of our smaller, injectable products, where there may be some market dislocation, but there may be some possibility that these would be not so large products in our portfolio. The large products in our portfolio, generally prices stay flat or go down, because there are multiple options available, although they do go down at a more modest rate than other generic categories. So we see this as reasonably stable, and you would see the year-on-year price decline driven by actions that happened last year, second half, and we don't see any major changes any time.
Understood. Thank you.
Thank you. Next question is from the line of Devang Shah from BD Enterprise. Please go ahead.
Yeah, hi. My one question is simple. Like, three years back, when this company was with the Piramal Enterprises, company was growing very good. After that, we didn't understood what actually happened, like, we are in the loss also. And as well as the... You can check out, like, we can check out the debtors days, cash conversion cycle, everything has gone upside down. So don't understand the thing, like, what the company is currently doing and what, what are the targets? So is what it, like, the whole numbers or the other, everythings which was looking very fancy, has been hidden inside the Piramal Enterprises? Or it's after that, like, something has gone totally wrong. Like, I'm not understanding the thing, like, currently also company is not in the net profits.
So, Devang, if you look at our trend across the years, quarter one for us is always the lowest quarter.
Okay.
If you see, even in the last four, five years, you would have seen that quarter one, we have actually made a loss. Because the way our entire deliveries are scheduled, it picks up in quarter two and quarter three, and then peaks towards quarter four. That's been the historical trend, and you can pick up any year over the last few years, you will see a similar trend. Talking about the turnaround, as you are aware, that during the pandemic period, some of our businesses were impacted, and that was followed by impact on account of the biotech funding crisis and the geopolitical situation.
But having said that, in the last year, FY 2024, if you've seen the numbers, you would have seen that there has been a meaningful turnaround, both in the top line, improvement in EBITDA, as well as improvement in the operating margin, reduction in debt, and, meaningful reduction, in the overall operating expenses and improvement in PAT margin. So it's all moving in the right direction, and, as you must have heard in the opening comments from Nandini, quarter one has also begun this year on a good note. So, we look forward, and we are optimistic about the potential of each of our businesses, and are working towards ensuring that they all move towards their respective paths of success.
I think so, operating profit margin is 12%. So on 12%, we are expecting, like, like, it cannot move in one or two years to 20%, right? 14% OPM, how can anybody can expect any, everything will go wrong? And if the numbers are coming at really very good, right, then how is it possible? Like, I'm not understanding, then why the company has to take the debt?
So, Devang-
You have the cash also on the books, you have the resources also there, and there is the same, at the same rate, the liability has also increased. Is the money you are getting it at very cheap, so you are just borrowing out there? Or you are just taking up the results, like you cannot utilize the same funds?
Devang, as far as quarter one margins are concerned, as I alluded to, quarter one is the smallest quarter for us. Therefore, operating margin tends to be lower here, and it progressively increases as our revenue goes up in the future. And with respect-
Quarter one margin... Sorry, but quarter one margin is 10% OPM. I'm talking for 14%, which is quarter two and quarter three. So at 14% OPM, are you thinking that it's a good one?
As we've alluded to, Devang, our intent is obviously to increase our operating margins progressively across the period, and we believe that we have a pathway to be able to accomplish that. Also to respond to your question on debt, our debt has largely been towards doing acquisitions and CapEx, all of which are growth-oriented, and they have been done in areas where we believe we have the highest potential for growth.
... Okay, so can we expect higher team-
Mr. Shah?
Sorry, it's, it's a minor question only. It's like, can we grow by higher team numbers, 18%+ OPM within the next year? Is the management confident for that?
So, Viren, at this point, we are not giving a guidance for the next year. But as we said, on a longer term, our intent is to obviously improve and enhance our margins, and we've given that indication before as well.
That's fine. Thank you very much. Thank you very much.
Thank you. We have our next question from the line of Yash Dharak from RSP Ventures. Please go ahead.
Hi. Thank you for the opportunity. I just had one question regarding our debt. While we understand that the net debt number has reduced significantly, and it's now less than three, however, the same is not being reflected in the interest expense line item in the PNL. Could you just share us some guidance on that? When will that line item reflect and reduce net debt position?
So Yash, two things happened. So while our overall debt reduced, especially post the rights issue, the interest rates went up. So, as you're aware, most of our debt, which is linked to several benchmarks, whether it's the SOFR or whether it's the LIBOR, all of these rates actually went up anywhere between 9%-17% in the last 12 months. And therefore, while the average borrowing is lower, the interest, increase in interest rates has kind of offset some of the benefits. But we are hopeful that once interest rates start reducing, you will see the benefit of that trickling. If you see the, overall interest cost in this quarter as well, you'll notice that there is a reduction in the interest cost in absolute value.
Okay, understood. Second question was regarding the tax. The tax amount for this quarter seems to be high, so do you expect this to be evened out for the entire year?
That's right, Yash. So, you know, some of our overseas entities have a meaningfully higher skew of profitability in H2 over H1. The provisioning of tax that you see in this quarter is at the standard rate in profitable entities, whether it's India or US. And you will see this balance off progressively as revenues and profitability in our overseas sites start increasing.
Okay, understood. So we can safely assume 50% tax rate for the full year, right?
Yeah, fairly in line with what we've guided for.
Okay, thank you.
Thank you. We have our next question from the line of Vinod Jain from WF Advisors. Please go ahead.
Yeah, thank you.
... Sir, can you use your handset mode, please?
Yeah. Thank you. My question is basically answered. It was related to direct tax. But the long-term view on taxation at 50%, why is it on the higher side if corporate tax rates are lower?
So, Mr. Jain, I, as I alluded to, that, the tax rate currently appears vitiated because profitability in some of our overseas entities currently is lower than what it should actually be, or they are, in the negative right now. As the profitability in these entities increase, you will progressively see a reduction in the effective tax rate. Having said that, in all jurisdictions, wherever we are profitable, we pay tax at the standard rate.
The long-term average rate could be around 50%?
No, it will progressively reduce as the profitability increase.
Okay. Thank you.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. We have a question from the line of Abdulkader Puranwala from ICICI Securities. Please go ahead.
Yeah. Hi, thanks for the follow-up. Just on the ADC segment. So, you know, several quarters back, we have highlighted that we have suitability, so for this particular segment. Any color as to, you know, what level of engagement we are having with clients, and do we see some order commitments also coming up in the near term?
Regarding ADC orders?
Yes.
Hi. So we do see significant interest in this segment from clients and potential clients. We have also noticed that the interest in across what we do in conjugation, linker payload, MAbs, TFF, and fill finish in Lexington. That said, we have noticed that of all our offerings, this is the longer sales cycle for our client to decide due to the complexity. And then once they decide, it's the longer from PO to revenue cycle because of the supply chain lead times vis-à-vis the other offerings in our network. So we remain quite confident in the overall underlying demand for this segment. We remain excited about the level of customer engagement on potential projects and some recent signings, but the translation from idea to revenue is longer for this differentiated offering than some of our other ones.
We would say, watch this space. We're excited. We hope to share in the future with you.
Sure. Got it. And lastly, on the, you know, CapEx, what we had planned for complex hospital generics segment, where we had planned to add some line at The Hague and other plants. So, I mean, where are we in this capacity expansion, and by when would this added capacity come up?
So we are making substantial progress on that, those two projects that you described and that we communicated earlier. Right now, we would say that it's still on track. We have no reason to believe anything other than it will happen the way we described, and what we had communicated and what we will continue to reaffirm, which would be this will be an FY26 benefit.
... Sure. And finally, on the men's grooming brands what you have acquired, I mean, could you just help us understand what the potential market here is? And, you know, can any of those become one of your existing or part of your existing power brands?
I think we've launched them. They are our own products, they're not acquired. We hope that they can eventually become part of our power brand. I think we've launched them on e-commerce only. We will see the response on it, and once it gets to a certain scale, we will take that offline and onto the general trade.
Got it. Thank you, and wish you all the best.
Thank you.
Thank you. We have our next question from the line of Kashish Thakur from Elara Capital. Please go ahead.
Hi, thank you for the opportunity. I just wanted to know the breakup in the CDMO segment. So, what percentage of revenue might be from the innovator business and what percentage from the development?
The two are... So of the innovator business, overall it's 50%, so that includes about, it includes discovery as well as development, as well as on-patent commercial.
Understood. And the second is towards the complex hospital generics. How many products are we planning to launch in FY 25?
So currently we have 5 of them approved, and there are about 17 in the pipeline, in various stages of approval.
Any, like, expected or any approvals expected in this year?
Yeah. It's difficult to communicate that specifically in terms of how many of them would actually get approved this year.
Understood. Understood. And, yeah, so what will be our guidance towards the power segment, sorry, power brands for FY25? How do we target it? Like, what do we look by the end of FY25 power brands contributing to us?
I think we'll think that they will grow the overall business, but I don't think we wanna say a specific number.
Understood. Understood. Thank you. Thank you. That's all from my end.
Thank you. We have our next question from the line of Kunal Tokas from Fair Value Capital. Please go ahead.
Hello, am I, am I audible?
Yes, you are.
So just two quick questions. First, if you could, give...
Mr. Tokas, sorry, you're audible, but it is not clear. Can you use your handset mode, please?
What about now?
Yes.
Yes, that's better. Thank you.
Thank you. Just two quick questions. First, if you can give the share that new products in your CHG business contribute to revenue?
I think new products would be not... They would be quite small.
Modest.
Modest.
All right. If I look at the advertisement spends, earlier they used to be 18%-20%, but as mentioned in the PPT, that it was 13% for the quarter. So is it because we are focused more on profitability now or and therefore reducing the spends or anything else?
I think the IT business has grown faster than the market, but we are also focusing on profitable growth.
All right. Thank you. Have a good day.
Thank you.
Thank you. Participants who wish to ask a question are requested to press Star and One on their phone now. We have a question from the line of Anil Kumar, an individual investor. Please go ahead.
Hi, ma'am. Thanks a lot for the opportunity. First of all, congratulations on the good set of numbers. You are gradually improving. My two questions, maybe I missed the initial commentary. The YOY increase in CHG business was just 2%. What are the reasons for that? And secondly, we have the joint venture Allergan not being that strategic. Do you have any plans to improve that further or to sell it down to reduce some of the debt? And also, thirdly, I think you have some case going on with anti-dumping duties on Vitamin A. Where are we with that? Thank you.
Okay. So firstly, on the complex hospital generics, while we had seen good volume growth during the period, the average realizations have been lower, as we alluded to. And also, we had some difficulty in getting some of the products from a third-party CMO because of which our growth was subdued during the quarter. Secondly, with respect to the Allergan joint venture, we are very much, it's now AbbVie Therapeutics India Private Limited. We are very much committed to this JV and believe that it has the potential and prospects to grow further, and therefore, actively work to ensure that this JV also is able to scale to its fullest potential. Sorry, did I miss the third question?
...
On the anti-dumping duty application, it's currently under process, and we await outcome for that. We have done the filings. We are awaiting the outcome.
Thanks a lot. Good luck.
Thank you.
Thank you. Ladies and gentlemen, we'll take that as last question for today. I now hand the conference over to Mr. Gagan Borana for closing comments. Over to you.
Thank you very much. We appreciate you taking the time to join us for today's call. We hope we were able to answer most of your questions. In case any of your questions have remain unanswered, please feel free to reach out to me. Thank you.
Thank you. On behalf of Piramal Pharma Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.