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Alembic Pharmaceuticals Ltd
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Ladies and gentlemen, good day, and welcome to the Alembic Pharmaceuticals Limited Conference Call on discussion on company's Q4 and annual FY '23 Audited Financial Results. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. R.K. Baheti, Director of Finance and CFO. Thank you, and over to you, sir.
Thank you. Good evening, everyone. Thank you all for joining the Fourth Quarter Annual Regional Conference Call. Let me start with the financials, and there are a few nondating or one-offs, which I'll try to explain. And then, of course, we'll take your questions. So financials first. During the quarter, the total revenue is INR 1,406 crores, EBITDA is INR 205 crores, net property is INR 153 crores. EBITDA margin for the quarter is 14.5% -- for the full year FY '20, revenue is INR 5,643 crores, INR 653 crores, EBITDA is INR 680 crores and net profit is INR 342 crores. The company, like in previous few quarters continue to expense our previously amortized R&D expense in Astral and or amounting to reach INR 11 crores in the current quarter and INR 155 crores for financial year -- full financial year 2020. The company's profit before tax and after tax would have been higher by INR 11 crores in the quarter and INR 155 crores in FY '23 without this amortization. Now of course, the entire amount has been expensed out, and there is no residual intangible books in the tangible assets in the books. Second item. I have intimated the stock exchanges earlier, the company's Board has decided to recognize the impairment of INR 1150.43 crores I repeat INR 1150.43 crores in respect of capital working progress largely consisting of pre-operating expenses of 3 new manufacturing facilities. Out of about INR 676.7 crores has been written off in current financial year, that is '22 '23 and for the balance amount of INR 473.56 crores provision for impairment has been created. The rationale for this bifurcation has been given in detail in our notes to accounts. Simultaneously, INR 1,025.66 crores net of deferred tax asset of INR 124 -- 124.77 crores has been withdrawn from general levers of the company. Hence, there is no impact on profit for the year on this account. The company is not required to make any provision for income tax during the year. The provision for recession made up to Q3 FY '20 has been reversed in Q4 FY '23. With effect on 1st of January 2023, the company decided to stop all further capitalization of preoperative expenses of all the new facilities and charge their entire expenses to P&L account. As compared to the previous quarters, the company debited additional approximately INR 65 crores in Q4 under various heads on this account. During the quarter financial year, PLI benefit of INR 21 crores was received from government of the year. PPH for the quarter before nonrecurring items, particularly of earlier get $8.33 per share versus 8.47 FY '23 full year, it is INR 25.9 per share versus INR 33.5 per share in the previous year. Mornings. The gross earning at the consolidated level was INR 636 crores versus INR 630 crores in March 2022. And the company has INR 75 crores of cash and cash on hand on 31st March 2023 versus INR 61 crores for March 2022. Net debt equity stand comfortably at 0.13. So you would see that from a cash flow point of view, the company's borrowing remains the same, almost the same as of March '22. So there's no incremental borrowing in March '23 versus March '22.[indiscernible] its entire CapEx as an as the dividend payment of almost INR 200 crores out of its internal equivalent. So cash flow for the company continues to remain strong. I will now request Shaunak to take you through in the landed business.
Yes. Thank you, Mr. Baheti. Good evening, everyone. I think for the fourth quarter, I think the India branded business saw a 9% growth in the top line of INR 490 crores. There was a cover impact in the base of azithromycin on oli-poducts in the previous years. And [indiscernible], the India situation growth in the business performed and grew 12% -- as the IMS in Q4, industry grew by 15%, whereas unlimited sector growth of 16%, in line with our objective of outgrowing industry, matching or outgrowing industry bakery points. In quarter 4, our specialty segments, to copy performance was 13% versus 12% for the industry, mainly driven by ops in gynecology, antidiabetic, ophthalmology and orthopedics. In the acute segment, the company performance was 23% growth, and [indiscernible] 38% growth, which is better than the industry by 28%. Marine industry, which was at 28%. Investor the company grew by 28%, whereas industry grew by 8%. The animal health business continues to maintain a strong run of growth momentum and recorded a growth of 15% over the previous year. For the financial year '23, the India bio-branded business had a 7% growth with the top line of INR 2,063 crores. [indiscernible] and also, India and growth was at 13% for the year. As per IMS, the industry grew by 8%, very went relative growth of 9%.For Specialty segment, the company performance was 18% versus industry growth of 13%. Majority of it's given through therapies like gynecology and paid ophthalmology and orthopedics. The acute segment, the company performance Exo was almost 10% versus the industry growth of 6% for the year. And respirate the company grew by 11%, where the industry grew by 3%.The Animal Healthcare recorded a business growth of 21% over previous year. And as one of the highlights for last year was we have a brand called Isopex which has been the second launch in the industry by IMS amongst 3,072 new launches in the industry for the 12 months for the IPM. I support recorded a growth of INR 28 crores in the first year of launch. And majority of our focus brands in the current year have in market share over the previous year. 3 of our large therapy areas, cardiology, gastroenterology and neurology have underperformed in the ‘23. Concession of strategic interventions were taken in the previous year, which kind of led to this underperformance, but the idea was to outperform the markets. Again, to some of our other high-growth segments on a sustainable basis, and we expect this kind of growth to start ticking this year. I'll hand over the discussion to Pranav presentation on the international business.
Thank you. The U.S. business continues to remain challenging on account of the competitive intensity. Total was a tough year in the U.S., we did manage to grow our volume as well over the previous year. Our focus is on improving efficiencies and execution in the midterm. The U.S. generics revenue was INR 350 crores during the quarter. The number is not comparable to the same quarter last year as Q4 of last year had a high sales as we had transitioned to our new TPS we have done overstocking in that quarter. The ex U.S. market continues to perform well, and it grew 33% for the quarter and 10% for the year. The API business also is on a strong footing and a performed value. It grew -- it grew 41% for the quarter and 24% for the year. Importantly, ex U.S. formulation and the API have both come off a high base over the last couple of years. So we're confident of our continued good performance in both these verticals. Our R&D expense was INR 136 crores, which includes INR 11 crores of onetime noncash [indiscernible]-off. Taking this out, it's INR 125 crores, which is about 9% of sales. While for the full year, the total R&D expense is INR 722 crores. [indiscernible], it is INR 567 crores, which is 10% of sales. This is a conscious effort that we've been making to get R&D as a percentage and as an absolute amount we want to control moving forward. We will continue our efforts to optimize R&D expense, particularly on the oral solid dosages in the coming years. We filed 4 ANDAs during the quarter. We also received 7 approvals in the quarter, and we commercialized FOMC plants during the quarter, and the first set of products were dispatched. We launched 6 products in the quarter. And in Q1, we hope to launch up to 10 products at least and 20 products in the entire year. The U.S. FDA conducted an inspection at our F3 facility in March and issued 2 observations. We have received 3 final approvals from this site to date. The U.S. FDA also conducted an inspection of a derm facility in March with 0 483 observations. And EIR was issued for our Onco facility act in the quarter. We have received 5 finance approvals from the site, including the Onco detailed date. The U.S. FDA also inspected our new oral solid dosage facility at 4 in December and issued 5 observations. We have received approval of 2 products from this facility to date. In terms of the numbers, the U.S. generics was at INR 354 crores for the quarter and INR 1,572 crores for the financial year. TX U.S. generics, as I mentioned, had a good year, and it grew by 33% to INR 249 crores in the quarter and by 10% to INR 852 crores for the year. The APM business at fantastic year it grew by 41% in the quarter to INR 313 crores and by 24% to INR 1,166 crores for the financial year. I would like to open the floor for Q&A. Let start with you.
Thank you very much -- we will now begin the question-and-answer session. [Operator Instructions]. We have a first question from the line of Damayanti Kerai from HSBC.
My first question is to Pranav. -- regarding the U.S. business. So now we are to 45 million sales in the fourth quarter. And what we have heard from some of the players that price erosion in the U.S. have stabilized, but your commentary seems I'll say more cautious. So can you share a bit more detail, like where are key challenges from your business perspective? And how should we look at this business in coming year?
So there is still price erosion in the U.S. market, has a slow term, yes, compared to about a year back, it has slowed down. One of the reasons could be because of people are placing less parity in the U.S. business. We've seen some of our peers start as U.S. business will latter. Number two is that there have been inspections, quite a few inspections. So there have been some regulatory issues that some companies have faced. But we do continue to see pricing pressure in the market. I think as a market, some of our peers on that have done well, I've got a few handful of approvals, which have offset those open for them, it's a little lesser. But there is still pricing pressure in the market. It's lesser than a year before it's still there.
Also, [indiscernible] pronouncing opening statement, -- this quarter 4 number is not really comparable because previous year, Q4 of March 22, we had an exceptionally great quarter because of -- not a heavy quarter because of transition to 3 PLs where we have asked our distributors to stock up. And this was implemented at that time during the Q4 '22 investor calls.
Sure, sir. So in terms of erosion label, are you still facing say, like double digits, if you can give some indication where it from...
It really depends product to product. But yes, I think it's still in the double digits.
And in, say, next 2 to 3 quarters down from here, how do you see the expecting to pan out? Any relief any signs like you see that we'll be seeing better prices in coming quarters?
I think what happens is, as I mentioned before, right, and historically in the call, I've said, if you see the state opportunity and the kind of prices that you're selling assortments, could -- it comes on. Once it gets written down to the ground, then there's not much -- how much lower can you keep going, right? So at some point, hopefully, this will start. We've already seen that the erosion has become less. There have been more supply challenges in the market we want. So hopefully, prices also should stabilize. I believe there will continue to be erosion because fundamentally, there's just a lot more capacity for the U.S. market from India than is warranted and that's what's causing this.
Sure. My second question is R&D. So it seems like you are tracking in line with what you guided that it will come down substantially. So now, so if I annualize fourth quarter R&D number, we are somewhere like INR 500 crores, INR 25 crores kind of R&D expense for next year. So that's what like we should be working with?
Yes, I think that's a good number for you guys to work with. Of course, internally, there will be a little balance. We'll have switch the balance internally, as I mentioned in the opening statement that we may reduce some of the OSB spend, and we may increase injectable. We may reduce some fixed cost. But you have 50,525 is a good number to work with.
And how are you filing like you target with this kind of lower R&D...
I think we still target about 15 to 25...
Okay. And my last question is for -- my last question is for Baheti. I missed your comment. You said like you won't be capitalizing any pre-operating costs now and everything will be moving to the P&L, if you can explain that bit that will be helpful.
So yes, there you heard it right. So up to 31st of December 2022, we were capitalizing all pre-operating expenses of facility F2, F3 and F4. Now effective from first off, while we are charging off the impairment to P&L, there is no rational for me to keep further capitalizing. So from effective 1st of January 2023, we have -- the Board has decided that all expenses will be charged off to P&L -- and that's how this quarter -- quarter of March '23, as an additional expense of INR 65 crores in its P&L as compared to the previous quarters.
Okay. And fourth quarter numbers are now like -- should be fair representation of cost we should be seeing in coming quarters without any capitalization?
Yes. The right other than that INR 11 crores, which is a residual expense, which we have done out of those old and or commodization. There also all this cleaned up. So you won't find that in next quarters.
Thank you. A reminder to participants to Presstran to ask a question. We have a next question from the line of Ankush Mahajan from Axis Securities.
Yes. Providing me the opportunity. So my question is related to the U.S. business first. Sir, how many molecules as new molecules that we are expecting to launch this year in the U.S. market for FY '24?
Sorry, go ahead.
And sir, we have done a very good numbers in EPI business. So just trying to understand sort of how is the demand for the API and across the geographies? That's just put some thought on it.
Yes. So in terms of the U.S. market, as I mentioned earlier, that we will launch about 20-odd products in the financial in FY '24 in the U.S. market. And as quarter 1 will be a little more, but total about 2025 is what we should look at for the U.S. Q4 was good for the API business, very good. For the year, we would expect API to grow by about 10%. It is a good market. I think we had some opportunities. We have some more long-term contracts. We would free up some capacities as well. So that's what led to an increase in the API business.
So on use of these API prices were falling now. So can we say these are stabilized now?
It depends. If it's tough to see API prices have fallen, I think it really depends who you are supplying to and what I think we're still seeing some erosion in API prices. There were a lot of supply constraints over the last 2 years, we -- the China or intermediate so core-related, -- but I think you will see pricing in pressure in API prices. And I think a lot of the growth is not due to pricing, it's due to volume growth.
So we can say that the volume growth, that uptick is there in terms of the margin...
Yes, yes.
And sir, what we are launching now this 2025 products in the U.S. market. So could you throw some more like that in these therapies or segments that we are looking...
So we don't -- for U.S. generics, we don't get therapy-wise segment. Probably want to happen as...
For in terms of injectables, how many in the...
Yes. So what will happen is in terms of injectables, out of 20-odd approvals, I'm assuming about 10 to 12 will be oral solid dosage and the rest would be ophthalmic injectables in do.
And for pricing scenario in rectal at this moment?
It's too early for us. We've just started launching. So it's still early days for us on the injectables. Maybe next quarter, we'll have a better track I got to say.
We have a next question from the line of Bharat from Equirus.
I just wanted to understand on the OpEx part. So when we look at OpEx sequentially ex of R&D it is declining despite the fact that we have seen new facilities getting commercialized and all the operating expenses are hitting the P&L now. So what is leading to this lower expense sequentially, if you could explain that?
Sir, I'm sorry to interrupt your sounding distant.
Okay. So, you see this and if you're comparing it with the last year, we had a onetime impact of INR 100-odd crores that for the Alright? So if you're comparing with that, obviously, it will look low, I will. Otherwise, it is generally up...
Yes, I'm comparing over third quarter of FY '23. So if I look at it sequentially it is also down.
Yes. So yes, I was coming to that actually. So if you see the last year, it goes with year this time, it's being impacted largely on account of the marketing spend and all those things actually. So there is a bit of the R&D as well as low actually. And all of that coined own to a lower spend. So that's precisely the reason in...
Yes. But sir, still, if I look at right, in first quarter, we were doing around INR 33 -- second quarter, it was INR 340 crores around. And if I start from that perspective, now what is happening is in third quarter, we are still sitting at around a similar -- I would say, INR 330 crores, which includes the operating expense of around INR 65 crores. So that means that overall expenses have gone down, underlying expenses have gone down far lower. So I can't get it because that will mean that we are around INR 265 crores, ex INR 65 crores, which we are referring to?
So you are comparing this with December number of INR 530-odd crores with INR 460 or so, right? That's how you're comparing...
Right, after excluding for...
Exactly, that's what I'm telling you that you will see some of those promos pans and all the other expenditures, actually, those kind of -- you will always see a bit of a variation there. I mean there will be some quarters which are bumped up quarters and then there would be quarters where it is -- this time is a little lower actually. So this was one such quarter where we had lower spend.
Okay. So is it safe to assume that it will be again going back to the normal levels, which we have seen historically?
Yes. So if you look at the full year number, right? So your full year number is close to INR 2,000 crores, right?
Right.
Yes. So on that number, you could -- considering that we had INR 60-odd crores of additional expenditure in Q4. For new plants, you can briefly consider that there would be around a 10% increase in that number for next year, if you are... Yes.
66% includes mutant INR 12 crores…
Right. The ex Alior expense will not be repeated. I get that. But largely, we are saying that expert will be seeing a growth and another INR 60 crores 40 crores of expenses will be also -- sorry, 180 sort of expenses will also be hitting other expenses considering because of new clients expense, right?
Correct.
That's helpful. And on the U.S. market, we have been referring that we'll be launching a couple of new drugs. Could you tell us that how many new injectable products have been fined in big out of all the facilities which we have?
Bharat, you want to know... Filings actually, right? So Yes, both the plants put together is close to INR 15…
15 injectables are fielded. So overall, pending approvals are around 40, 45 for us at this moment?
No, overall pending approvals are almost 90% actually around 90%, if I'm not understanding.
Pending months, right?
Yes.
[Operator Instructions]. We have a next question from the line of Tushar Manudhane from Motilal Oswal...
Sir, considering the number of launches, comprising both solids as well as injectables, what kind of sales can we expect in the U.S. for FY '22 from current $160 million...
we don't give a forward guidance. And so the U.S. is very tough, and I'll tell you why is let's see how the launch is happening. Its early days. So that's on the injectables. We would like to grow the business. But the other side, what I have said earlier to [indiscernible] that there's sort of erosion as well, right? So it's very tough for me to predict. And that's why we don't give a guidance for U.S. sales.
That when price erosions are there, but at the same time, compliance issues for diggers or something literally shutting down the plant. So we don't see the opportunity…
I believe there are opportunities in the U.S. market, and you continue to get opportunities and you have to be a nimble player. But to put a number on it is tough so I wouldn't like to give a forward guidance.
And in particularly, in API, just one more question, why you address that is most of the growth is volume led there, INR 300 crores sort of a revenue possible? Or there is a further scope on account of this sensing volume active?
Yes. No, that's -- the API business is a good business, and it will continue to grow. I expect API and ex U.S. rest-of-the-world generics. I think both should grow by 10% at least this year.
We have a next question from the line of Darshan Zaveri from Crown Capital.
Sir, I just wanted to ask about what do we see our margins will be around going forward for the next year?
So Darshan, like margins, of course, would be in a bit of pressure considering that we would have all the new plants now commercialized actually, the run rate of that is close to INR 60-odd crores every quarter actually. So that would have -- and -- but again, you will have sales coming in from this. So it will play out, I mean, over the quarters. But we -- it feel to take a guess, I would say that a number around 15% would be a right number to go it...
Yes. Sorry, Sorry, there was a network issue. I missed the last a sorry...
Interest of everybody, we can take that offline in...
Okay. And sir, with -- sorry, and one more question. So I understand U.S. sales would be a bit difficult to guide on. But overall, how much do we could see a range of revenue growth that we could expect in the upcoming few years? Maybe nothing specific, but some kind of color that would be it.
So see, like domestic, we said that not giving the number, but we will outsmart the less growth rate. As far as international generics is concerned, U.S. is -- we would have very good launches coming in actually -- and so that would be growth as far as U.S. territory is concerned, Ex US other generics we should grow at around 10%, 12%. API business 1%, 1% of growth is profitable.
[Operator Instructions]. We have a question from the line of Bino Pathiparampil from Elara Capital.
You have mentioned that you have taken a write back of that in Q2.
Sorry, can you use the handset, please? Your voice is not clear.
Hello... Is it better?
Yes.
Yes. You have mentioned that you have taken a write-back of counts in Q4. Is that related to the write-off of assets?
Yes. Yes, that's true. Yes. So whatever provision which was done in the first 3 quarters gets written back into quarter 4.
Okay. And are there any more deferred tax assets related to this that you are carrying forward into FY '24?
So a balance of INR 470-odd crore of impairment for this provision has been done, depending on how the generic market behaves and how the impairment valuation will be at that time. If required be return of in '24, then there's both plants, part of the facility distinction.
Understood...
Impairment of INR 1,150 crores, if I explained INR 670-odd crores have been charged off in the current year in the current year, we have made full provision so that no further hit comes on P&L of subsequent years.
Understood. So basically, if the remaining -- it also happens in FY '24, then that tax benefit could come in FY '24, FY '24 could also be very low.
Yes.
Okay. And one word, what sort of reported pass out should we come to? Should we will go back to around 25%?
No... I'm not getting it is also we will continue before the very meeting, so you can safely assume for your calculation purposes that we will be at, which is 17.5%.
We have our next question from the line of Tarang Agrawal from Old Bridge Capital.
Just wanted to check a couple of things. One, how should we look at your CapEx from FY '24 onwards? And second, given that INR 65 crores is the additional quarterly hit that we've seen. So would it imply about INR 240 crores to INR 50 crores of additional annual hit on the P&L because of the new facilities?
So as we have been sharing with investors most of the CapEx -- most of the new projects are now are completed, and we are personalizing it -- the CapEx in '23 '24 largely in deboning or a little bit of expanding of API capacities. We are also investing in some solar power so that our electricity cost goes down because integrate is pretty high. And there will be some investments in new facility for India blended business, which is at initial stage. But having said, I think the CapEx -- and of course, there will be no free of capitalization. So I said always, I think the CapEx should be fairly billion the total CapEx should be less than INR 250 crores
Okay. And to my second question.
What is that?
Would we see additional hit of about INR 250 crores to INR 260 crores... Can you...
Yes, that's right. I mean that's not the -- a normal routine expenses, which will get charged to pay.
We have a next question from the line of Bharat from Equirus.
Sir, sir, actually, during the last quarter, we were referring that there is total INR 400 crore expense, 200 above EBITDA and EUR 200 million below EBITDA. Now since we are electing INR 65 crores or above EBITDA that translates to almost like INR 250 crores to INR 60 crores. So is there any incremental cost which we have realized now -- so because earlier we were guiding for almost a 180 to 200 above EBITDA...
So as the facility gets operational, I think obviously, the operating expenses also goes up as we get into commercial production. So only these facilities have been used only for taking exhibit batches and for taking those filings. Now they are being used for regular and commercial production.
So... here on whatever the decrease would be that will be largely the inflationary one-- or there will be some -- that INR 600 crores, which is sitting as CWIP, so there could be any additional increase also which can happen over and other once those are commercialized.
No, I didn't get you.
No. So that would be very incremental, small CapEx, which is just a balancing equipment. So that number stays there actually.
But what will happen is as we start commercializing, so you're not doing any major CapEx or big start. I think just in the line, there'll be balancing maybe higher equipment size and suffer commercial that's about it.
Okay. I get that. I simply you are lapping that there will be another INR 200 crores, which will be coming below EBITDA. So with new impairment which you have done, what sort of number that will be now?
Yes. So Bharat, the number would be like cash should be around INR 200 crores, INR 220 crores and depreciation would be another INR 75-odd crores actually. So all put together would be around between INR 280 crores to INR 90 crores for these new plants.
Can I have a better part -- so you said INR 200 crores crores...
I'll repeat again. Cash expense would be between INR 200 crores to INR 220 crores, and there would be additional depreciation of around INR 75 crores, that would take the total number between INR 280 crores to INR 290 crores.
Okay. So -- but my belief was we were already doing INR 65 crores during this quarter. That was above EBITDA? Or that is across our line item.
So Bharat that is exactly what has happened. This -- I mean, arrangement that we have done with CWIP takes care of the depreciation on the preoperative and that's like INR 100 crores of the depreciation FBO.
I get that. What I'm asking is the INR 65 crores, which we have charged to the P&L during this quarter, is that a spread across above EBITDA and as well as below EBITDA...
Depreciation portion into it, yes.
We have a next question from the line of Resham Jain from DSP Mutual Fund.
Just a question on the margins. You mentioned 15% margin for the full year. Is that right?
Yes, that's what the ball mark numbers.
And how will this trajectory be because you have multiple launches maybe in the first half and we'll scale up in second half. So do you feel -- what do you expect the…
No, you will not very -- can you repeat that?
Yes. Am I audible now?
Yes.
What I was asking is that 15% is a full year margin. So how the margin trajectory will be? Because first half, you will have multiple launches and they scale up as year progresses. So how will the exit run rate of margins be?
So we're talking about year as a whole. I mean, not by setting that into quarters, actually. I mean, it's overall -- and again, I mean, it's just giving a flavor for the year.
Okay. Because if you look at before your statin benefits, the kind of margins you were making and now once the plant scales up, so that was the context. But even after scale up, you don't see the exit run rate would be better than what you would be doing, let's say, first half -- that was the context in which I was asking this
See, that's exactly because we will not be completely putting intact because you got -- I mean, if you look at the grid and the approval of the products and things like that, you are going to partially keep using the plan, and it will gradual scale up is going to happen, right? So you will have 5, 7 products. Then in the second half, you will scale it up to 10 products. FY '25, you will have 25 products like that. So that's our...
So I -- depends on, right. One thing is the plant while we start using them. They're not fully optimally utilized, right? It will take a year or 2 until a new approvals come. Second thing is even before -- what's happened is the fundamental U.S. business that we had, that the margins have come down and that right. And that is impacted. So even more to start in some margins in the U.S. business or the OSC were much higher continually shortages, and we have very high margins in the U.S. business that kind as well. So that's the fundamental part that has changed. The rest of the business, India is growing ROW API are growing versus the U.S. that tie down the margins.
We have a next question from the line of Damayanti Kerai from HSBC.
So I have 2 questions on India business. So you mentioned that you continue to outperform the market. Can you talk a bit about the growth drivers? Like what are your expectations in terms of volume or price contribution from the new product introduction, et cetera? So... Come into...
I don't know split off. But I mean, like I said, I think what we maintain is that if the market grows, whatever the market growth is, we aspire to grow a couple of points higher than the market growth numbers, and which would be a composite of all of new launches, some price increases, some time volume would be a bulk effect. So -- but like I said, it also is depending on the profile of the market growth. But yes, anywhere from magic market growth to maybe you're going up 4, 5 points higher than the market growth. I mean that is what we wish to -- which we are workloads
Sure. So if I understand correctly, volume part will be obviously following the market trends, et cetera. But should we assume the pricing contribution around 5%, 7%, which we generally see a...
Like I said, it could have the exact breakup offhand, but I just can share that with you. But I think volume would be a bulk of the growth numbers. and there will be smaller components of pricing in this hotel also.
Okay. And...
But just so we're clear, I think on the DP product, I think there will be no pricing increase versus last year. So if you had to take that as -- which is a chunk of our portfolio, if we keep that as flat, I think except that there will be some price increase, but there will be some price cuts also as a part of that. But yes, I mean, it would be largely volume and there will be a smaller component of pricing on that?
Okay. So just to clarify, you don't assume any pricing change in the DPCO part of your portfolio, although around 5...
Yes, because if you see over last year versus this year, I think prices are the same, if I have to factor in the card, which we had to take last year as well as the opportunity as per the [indiscernible]I, I think it was a net even. So I don't think there's any increase over the previous financial year at the start of the financial year, so.
Okay. And my last question is on your observation. This is for the broader business. So your observation on the input cost pressure, which we make a few quarters back. So all those have normalized the input cost pressure on raw materials, all street, et cetera.
Yes. So I think I think some of the pressure stays on the on the R&M side of things. But I mean, honestly, with the pricing oil coming down, we expect some easing up of this pool going forward. On the API side, there is some marginal increase but not material.
Okay. And are there like energy or fleet costs, et cetera?
No, -- we don't have large component to India business on that side.
Okay. Not to India business, but from overall business, maybe...
Not visibility of the until...
No. Sure. So like other energy costs will be increasing because of a helps by the state electric boards and b, because of increased unit convention with the operations of additional facility. And I mentioned in my note that we will be investing into solar projects for compensating possibility onetime CapEx, but then well be a significant amount of savings over next trailing years or so.
So this benefit of solar energy investment will come from this year itself? Or it will take some time?
I think it will come from H2 of this year.
Ladies and gentlemen, that was the last question for today. I now hand the conference over to management for closing comments.
Yes. Thanks. So thank you, everyone, for being patient with us. We can -- I think it was a heavy board and the meeting extended right up to 4:30 also. So thank you very much for being with us till late in the evening and wish you a happy weekend, and we'll keep interacting individually and of course, after the -- in near financial year. Wish you all the best.
Thank you. Ladies and gentlemen, on behalf of Alembic Pharmaceuticals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.