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Eris Lifesciences Ltd
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Ladies and gentlemen, good day, and welcome to the Eris Lifesciences Limited Q1 FY '23 Earnings Conference Call. We have with us on the call today Mr. Amit Bakshi, Chairman and Managing Director; and Mr. V Krishnakumar, Chief Operating Officer and Executive Director. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. V Krishnakumar, Chief Operating Officer and Executive Director of the company. Thank you, and over to you, sir.
Thank you. Good afternoon, and welcome to our conference call for the first quarter of financial year '23. I'm Krishnakumar, and I'll be sharing the highlights of the quarter with you. I'm happy to open the call by sharing that our Zomelis Mother Brand has hit a monthly run rate of INR 100 crores per annum on a monthly sales basis in just 2.5 years from acquisition. This represents a growth of more than 8x in monthly sales since acquisition. So when we acquired this brand, it was doing a monthly sale of INR 1 crore and now the monthly sales are to the order of INR 8.3 crores to INR 8.4 crores.
In addition, Glimisave MV has joined the club of brand with more than INR 100 crores of annual revenue on a MAT basis. So now we have 3 brands clocking more than INR 100 crores of revenue per year, namely Glimisave M, Glimisave MV, and ReNerve Plus. And by the end of this financial year, we expect to have 4 brands of INR 100-plus crore revenue in our portfolio, inclusive of Zomelis.
Secondly, the Oaknet one business, which we closed the deal in mid-May 2002, the business has been showing strong traction since then. The business has closed a quarter 1 revenue of INR 55 crores, out of which INR 31.5 crores have accrued to Eris post deal closing. The business has drawn an EBITDA of INR 10 crores in Q1, of which INR 6.4 crores have accrued to areas in Q1 post deal closing. This quarterly run rate of INR 55 crores revenue with INR 10 crores of EBITDA looks sustainable throughout this year.
The IPM growth in Q1 of FY '23 was 2%, and our covered market grew by 2.7%. In comparison, Eris registered a growth of 8.1% in this quarter, which is 4x the growth of the IPM and 3x the growth of the covered market. We have given the details of our therapy-wise growth in our investor presentation, I would like to highlight a couple of aspects in this regard. Firstly, we see a revival of the growth momentum in the cardio-metabolic market with an average growth of 13% seen during June and July of this year.
This comes in sharp contrast with the average growth of 4%, which we have seen over a protracted period of the last 12 months, starting from June 2021 to May 2022. We believe that we can expect a stronger momentum in our core cardio-metabolic business in subsequent quarters given the sharp revival being seen in the last 2 months.
Secondly, I'm happy to share that Eris has made significant strive in diversifying its therapy base over the last few years. We now have 3 emerging therapies, CNS, women's health and dermatology, collectively accounting for 20% of our branded formulation revenue and growing at more than 25% per annum. While the cardio-metabolic therapy continues to remain our main state, its concentration is now down to 53% of our portfolio.
We have been discussing for some time now that financial year '23 will be the most exciting year yet in terms of new product launches. We have started this process of new product launches in July with the launch of 2 key products, [indiscernible], which is our brand of sitagliptin and FCM, a strategic offering that bolster our women's health care and cardiovascular franchises. We have also launched Zomelis D and Zomelis BD, which are combinations of vildagliptin and dapagliflozin. In quarter 3, we have several launches lined up in diabetes, involving combinations of vildagliptin, dapagliflozin, sitagliptin, Glimerpiride, pioglitazone and metformin, which will aggregate to 20-plus [ SPs ].
Now coming to the financials. Our stand-alone entity consolidated operating revenue of INR 329 crores for the quarter, which represents a growth of 7.3% year-on-year. Our stand-alone gross margin in quarter 1 stood at 82% in comparison to 83.6% in the last financial year, primarily due to product mix variations in quarter. In quarter 2 and quarter 3, we expect up to a 200 basis points impact on gross margin on account of the upcoming new product launches I discussed before.
Excluding the impact of new products, the overall impact of industry-wide raw material cost escalation remains minimal for us. We have expanded our salesforce by around 150 in this quarter, and the stand-alone YPM for quarter 1 stands at INR 5 lakhs. The stand-alone EBITDA margin for quarter 1 stood at 38.4% versus 40% last year, largely driven by the pin gross margin. The EBITDA margin of Eris's stand-alone business, which represents 82% of total revenue, continues to be the highest -- continues to be among the highest in the industry. We have consistently maintained an average EBITDA margin of nearly 39% over the last 6 financial years.
The finance cost of INR 7.2 crores in quarter 1 is largely driven by the cost of financing related to the Oaknet acquisition. Other income for Q1 was lower compared to Q1 of last year on account of the utilization of some treasury investments for the Oaknet deal and due to the impact of rising interest rates on the residual treasury investments. Stand-alone effective tax rate for quarter 1 was 11% as the Guwahati facility contributed to 78% of total revenue in the quarter.
Stand-alone net profit margin for Q1 is 29.1%, which is lower by 522 bps compared to last year, largely due to the Oaknet deal-related factors discussed earlier. Our consolidated operating revenue for the quarter was INR 399 crores, which represents a growth of 14.1% over Q1 of last year. Consolidated EBITDA for the quarter was INR 129 crores, and this represents a growth of 2% over quarter 1 of last year. Consolidated PAT for the quarter grew to INR 93 crores, largely driven by the impact of the Oaknet deal as discussed before.
In our investor presentation, we have given the breakdown of revenue and EBITDA by segment of business, and this will be a quarterly feature from now on. Eris MJ Biopharm Limited, our subsidiary, which houses the insulin business clocked a revenue of INR 2.1 crores in quarter 1. As you know, we have made significant investments in people with 140 MRs and 60 managers joining the field force in quarter 4 of last year. We also continue to invest in promotional activities.
In this financial year '23, we expect our insulin business to deliver a top line of INR 20-plus crores with an EBITDA loss of INR 15 crores. In addition to the expansion of human insulin, we plan to launch Glargine in quarter 3 of this year, which is 1 year ahead of our earlier guidance. To this effect, we have entered into an in-licensing arrangement with Biocon. Our Gujarat facility remains on track to commence commercial operations in quarter 4 of this financial year. The total CapEx incurred on the facility in the first quarter was INR 34 crores, and the total CapEx incurred on the facility till date is INR 100 crores. The total CapEx outlay for the facility is to the tune of INR 170 crores to INR 180 crores.
By way of guidance for FY '23, we are targeting a consolidated revenue growth of 30% and a consolidated EBITDA growth of 16% to 17%, including Oaknet. This is after absorbing the onetime loss of INR 15 crores at EBITDA level, which will be delivered by MJ Biopharm. Aggregate, this represents an EBITDA margin of 32% to 33% for this year compared to a 36% EBITDA margin last year. This dip in EBITDA margin is on account of a number of investments, which are concurrently getting bunched up in this financial year.
Firstly, the Oaknet acquisition and its impact on the P&L. Secondly, the tick starting of the insulin business and its impact on the P&L. Thirdly, the plethora of new product launches that will happen in Eris in quarter 2 and quarter 3 and their impact on promotional activities. And last but not the least, the commissioning of a new manufacturing facility in the later part of this year.
We expect our EBITDA margins to normalize over the next 2 years, and we will be back at 36% EBITDA margin levels by FY '25. In addition, I'm happy to share that Sujesh Vasudevan, a pharma industry veteran, has recently joined our Board. He brings over 30 years of experience from the pharma industry across leading Indian and global companies in the areas of sales and marketing and business development.
These were the highlights for the quarter. We are now happy to open up for Q&A.
[Operator Instructions] The first question comes from the line of Krishna Kansara from Molecule Ventures.
Sir, my question was regarding the Dydro market. So in the past con call, you have mentioned that the Dydro market has high potential to grow. So how does your companies tend to capture this market, given that a lot of players have entered this similar market of you?
Are you referring to Dydrogesterone?
Yes. Dydrogesterone.
Yes, while it is true that a lot of players have entered and we were expecting a lot of players have entered. Simultaneously, there has been certain cases of price drop also. But at the time -- at the same time, the market is also expanding very, very fast. Though still I think the market growth is around 30%. So we still stand our guidance. We guided for about INR 30 crores [Foreign Language]. So we are more or less there.
Okay. So sir, can you guide us about the market size of this particular Dydro market?
I'm sorry I'm not sitting with the markets individually at this point of time. But my colleagues will be happy to help you in this regard.
But it's -- see, the market is currently growing so fast. I think it's presently around the INR 600 crore market with a growth rate of 30-plus percent. So clearly, this is going to be a big market. I mean we have placed a big bet on this market because we expect Drolute to be a INR 100 crore product for us over a 4-year time frame. So that is the kind of bet that we have taken. So this is going to be a very big market. I think it is a little difficult to predict where it will settle down.
Okay. Sir, one last question regarding Drolute. So where does it stand in terms of margin? Sales, I think you mentioned, but what about the margins profile?
Yes. So the margin profile, as you know, the API suppliers for this molecule are still relatively few and far between. So in terms of overall margin profile, Drolute sits lower than what we're used in our -- what we used to get in our stand-alone business. So we expect that the situation will correct over a period of time, next 2 to 3 years when there will be more suppliers in the market and the margins will catch up. But as of now, it is lower than our overall stand-alone margins.
Correct.
The next question comes from the line of Vivek from Citi.
My question is -- there are a couple of questions. One is on CNS segment. So if you can highlight why the segment is relatively weak for the market? And why the product ReNerve, I think, that is not growing or relatively soft compared to the past trends.
So CNS -- so when we talk about CMS, we don't include, Vivek, ReNerve into that, ReNerve we classify into [ ReNerve ]. So while this might not be the case with AICD, but just to keep the therapy a little over, we don't do that. So one thing ReNerve is -- and ReNerve has vitamin B12 as a leading brand, had some kind of a bump in the last year first quarter. As you know, nutraceuticals, almost everything was performing well.
So CNS business, now internally one is an AICD representation, but internally is more or less INR 100 crores for us and still growing at a good healthy 25%. And it has not been because of new launches. It is because the old products have been going better. CNS has hardly seen new launches in the last 3 years. What I can remember is only 2. So this is a very simple trajectory of a young company in terms of revenue, getting into the specialty and making its way. So in a way, at a smaller volume, these growths have been historically easy to come. So that's how it stands with us.
Understood. And second question is on the glimepiride metformin combination. So not just Eris, but across the market, this combination is relatively soft over the last 2 years. So any specific reason for that? Is it the market that is now getting saturated?
Yes, Vivek, I remember I talked about this in the last meeting that how we would continuously see the glimepiride metformin market getting weaker by the day. So typically, it doesn't slides down very badly in chronic therapy, but over a period of time, the new patient on dropping off. So we are not very positive about the glimepiride metformin market.
But what is important for you to know is that there is another market which has now become very big. It is called glimepiride metformin with voglibose. And we have a market-leading brand there, I think, #2 brand there called Glimisave MV. And Glimisave MV for the first time has crossed INR 100 crores at the MAT level, and is still growing 15% internally and some 12%, 13% on the [indiscernible]. So fortunately, because we have a second brand, which is now becoming a little stronger than the first brand. This market would sustain for a longer period, which will mix both of them. But glimepiride metformin is going to be softer. Everything which has glimepiride will remain softer. The era of sulfonylureas is not as much as it used to.
Understood...
Just to round it off Vivek, sulfonylureas, we see a 6% to 8% growth category for us. Of which we expect around 3% will come from volume growth and 3%, 4% will come from price increase. So that is the kind of outlook that we have from sulfonylureas.
Absolutely.
So if you look at your margin guidance, right, for FY '25, the company is expected to reach back to around 36% kind of EBITDA margin that you have highlighted. So what kind of the revenue growth you need to [ put on ] in order to achieve around 36% kind of EBITDA margin by '25.
So I think on the revenue front, we have a new clarity on this year where we have guided to 30% growth, and there is a strong line of sight for that. I think for the next couple of years, our thesis is that the IPM growth, a lot of it depends on how soon does the IPM growth get back on trajectory. But I think we have always maintained that the IPM got to get back to a 10% per annum kind of a growth trajectory than for us to deliver a 14%, 15% growth on the back of that. I think that would be a baseline that we would look at, right?
So that is all I can say at this point. A lot depends on when the IPM gets back on track. But I think I made a comment about the margins because it's important to understand that the dip in margins that we see this year is driven -- it's just a one-off thing because it is driven because of all investment getting bunched together with year. It's not because of any fundamental change in the characteristic of our business.
Correct, yes.
[Operator Instructions] Next question is from the line of [indiscernible] from Motilal Oswal.
Sir, maybe I missed your comment, but there is a dip in EBITDA margin on a stand-alone basis Y-o-Y. So what would be -- I mean, what would be your comment on that?
Yes, there is a dip of 160 basis points in the stand-alone EBITDA margin, which is completely driven by the dip in stand-alone gross margin of the same amount. So this has happened because of the change in the product mix in this quarter. And it is not on account of any other reason. I think the -- we have also guided to a 200 basis points this is potential dip in gross margin in the next 2 quarters because we have a lot of new products that are getting bunched up for launch in the next few quarters. And as you know, whenever the new product launches happen, they usually come with a lower gross margin to begin with. And then over a 6- to 12-month time frame, the gross margins of these new products will fall in line with our corporate gross margins as we take the manufacturing in-house. So that is the trajectory that will play out over the next 2 to 4 quarters.
Okay. Another question is, so to what extent can the profitability of Aprica portfolio be improved...
Aprica, I think 20% is something which we are very comfortable with. Being a low base business, it has seen some kind of a headwind in the first quarter. But Aprica is also going to benefit largely because of new products, whatever small business is, but it's a very pure play diabeto cardio business actually. So the new products will eventually benefit Aprica in the remaining 3 quarters. But we still maintain that the profitability will be at around 20%.
Okay. another question, sir, that adjusting for the Oaknet revenue, the guidance seems to be around 10% to 12%, if my understanding is correct. But as you have indicated, there is a good pipeline of launches, especially in diabetes portfolio. So any -- I mean, do we have a particular reason for conservative guidance or...
Yes. So I think 12%, 13%, 14% is for somewhere in that zone. And I think the guidance for organic growth, as I discussed a couple of minutes ago, it is going to depend on how soon the IPM is revised because the quarter 1 growth in the IPM is 2%, right? And to give a growth guidance of anything more than 12%, 13%, 14%, we really need to see the IPM getting charged up in a big way. So whenever that IPM growth gets back to 8% to 10%, that's a million dollar question, right? Nobody is able to foresee that, right? So that is the reason why the organic growth guidance is to the tune of 13% to 15%, and the rest of it is made up by Oaknet, so collectively 30%.
Okay. Okay. Sir. And I mean on this insulin glargine, is there any royalty payment that will be made to Biocon for sale of it?
Yes, there is a royalty payment at the start -- onetime -- It's not royalty...
It's a onetime payment, so you can call it as a onetime [ liability ]. And then we have a sourcing arrangement on an ongoing basis, which does not involve any royalty payments.
Okay. And connected to that, so Biocon already has there -- I mean, they already sell insulin glargine in Indian market, right? So they will continue to sell, we'll be competing with them? Is it fair to have that understanding?
Yes, that's a fact. How Biocon might be looking at it would be probably that they would like to increase their pie of the overall new raw material, which is not supplied in India. So this is a good way for them to have more people taking from them and increasing their share in the whole pie.
[Operator Instructions] Next question is from the line of Harsh Varia, a professional investor.
Next question comes from the line of Vishal from Systematics.
Can you share some [indiscernible]. So you said there's talk about 30%. So what's driving that?
So it is considered to be a better product from the progesterone. So technically, if you ask me, progesterone is being used to support pregnancy, especially when there is a little bit risk in the pregnancy, right? So progesterone market in India has been a INR 1,000 crore plus market. And dydrogesterone is considered to be a better progesterone in terms of supporting the pregnancy, It has better outcomes. So typically, it is compared to a vaginal progesterone which is the gold standard. So just because of being a better product, we see a lot of shift happening from the progesterones to dydrogesterone, which is also a part of the same branding. So that's the science and the evidence behind that.
And what's the pricing difference between the gold standard and the progesterone?
So these are all based on clinical trials. So these are all called evidence based medicine. So when large clinical trials were conducted, it came out that dydrogesterone has a better pregnancy outcome. They measure in between 2 groups, which group has more pregnancy losses. So this is a curated trials, which people do, and the whole science is based on evidence based. So dydrogesterone their scores over progesterone. That is why the market shift is shifting to dydrogesterone.
And is the price different quite steep speak between vaginal progesterone and dydrogesterone?
No, dydrogesterone is actually expensive is more expensive than vaginal progesterone.
And so will affordability be an constraint in terms of driving the shift from driving the shift to dydrogesterone?
So typically, what happens is it comes to pregnancy. We generally see that such indications have never been price driven because the therapy lasts only for 3 to 4 months. So generally, the price component here has never been the driver. It's the clinical outcomes, the pregnancy outcomes, which becomes very important because Dydro has a better outcome data. That is why it will continue to grow.
Okay. And would you have any benchmarks in terms of how is the penetration of dydrogesterone in the Western markets, like the U.S.
I will not be having that off hand. But I know they are #1. Dydrogesterone is the #1 there. But what is the difference and how big is the market I don't won't have an idea.
Just an additional point on one question that was asked before. So the exact data is that on a MAT basis, the Dydro market is now INR 700 crores in India, and it is growing at 60%. So it's a very, very fast growing market, and it is going to be a very big molecule to play in.
So is it that number of participants have entered and they are able to expand the market? Is that the reason?
That is usually how market expansion happens as more API sources come available as more companies enter the market with their own brands, cost of therapy goes down. That is typically how market expansion happens, I guess, not only in Dydro, but any of the diabetes patent expiry that we're seeing now. It's a similar trajectory everywhere.
Okay. And just one more on dapagliflozin. So would you -- are you also driving sales in other indications that dapagliflozin is approved for. Or you are just focusing on diabetes space?
The basic approval for dapagliflozin itself has a huge, huge market. So there's basically 3 indication, which is heart failure, which is diabetes control and which is protection of kidney. So these put together a very, very large indication. The adoption is still 20% of Dapagliflozin in all these 3 specialities. We feel that this adoption will go to 60% over the next 5 years. That's why we see so much of growth coming in the market.
Okay. And with respect to Voglibose, you said that Glimisave MV is doing well. Just one question on that. Can Voglibose also combined with DCGI force?
I will not be able to say that because that's in the domain of DCGI. What -- I mean, technically speaking, science do support that. But whether it happens or not completely, it depends upon the DCGI, the [ minute ] they find in the combination.
So currently, there are no combination available with Voglibose and DCGI?
No, -- they are not.
[Operator Instructions] Next question comes from the line of Tarun Shetty, an individual investor.
This is Tarun Shetty from Haitong Securities. I just had a question regarding your EHPL business. Currently, we see a soft decline in the [indiscernible] and the margins are also negative. So could we have some guidance on this and for the year or maybe forward?
Sorry, your voice is a little unclear. Is your question about margin guidance for the year?
No, no. My question pertains to the EHPL business...
Okay. Got it.
Yes. So -- there has been a decline in the trade generic, which is akin to the market. The market last year had a very wonderful run when there were supply issues in the branded formulations to a certain extent, the market has cooled out so has the [indiscernible]. So strategically, if you look, we lost around INR 8 crores last year in this business all put together. That was the EBITDA loss which we made last year in this business. What I can assure you today that our -- we would be EBITDA neutral by the end of the year. That's what we are chasing. Volume is something which I will not be able to guide. We don't have clarity on volume as of now.
Okay. So, any other strategy to grow this business? Or you are planning to keep it at current levels, like around 6% of revenue contribution?
So the plan is to make it profitable now. So once the profitability comes in, the growth will follow.
[Operator Instructions] next question comes from the line of Punit Pujara from IIFL Securities.
Sir, I have one question that earlier we have guidance that our insulin glargine is in Phase III clinical trials, and we are expecting it to launch in calendar '23. Now even that we have in-licensed the product from Biocon, could you please provide some update on our clinical trials and our plans for financing our own insulin glargine? And also, any update on the outlook of other products, which were in our pipeline [indiscernible] liraglutide, we said we'll launch every 12 to 15 months? That would be helpful.
Yes, sure. No, that's important. So the MG glargine has already the randomization of the patients for Phase III clinic has already been achieved. So once the randomization achieved, it runs for 6 months before the study closes, goes to the DCGI and then it comes back. So it is in line with what we have said earlier. As KK mentioned, that we are -- what we are trying to do is just by that 1 year or whatever that ends up to be to launch an early glargine. So the long-term strategy remains intact. We just wanted to get in the market with it.
That was the reason we got -- we've got what we have got. So the long-term strategy doesn't changes. And the clinical trials are very in line. The same is true for liraglutide. We have done the randomization of liraglutide as well. Again, it will follow the same trajectory. And earlier it was looking that liraglutide would be delayed to glargine by 6 months. Now things are not as tight, it seems that both of them will be hitting more or less at the same time.
Sure, sir. So will it be correct to assume that both are currently in Phase III and both will be launched very near to each other liraglutide and glargine?
I think so. The clarity which we have right now indicates that.
And sir will it be right to assume that the Biocon in-licensing deal will help us increase our learnings about the glargine market as such, and that will help us ramp up our own product whenever we launch after Phase III trials is over?
Yes, absolutely. It's going to get us to the learning curve early. We are going to get used to the market. The other products, which are -- it is the [ pens ] and the administration piece. So it's going to be a learning curve. We will be available instant business. Availability is a very key thing. So you have to spend longer times to really put the business together. So that will help us reduce that time and what you said. So I'm with you on that.
Sure, sir. Sir, last question before I join back the queue. Will we be running our product and in-licensed product parallelly or this agreement with Biocon is just for 1 year?
I can't -- I mean, I can't tell you too much about that. What I can tell you is that our long-term strategy still remains and we do have an exit clause in the current arrangement.
Next question comes from the line of Vishal from Systematics.
Could you give a sense on what is the current contribution of the old generation molecules to your overall business?
Sorry, the contribution of?
The old generation molecule like the glimerpiride franchise and telmisartan too? And if you think there are others also which wherein the growth rates have matured or maybe in the mid-single growth rates, those kind of molecules? And what is the current contribution?
See, the data is available in the public domain, right, it's for everybody to see. I think the more important point is where we are in time, whether it is cardiac or diabetes, I think a lot of brand generic companies like us have been playing in the old generation molecule for a period of time because the new generation molecules was simply not accessible to us. And now one by one, those molecules are coming off patent.
So there is something big that happened last month. And then we are having a bunch of combinations getting launched in the next 2 quarters, then January, something big will open up. And then we have patent expirations lined up all the way to '25. So the whole market is going to shift to these new products. And the way we see is we have 2 tiers of products in our system. So Tier 1 for us is all the gliptins and gliflozins that will come off patent, the cardiac products that will come off patent, we have insulin, we have glargine, we have liraglutide.
So this is a bucket that will be a hyper-growth bucket, not only for us but for the entire market. So I mean, dapagliflozin, even after 1.5 years after going off patent, it is still growing at 40%, 50%, right? So this Tier 1 bucket is going to drive the growth of the entire therapy and for us as well. And there are older generation molecules that you mentioned, whether it is the sulfonylureas or the telmisartan tatters or the olmesartan and other molecules. This will continue to be the bedrock of everybody's business.
So these molecules are not going anywhere, and they are not degrowing also. In terms of growth outlook, as I said, sulfonylureas will be like a 6% to 8% growth segment, the telmisartan's of the world will be like a 10% to 12% growth segment. So overall, we can expect a sustained growth of around 10% from this base portfolio, which is a combination of volume growth and price growth. And this base portfolio will throw out a lot of cash, which will continue to get invested in the growth portfolio. So that is how I would look at growth overall.
So if you ask me how much the shift can happen, I have a data point from the U.S. market for you on oral antidiabetes where DPP-4 and SGLT2 these 2 categories drive 85% of the U.S. market by value. So that is the extent to which the shift can happen. But it will happen very clearly over a period of time. It is not going to be a knee jerk kind of a reaction.
There is large headroom even from here on for these.
There is massive headroom. I think in deeply for an SGLT2, we're just getting started.
Okay. Any -- are you also targeting launches on the [ glargine ] and minerals front during the year or maybe in the near future? Is there some differentiated...
We have nothing substantial lined up. The launches this year will be focused on diabetes, human health and cardiovascular.
You said earlier [indiscernible] is that on the market or not?
Sorry, Vishal, can you please come again?
You had earlier in-licensed an iron product, which probably was supposed to be more bioavailable than the existing iron products.
Correct.
Is that being promoted to the market?
Yes, yes, it is in the market, but we have lost the plot. We are now doing INR 4 crores a year. So not excited about that anymore.
Okay. So that's not scaling up as you would have wanted?
Yes, yes, yes.
Okay. And just one more on your -- could you share what was the EBITDA to OCF conversion for the quarter?
This quarter, it has been to the tune of 25%, which is substantially lower than what we are used to seeing, which is, again, because of a bunch of investments in -- so with new product launches come with a higher receivable cycle. So that is one reason. We had a significant amount of investment in inventories, which is again building up for new product launches. So 25% in Q1. And my expectation is we will be on a similar level in Q2 as...
As there are no further questions, we have reached the end of question-and-answer session. I would now like to hand the conference over to Mr. V. Krishnakumar, for closing comments.
Thank you for your participation on the call. Eris delivered U.S. Q1 consolidated revenue of INR 399 crores with an EBITDA of INR 129 crores and a PAT of INR 93 crores. Our net profit margin reflects the impact of the Oaknet deal on depreciation, finance costs and other income. The Oaknet business acquired in May '22 is off to a strong start with INR 55 crores of revenue and INR 10 crores of EBITDA in this quarter. This looks like a sustainable trend throughout this year.
Our Zomelis Mother Brand has hit a monthly run rate of INR 100 crore revenue in just 2.5 years of acquisition, representing a growth of more than 8x in monthly sales since acquisition. By the end of this financial year, we expect to have 4 brands having a revenue of more than INR 100 crores per annum. Our 3 emerging therapies, CNS, Derma and Women’s Health, accounting for 20% of our portfolio, are growing at 25% plus a per annum for several consecutive quarters.
For this financial year '23, we are targeting a consolidated revenue growth of 30% and a consolidated EBITDA growth of 16% to 17%, including Oaknet. This will be driven by a combination of growth in our power brands and new product launches where we have significant action lined up in quarter 2 and quarter 3. Thank you all. Have a good day.
Thank you. On behalf of Eris Lifesciences, that concludes this conference. Thank you for joining us. You may now disconnect your lines.