Ladies and gentlemen, good day and welcome to Sun Pharma's Q3 and 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 call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Dr. Abhishek Sharma, Vice President and Head of Investor Relations and Strategic Projects. Thank you, and over to you, sir.
Thank you. Good evening and a warm welcome to our Third Quarter FY25 Earnings Call. I'm Abhishek from the Sun Pharma Investor Relations team. We hope you have received the Q3 financials and the press release that was sent out earlier in the day. These are also available on our website. We have with us Mr. Dilip Shanghvi, Chairman and Managing Director, Mr. C. S. Muralidharan, CFO, Mr. Abhay Gandhi, CEO North America, and Mr. Kirti Ganorkar, CEO India Business. Today, the team will provide an update on financial performance and business highlights for the quarter, pipeline updates, and respond to any questions that you may have. We will refer to the consolidated financials for management comments. The call recording and call transcript will also be put up on our website shortly.
The discussion today might include certain forward-looking statements, and these must be viewed in conjunction with the risks that our business faces. You are requested to ask questions in the initial round. I also request all of you to kindly send in your questions that may remain unanswered today. I will now hand over our call to our CFO, Mr. C. S. Muralidharan.
Welcome, and thank you for joining us for this Earnings Call after the announcement of Financial Results for the Third Quarter FY25. Our Q3 financials are already with you. As usual, we will look at key consolidated financials. Q3 FY25 sales were at INR 134,369 million, an increase of 10.5% versus Q3 FY24. Besides the underlying business growth, we also had milestone income in ROW in Q3. Ex-milestones overall sales growth is 8.9%. Material cost stands at 20.4% of sales, lower than the same period last year on account of milestone income as well as better product mix, including higher specialty sales. Staff cost stands at 19% of sales. Other expenses were at 31.2% of sales, lower year-on-year on account of lower R&D and lower selling and distribution expenses. Other expenses are also lower quarter-on-quarter in absolute terms on account of lower selling and distribution expenses.
ForEx loss for the quarter was INR 1,834 million compared to gain of INR 1,246 million same period last year. EBITDA, including other operating revenues, was at INR 40,090 million for Q3, an increase of 15.3% over Q3 last year, with EBITDA margins for the quarter at 29.3% against 28.1% for Q3 FY24 and 29.6% for Q2 FY25. We had an exceptional item in Q3 FY25 amounting to INR 3,162 million. This relates to in-principle agreement of a settlement with certain plaintiffs in the U.S. in the opioid litigation. Adjusted net profit, excluding exceptional items for Q3 FY25, was INR 32,196 million, representing a growth of 24.1% over Q3 FY24. Reported net profit for Q3 FY25 stands at INR 29,034 million as against reported net profit of INR 25,238 million Q3 FY24. The effective tax rate for Q3 FY25 was 14.7%. EPS for the quarter was INR 13.4 per share.
As of 31st December 2024, net cash was $3 billion at the consolidated level. Now we'll discuss the nine-month performance. For the nine months, gross sales were at INR 392,257 million, a growth of 9.1% over last year. Material cost for nine months was at 20.7% of sales, lower than nine months last year, mainly due to product mix, including higher specialty sales. Staff cost stands at 19.1% of sales. Other expenses were at 31.5% of sales, higher than nine months last year on account of higher selling and distribution expenses. ForEx loss for nine months was INR 1057 million compared to gain of INR 925 million for the same period last year. EBITDA for nine months was at INR 115,556 million, a growth of 15.7% over the nine months last year, with resultant EBITDA margins of 29.2%. Adjusted net profit for the nine-month period was at INR 90,953 million, up 24.3%.
Reported net profit for nine months was at INR 87,792 million compared to INR 69,218 million the same period last year. The board has declared an interim dividend of INR 10.50 per share for the year FY25 against INR 8.50 per share interim dividend for the previous year. I now hand over to Mr. Kirti, who will share the performance of our India business.
Thank you, Murali. I shall take you through the performance of our India business. For Q3, the sales of formulation in India were INR 43,004 million, recording a growth of 13.8% over Q3 last year. India formulation sales accounted for 32% of total consolidated sales for the quarter. Sun Pharma is ranked number one and holds 8.2% market share in the INR 2,214 billion Indian pharmaceutical market as per AIOCD AWACS December 2024. Corresponding market share for the previous period was 7.8%. For the quarter ending December 2024, we grew higher than IPM, and we have done well across all major represented therapy areas. A majority of Sun's growth continues to be led by volumes and new products launches versus IPM growth, which is predominantly price-led. As per SMSRC July-October 2024 report, we continue to be number one ranked company based on the prescription volume.
Sun Pharma is also ranked number one by prescription with 12 different doctor categories. For Q3 FY25, the company launched 12 new products in India. Now I will hand over call to Abhay.
Thank you, Kirti. I will update on the performance highlights of our US businesses. For Q3, our overall sales in the US business were down by about 1% over Q3 last year, to $474 million. The US accounted for over 30% of consolidated sales for the quarter. The growth in the specialty business offset the decline in the generics business. We had lower sales of temozolomide in Q3 versus Q2, contributing to the QOQ drop. The US specialty business has continued to do well. The underlying business and the prescription trend for our key growth brands, including Ilumya, Cequa, Odomzo, and Winlevi, remains strong. For Q3, we launched four generic products in the US. I will now hand over the call to Mr. Shanghvi.
Thank you, Abhay. I will now provide an update on the performance highlights of our other businesses, as well as give you an update on our R&D initiatives. Our revenue in emerging markets were at $277 million, up by 10.1% over Q3 last year. The underlying growth in constant currency terms was 14% year-on-year for Q3. All our major markets have done well in local currency terms. Emerging markets accounted for 17% of total consolidated revenue for Q3. Formulation revenues in the rest of the world were $259 million, higher by 21% over Q3 2024, and ROW markets accounted for approximately 16.3% of consolidated Q3 revenues. We continue to invest in building an R&D pipeline for both our generics business as well as specialty business. The consolidated investment towards R&D for Q3 2025 stands at INR 8,450 million, 6.3% of sales.
Specialty R&D accounted for 41% of our total R&D spend for the quarter. Because of delay in our clinical spends, our R&D expenditure is trending below our guidance for the full year. We now expect FY25 R&D spend to be less than 7% of our sales. Moving on to update on global specialty, Q3 FY25, our global specialty sales were up by 24.8% to reach $370 million. With this, I would like to leave the floor open for questions. Thank you.
Thank you very much. We will now begin the Q&A session. Anyone who wishes to ask questions, may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask questions, please press star and one. The first question is from Kunal Damesha from Macquarie. Please go ahead.
Hi, good evening, and congratulations on a good set of numbers. The first question, if I look at our recent specialty deals, these are basically emerging in new therapeutic areas, diverging from our current focus on derma, derma onco, and novel. So could you clarify whether this shift represents a strategic change, or these are more opportunistic in nature? How should we think about it?
No, I think in our view, they are adjacencies, but at the same point of time, have linkage with dermo-onco. And the specialty, even though a little bit different from the one which we will need to focus on, will not require a large field force for us to create as a new team. So we will remain opportunistic, but the focus on dermatology and ophthalmology will continue.
Sure, sir. Thank you on that. And the second question is on the specialty growth, which has been quite strong for us, and we have highlighted that Ilumya, Cequa, Winlevi, and Odomzo have delivered. But apart from that, would you say some seasonal products like Levulan also helped us in this quarter? And if yes, how are the trends playing out in the ongoing quarter?
So the growth in specialty, whether looked at quarter-on-quarter, year-on-year, has come from both U.S. and ex-U.S. markets. It's similar dollar contribution for both the markets. In ex-U.S., some inventory buildup there with the partner this quarter. I'll now request Abhay to give more color on the U.S.
I think you said it rightly that it's a seasonal impact in Q3, which is typically our strongest quarter. I think if you look at it on an annual basis, the underlying business will continue to do well.
Sure, sir. Thank you. I have more questions. I'll join back to Q.
Thank you. Next question is from Shashank Krishnakumar from Emkay Global Financial Services. Please go ahead.
Hi, thanks for taking my question. My first one was on the Antibe acquisition. I just wanted to check. I think the company's lead drug was placed under a clinical hold sometime in March last year. So has that hold been subsequently lifted by the FDA?
No, I think FDA is expecting us to do some further studies and submit to them for them to evaluate the lift of clinical hold. So we believe that this is an interesting asset, which then can help us not only in the U.S., but also in the current global environment where for treatment of pain, opiates are avoided. So it's a good opportunity.
Got it. Thank you, sir. My second question was on the ex-Taro, ex-Revlimid generic business, so while I think you alluded to the Revlimid decline QOQ, but has there also been a meaningful decline sequentially in the ex-Taro, ex-Revlimid piece as well?
While Abhay will answer this question, we don't talk about Taro separately, Shashank.
Yeah, so just looking for some qualitative comments.
Yeah, sure, sure, sure. Let Abhay answer the question.
ex-Revlimid, the decline is very remarkable.
Okay. Thank you. That's helpful. I'll join back to Q.
Thank you. Next question is from Binu Pathiparampil from Elara Capital. Please go ahead. Binu Pathiparampil, you may go ahead with the question. Let's move on then. Binu can rejoin.
Can you?
Oh, okay.
Yes, we can. Please go ahead.
Yeah. My first question is on Leqselvi. Any update on the litigation, what's happening, and what is our expected launch timeline?
So I think we expect the, what you call, oral arguments by sometime to begin sometime in April. And then post that, we'll await the judgment.
Okay. And even if the judgment is against us, the December launch timeline stays intact, is it?
No, I think it all depends on what judgment is, because if the, let's say, the judgment is to validate the existing judgment, then we can't launch till the time we get a more favorable judgment.
No, I asked because in our earlier call, you had mentioned that December patent under question is expiring, so you could launch after that.
No, I think that is the, what you call, validity of the patent. So in case of my understanding is that this patent is valid till December of 2026. So in case if the judgment is, what you call, not in our favor, and if we can't get a final judgment earlier than that, then we have to wait till December 2026. That's what was my statement.
Understood. Understood. A second question on your depreciation and amortization amount. The amount has not grown much last year also, and this year also for nine months, it's actually a bit little below last year's run rate. And if I look at your standalone depreciation amortization, it has actually substantially come down YOY as well. So could you let us, could you make us understand what's happening with that?
As per the consensus, if you're concerned, there are some assets getting capitalized late. Some assets are fully already depreciated. That's one of the reasons you see the fluctuation in the depreciation.
Okay. So the consolidated is likely to stay like this, not increase significantly unless we add some major assets in the coming years?
Yeah, unless CapEx progresses, depreciation will also increase.
Okay. And the standalone depreciation amortization has come down significantly, QOQ as well as for nine months, from almost INR 400 crores to INR 300 crores.
I think there are many entities which come through the consolidated numbers. It will be up to the consolidated depreciation rather than standalone.
Okay. Understood. Thank you. I'll join back.
Thank you. Next question is from Neha Manpuria from Bank of America. Please go ahead.
Yes, I can take my question. My first question is on the India business. We continue to see higher than industry growth for quite some time for some pharma. Where are we on MR productivity to sustain this rate of growth? Do we need to add more MR to maintain this growth? And is this all from the branded business, or some of this is also because we are entering into generics or OTC expansion? Just wanted to get some color on the 14% growth.
I think, as we have said in the past, majority of our business is a branded generic business. The trade business contribution is almost negligible to our business. So all the growth, what you are seeing, is coming from a branded generic business. And in terms of second question, if I understand correctly, you are asking about the field force. So we have already told in March 2024, our total field force was 14,000 people on the ground.
Any plans to expand that, sir?
At the end of the year, that is after quarter four, we will let you know about our expansion plans.
Okay. Got it. My second question is on the, Mr. Shanghvi. You mentioned that there's been delay in clinical trials because of which we are lowering the guidance. And that's been through the year. We've seen that guidance being lowered. What are the key reasons for the delay in the trials? And does this delay, because I don't see any delay in the data readouts for the pipeline, the milestone that we usually give out. So just wondering, is there some churn in the pipeline? What is this delay which is leading to lower R&D spend?
No, I think it's taken us a little bit longer to finalize the protocols. And then now we are waiting for the final bids as well as approvals so that the studies can start.
In that case, would there be a risk to some of these milestones that we've mentioned given there have been a few quarters of delay?
The milestones are, if we have to pay out. No, I think what we are now talking to the CRO is that how do we find a way to accelerate the study by both increasing the number of study sites as well as the number of countries in which we will do the study.
Okay. Got it. Understood. Thank you so much, sir.
Thank you.
Thank you. Next question is from Anubhav Agarwal from UBS. Please go ahead.
Hi. Good evening to all. First, a clarity on what Murali sir talked about. One, on the specialty side, when you said that sequentially half has come from ex-US and half has come from US, is that excluding licensing income, milestone income? So let's say, is that current on 286 going to 325? That has come half in the US, non-US, or you're talking about 286 going to 370?
It's roughly half, ex of milestone income. Roughly.
Okay. So we had a $40 million increase, so it's 2020, roughly. That's what you mean, right?
That's right.
Okay. Second question for Dilip Bhai is you made a comment that on the Canada asset, which is in the pain and inflammation space, you may look at it because it doesn't require large field force. Is this because it's a hospital product? And would that mean that you will be willing to look at more hospital products, or is this an exception?
No, we believe that if approved, this is a product that we can market not only in the U.S., but also in emerging market, where pain continues to be an important component of business, and we have field force which can handle these kind of products.
You mean you already have existing field force in EMs for this?
Correct. With this field force, already visits the doctors. So I think it's both the attractiveness of the product for the regulated as well as in emerging markets.
But for this product, largely, what will be the hospital? Is it like hospital usage will be like 70%, or is it 50%? What would it be?
Study usage will come to.
Yeah. No, I think what we are doing is we are trying to focus on, first of all, removing the clinical hold, and then identify the set of studies that will help us get to market the fastest. Most likely, what you are saying is what's going to happen is that the initial developed indication will be hospital indications.
Okay. And just if I can ask one more question, otherwise I can join. One comment I wanted to identify from you is that biosimilars now in the U.S., if increasingly moving towards interchangeability now, would you be interested now in looking at the space, or is it still a no-no for you?
Every quarter, we come back to this question. Hopefully, at some point, we'll take a decision internally. I'm not talking about investor calls, but internally. So I think for us, the question is, where do we allocate the R&D spend? Because we have a finite amount of money that we can invest in R&D. So specialty, generics, and the other we can also invest in creating a biosimilar pipeline.
Okay. Thank you very much.
Okay.
Thank you. Next question is from Binu Pathiparampil from Elara Capital. Please go ahead.
Thanks for taking my second question. It's about this milestone income and specialty. So last year also in Q3, you had this income. So is this something that we can expect every year going forward, depending on the extent of sales?
No, I think these are all achievement of certain sales milestones, so linked with achievement of sales milestones. So I think it's all a function of how well the product continues to do well and whether it touches the next milestone or not.
Okay. So nothing seasonal like in Q3 it comes?
No, no, no, no, no. Nothing.
Okay. Okay. And Dilip Bhai, one request of my concern, since you have become a very large specialty company now, all the large global specialty companies do give out the sales of individual products, at least the big ones. So it would be great if you can consider that.
No, I think, thank you for, first of all, considering us to be a large specialty company because that's something which we don't consider, but because a large part of our business currently still continues to be the branded generic and generic business, but I think, we will, our focus is to help investors understand both company's current performance and expected future performance in such a way that it also does not create unnecessary pressure on the company and the management. At the same time, investors have a visibility of our future trajectory, so if there is a need for us to relook at something, we will clearly relook at it, so thank you.
Thank you.
Thank you. Next question is from Suryanarayan Patra from PhillipCapital. Please go ahead.
Thanks for the opportunity. So in the opening remarks about the India business, you have talked about the lower distribution cost during this quarter, kind of a lowest distribution cost during the quarter. What is the reason for that? And also extended point on the India, you mentioned that the outperformance in the domestic growth against the IPM has been consistent, and that is largely driven by the new launches rather than the price-led rise in the IPM. So given that, is it fair to believe that this outperformance is likely to continue for the next few quarters since it is like new launch date?
I think what I said is the growth is coming from volume and new product. Both are contributing into the growth compared to IPM, where the growth is mostly price-led. That is what I said. So for future, it's difficult to predict, but our endeavor is always to grow higher than the market and try to gain market share. Yeah.
Okay. And regarding the lower distribution cost angle, you can address.
Abhay, you want to take that one?
I think the question was on distribution cost for India, Abhishek.
Abhishek, this opening commentary was indicating about lower distribution cost in this current quarter. So it would be a kind of a combined cost?
No, it's primarily on account of lower R&D expenses in the U.S. Last quarter, if you recall, we had incurred some pre-launch expenses on Winlevi, which have kind of minimized now.
Okay. Okay. My second question was about the change in the U.S. government and the kind of initiatives that isn't talked about, whether restricting about the direct-to-market initiatives or spends by specialty companies. That is one. And also the tariff, what it has been loosely talked about against anything that is imported into India, into U.S. So on those two aspects, what would be the stance of us, and how should we think those impacting us?
Okay. Mr. Patra, you have characterized this that I could have. It has been loosely talked about as of now. So we do not know what will be the final shape. You would also be aware that right now, there are confirmatory hearings on certain key appointees. It hasn't really fructified. The new appointees have not yet taken over their respective functions. So till we actually know certainly what are the actions being taken, it's difficult for us to plan in advance.
Sure. Okay. Just one more point, Dilip Bhai, about the consumer health business. See, in fact, having created a branded business across the geographies strongly, the consumer business, which has been a kind of old initiative of us, but it has been kind of not been highlighted the way it has been highlighted by other peers. So what is the current size and what is the outlook that you are having, and how progressively, or at what growth rate it is kind of moving on? If you can give some sense, and can it be a kind of a contributor to the overall growth of Sun Pharma going ahead?
So I think you have a visibility of our India consumer business. What I think you don't have visibility for, and we don't also highlight, is almost $200 million worth of consumer business that we have in our emerging market business, which is also OTC kind of products. So it continues to be an important component of our company and growth. Only thing is that since we handle this business more or less the same way like we handle the prescription business, we are not differentiating and sharing the numbers separately. But it continues to be an important component of our growth.
Thank you. We move to the next question. The next question is from Kunal Damesha from Macquarie. Please go ahead.
Thank you for the opportunity again. Can you please throw some more light on the inventory build-out that we had suggested as one of the specialty products at our partner end? I am under the impression that whatever we do at CSR generally through partner end, we just receive royalty in our revenue.
No, we also capture the product sales, no? And the product sales are lumpy.
This is the inventory build-out that we talked about.
And the partner. Yeah. So if partner buys something, then before he—so every time he buys a reasonably large amount, so he may not buy in the next quarter. That's why we are saying it's lumpy.
So basically, when he buys, it triggers royalty payment?
No, no. Royalty has to be paid independently when he sells. Sells, yeah. But when-
Let's say when Almirall buys, basically, does it go through?
I will get top line, and they will give us monthly statements based on which the royalty is paid. So it may be different arrangement with different partners.
Okay. Okay. Sure. And the second question, if I look at our specialty R&D now, there's a percentage of specialty revenue excluding milestones. It's coming out to be roughly around 12% of the specialty revenue. Right? So generally, what we have seen with the large innovative companies is typically around 16%, 17% gain. So how should we think about this going forward? Not just one quarter, but let's say over the next two, three years, how are we thinking about it?
I mean, that's the focus. And if we would have achieved our guidance, then that is what it would have reached.
Okay. Sure. And last one on the capital deployment, since we have a strong cash balance now, and I'm sure that we have been evaluating a lot of deals, but has there been any, let's say, change in the end market valuations that you see it has become more attractive, less attractive? The number of deals that we churn or we look at per year has increased, decreased. How should we think that?
No, I think we are open for looking at, I mean, we constantly look at and evaluate options. Anything which is strategic and we think it will add value to our existing business and is accretive is something that we seriously consider.
But would it be more like specialty, or you would also look at India business as well if you find that attractive or something in emerging market?
I think generally, priority is to focus on specialty products.
Sure. Thank you, and all the best.
Thank you.
Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. The next question is from Krish Mehta from Enam Holdings. Please go ahead.
Thank you for taking my question, and congratulations on a great set of numbers. Dilip Bhai, I just wanted to check with you on the Japanese portfolio and how we're doing, seeing that the mix of specialty has become almost 50/50 with U.S. and non-U.S. If you could just give some color on the specialty business in Japan as well as on the Novartis portfolio that we acquired almost over a decade ago now, how has that progressed in Japan?
No, first of all, we don't split the specialty in terms of giving numbers, but our focus is on growing the specialty business in Japan because the generic business has become very challenging in terms of pricing and overall attractiveness, so maybe, Kirti, you can respond. Yeah. Generic business, what you are referring to, Novartis long-listed brands, there is a price pressure. Every year, there is a price decrease ranging from 5% to 7% depending on the product, so our focus is to continue to grow Ilumya business. Ilumya, Cequa, the future pipeline also.
That's very helpful, and my second question was on the tax rate. If you could just provide some color on how you see this stabilizing as we also kind of the sunset benefits in some geographies, so how do you see a stable tax rate going forward?
So we have said in the past that the tax rate should be seen on an annual basis. In the last call, we also said that one of our facilities, the sunset clause was there, and it will inch up as we move a couple of quarters ahead.
Okay. Thank you so much.
Thank you. Next question is from Vivek Agarwal from Citigroup. Please go ahead.
Thanks for taking the question. My question is related to compliance issues. So how we should look at this year, 2025, as we have a few facilities down with the FDA? So what is the preparedness of the company, and are you expecting any facility going for the reinspection? Because I'm just trying to assess that what is the way forward to revive this business, which is, I think, down at historical lows at this point of time? Thank you.
Yeah. The idea is to, what we call, bring the facilities back in compliance because we, we will require new product to strengthen our ability to grow the business.
Okay, but are we expecting any of the facilities to undergo inspection this year, or have you made any kind of material changes that can improve the company's confidence level that you may be able to clear these facilities from here on?
I mean, that's the hope, and that's what we are all working for, is that we have invited the agency to inspect our Halol, but then when to inspect is a decision that they take, so.
Understood. And what about the other facilities in Mohali, Dadra? Have you invited, or are you in the process of inviting that team?
I think we have to first fulfill our CAPAs and whatever commitments we have given so that they can, when they reinspect, they can assess that whether we've met all guidance or not.
Thank you. Next question is from Damayanti Kerai from HSBC. Please go ahead.
Hi. Thank you for the opportunity. My question is regarding your R&D spend, so you have trimmed R&D outlook for this fiscal year in the regions discussed, but how should we look at R&D number as you expedite some of the clinical trials and go for more sites?
Yeah. No, I think now this will get covered in the next year's R&D guidance.
Okay. So whatever didn't get covered this fiscal, that will move to coming years?
I mean, we will guide for whatever that you should estimate.
Okay. My second question is actually clarification. So again, split of specialty sales between U.S., non-U.S., you mentioned roughly half-half. So can you clarify this bit? Because I assume U.S. used to be the larger contributor for specialty sales. So any other market which have seen significant pickup? That's why now we are seeing equal numbers coming?
No, no. It's only growth that we have said, Damayanti, for this quarter specifically, that the growth came from the dollar contribution of growth came from both U.S. and ex-U.S. markets.
Okay. But.
It has nothing to do with base business. Base business, very little.
Yeah. Yeah. I think just point, Abhishek. Glad you clarified because two, three years has had the same, I think, confusion.
Okay. But should we assume that U.S. is the largest contributor in terms of absolute dollar number?
Yeah.
Okay. Thanks for clarification. Thank you.
Thank you. Next question is from Anubhav Agarwal from UBS. Please go ahead.
Yeah. So couple of questions. One is on India business. The 14% growth we have for the quarter and for nine months also. So just trying to understand this 14% number. When we look at the largest therapies for us like cardiac, diabetes, CNS, etc., IQVIA shows about 10%-11%. I'm just trying to understand your number that is it higher growth for us, 14%, coming from some of the newer therapies which are going very fast, or this 14% is very similar number across the spaces, right? IQVIA is really behind, and we are cardiac everywhere. We are around 13%-14%.
As I said, all therapies are doing well for us, so this growth is not coming specifically from a specific therapy area. That being said, there are therapy areas which will grow faster than the other. But overall, if I look at from April to December, nine months' sale is across the therapy areas. And in the IQVIA, we are understated. It's our internal growth versus the IQVIA growth. What you see, there is a delta of a couple of percentage.
Okay. That's helpful. The second question is on the specialty data only. So the ex-US portion that you're talking about, you guys mentioned that there could be element of one-off there. Just trying to understand, I feel there are two points. One, is this largely one-off the delta that we've seen here? Let's say on that number of, let's say, 40 is the delta, 20 is ex-US increase. So let's say 20, large part of 20 is one-off. That's one part of the question. Second is, which geography are we talking about? Are we talking about just in Europe, in China, in Japan? Rough idea will be useful.
So, all of it's very difficult to such a very detailed breakup in terms of that. However, I would like to say that there are many factors, and some are bunched up in this quarter. However, I would say that including the Specialty, our annual revenue growth guidance reflects all this.
Okay. Thank you. Respect that. Thank you.
Thank you. Next question is from Akash Buaria from Motilal Oswal Financial Services. Please go ahead.
Yeah. Thank you for the opportunity. I have just one question. Can I get some color on other operating income, why it has increased so much sequentially?
So in the Q3, there was some recognition of certain grants as compared to the previous quarter.
Okay. Good. Thanks.
Thank you. Next question is from Vishal from Systematix. Please go ahead.
Good evening, and thanks for the opportunity. I have a question on semaglutide. We can see that you have a Paragraph IV in Canada for Ozempic and Wegovy. So just wanted to understand whether you also have filed an ANDA in Canada market because that's opening up earlier around 2026.
I mean, we don't give product-specific future information. But what you're saying is correct. In public information, people can see that we filed Paragraph IV to semaglutide in the U.S.
All right. So whether you would have also filed for Canada, would that make sense to assume that?
No, don't assume anything. We will give you guidance about whatever that we are likely to grow by in next year because we will factor everything, including potential approvals and potential price erosion and everything, and give you overall guidance.
Second one on Nidlegy in melanoma. It's being filed for neo-adjuvant setting. I just want to understand whether there is any approved asset in the same setting, or would this be the first one in that?
No, I think you are asking a question which is beyond my capability. I'll need to come back with proper information. Only thing which I know is that when we did the assessment and we looked at the data, we saw that our data essentially reflects a product which is likely to be significantly differentiated over the currently marketed product.
But since we don't have a presence in Europe, so how do we kind of go about this? Will we kind of?
No, no, no. We have significant business for Odomzo in Europe ourselves.
Got it.
The same customers will potentially prescribe this.
Okay, and any way you can quantify the PLI benefits that we get annually?
Oh, we do not give any specific amount on any grants or incentives.
Yeah. But I think there is a what you call maximum you can get is.
200 crores.
Maximum is INR 200 crores as per the scheme?
Yes, per the scheme. Correct.
For a single product or?
No, for a company. For a company. I hope it was a single product.
Got it. Thank you very much. Thank you.
Thank you. Next question is from Madhav from Fidelity. Please go ahead.
Yeah. Just a basic one. Did you ask what the India growth into volume price and new launches? It would be just helpful that. And I think it's a volume-led growth. If you could give us some sense what's helping us grow sort of ahead of market and volume, which is quite positive given a lot of the peers have been struggling.
Sure. As I said, we are growing both by volume and new products. Yeah. That's.
Also there would be a price component.
Price component. Yeah. Yeah. But we are definitely struggling.
Okay. No, could you give us how much of that 14% is volume-led growth?
So roughly 50%-55% is the new product and volume growth, and rest will be price-led. Yeah. Just to give you some idea about the growth.
Okay. Got it.
Yeah.
Yeah. Okay. Yeah. Okay. And even I think the EM market is doing quite well in dollar terms. So just any sense there? I mean, is it any specific tenders which have helped us, or are we adding new markets? If you could give us some sense in terms of what's driving very good scale-up there as well. Thank you.
I mean, generally, we don't focus on tender business. And if there is a specific tender business, then we clearly state because we don't want people to start kind of modeling continued business for a business which is one-time. So no, I think generally markets have done well.
Thank you.
Thank you. Next question is from Saion from Nomura. Please go ahead.
All right. Thank you. Dilipbhai, just on EM, typically in the previous quarter, you had talked about specific markets. So is there any specific market or markets you would like to call which is supporting growth, or is this across all your major markets?
Yeah. I think in the past also indicated that the large markets that we are present in are Brazil, Romania, maybe Mexico, Russia.
Okay. Okay. And just one more on the domestic business. You know, over the last few years, particularly post the pandemic, you know, the field force almost 40% expansion has happened. So if you can give some color in terms of how geography or doctor coverage has improved, and is that something which is aiding the growth? And how should we think about because at one level, your scale and the base is very large. So is that an advantage for you to grow ahead of the market, or it kind of puts more pressure? How should we think about it?
So broadly, what I said in the past also is expansion as well as decluttering of portfolio has helped us to grow the business. Yeah. So for future, maybe we will guide you at the end of the next quarter what are our plans.
But can you suggest if there is a significant geographic footprint expansion, like going more deeper into tier two, tier three cities, or which has this 40-odd% expansion in field force? Is that something which has contributed meaningfully to growth?
These are all expansion based on the need and the potential of the market. It's not like significantly we are going into different tiers.
Okay. Okay. Thank you.
Thank you. Next question is from Vivek Agarwal from Citigroup. Please go ahead.
Thanks again for the opportunity. So if you look at the ROW business side, so in the last four quarters, the business is not growing. So earlier you have alluded that there are some pricing-related issues, etc. So are these over, or when do you expect this business to start growing?
No, I don't think we give specific guidance to markets. What we do is we give you an overall guidance as a company that what we wish to achieve.
Understood. Yeah, understood. But in one of the quarters, actually, you highlighted that in one market, especially in Japan, right? Because of the pricing, there was some kind of slowdown. So are these issues over? So is it there in the base? So actually, I'm just trying to assess.
Yeah, Vivek, not yet fully in the base. I think we had said in last quarter that it will take a couple of quarters for it to flow through the base in time.
Okay. Thanks, Dilip. And just one last question. You highlighted that in this quarter, there's some kind of inventory buildout, right? So is it fair to assume that the next quarter sales of specialty should be lower from the current quarter, excluding the milestone?
Yeah. Yeah. You can assume that.
Understood. Thank you. Thank you.
Thank you. The next question is from Suryanarayan Patra from PhillipCapital. Please go ahead.
Yeah. Just a clarification about the same ROW. This quarter, we have seen a kind of markup from the previous trend. Is it comprising of the what is this driving? Whether it is the milestone sitting here in this line item or what? And also, if you can give some update about Ilumya in the China market, how is it progressing?
So in the ROW for the quarter, you are right. The milestone is baked in that ROW number.
Okay. And regards to Ilumya in China, any update there?
No, the product is doing quite well, is what I was told. I have no specific further update.
Okay. Sure.
Thank you.
Thank you.
Thank you very much. That was the last question in queue. I would now like to hand the conference back to Dr. Abhishek Sharma for closing comments.
Thanks, everyone, for dialing in at this late hour and and and listening to the management. If you have any remaining questions, you can reach out to the investor relations team. We are happy to take your questions. Thank you and have a good weekend.
Thank you very much. On behalf of Sun Pharma, that concludes this conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.
Yeah. Thank you.