J B Chemicals and Pharmaceuticals Ltd

NSE:JBCHEPHARM

Earnings Call Transcript 2022-Q4

[Jason D'Souza, executive]

[Audio Gap]

all people in the audience here today. We also have an online audience of over 150 to 160 people. That's the last count that I was given. And thus, I would not like to waste time because the online audience is waiting for us to start.

But first, let me start by introducing the management at J.B. I would first like to introduce our CEO, Mr. Nikhil Chopra. Then our CFO, Mr. Lakshay Kataria; Mr. Kunal Khanna, our President, Operations. And today, we are also -- we also have the presence, which you all would have not heard on the analyst call, we have Mr. Dilip Singh, who's the President of India business for us.

So with this, I would like to start the proceedings right away, and I would like to invite Nikhil Chopra, our CEO, to come forward and make the presentation today. Over to you, sir.

[Nikhil Chopra, executive]

Thank you. Thank you, Jason. And a warm welcome to all of you. We appreciate your time, and thank you for coming today afternoon, and we are also feeling privileged to host the first physical investor meeting.

The agenda has 2 parts. In terms of us, we'll be talking about overall the milestones that we have kept for ourselves when we had our last strategy presentation to many of you 15 months ago. What is the journey that we have traveled in the last 15 months, and we'll be talking about our annual performance, quarter 4 performance. And then we have some surprise element to talk to you in terms of what are we trying to do in terms of creating our new identity.

So let me get into the presentation part in terms of what we are trying to share with all of you. So I feel privileged when I see this slide. As a company, a 45-year-old company for 4 decades of rich legacy that we at J.B. enjoy. In 1976, late Mr. J.B. Moody founded this company known as J.B. Chemical and Pharmaceutical Limited. And within a span of 10 years, we could launch the iconic brands, which many of you know and we have been talking regularly about, Nicardia, Rantac, Metrogyl. And all these brands are household names, which many of us sitting here, our families have been assured of the good quality medicine that we manufacture from the house of J.B.

And equally talking about in terms of where these medicines are manufactured, we have got a state of our manufacturing plant, which is in southern part of Gujarat at Panoli and Daman, which we consider as our pride in terms of all the necessary approvals, compliance in place. And we can vouch for the work that our 2,000 people in our manufacturing plants do every day in and out.

For the first time when I joined J.B. in October 2020, I was -- I visited the plant and I've been told that though we have been affected by COVID for the last 2 years since March 2, 2020, never a single day that our plants have been closed. So we, as a responsible company, are committed to patients in India, globally, and also committed to the partners that we have been working over the last 3, 4 decades, which at some given time I will talk in my presentation.

Then comes from a historic moment of time, the launch of Cilacar, iconic brand once again in the world of hypertension, which today is a INR 300 crore franchise. Basically, if I have to call it, it's a bread and butter for us in terms of the work that we intend to do in the world of hypertension, intend to include the ecosystem of hypertension. That is what we have achieved as a company over a period of time.

Talking outside India, we have 2 home markets that is a combination of biotech, the way we are known in South Africa, close to INR 300 crores business, 50 employees, mix of public and private business that we do. And equally, we are present in Russia by the name OOO UPL, where we have got once again our presence in Russia and CIS countries though the environment is not that friendly to operate, but we'll continue to supply medicines, continue to serve the patients in that part of the world also.

And then in 2020, when the dialogues were happening with KKR, and KKR took the 54% stake at J.B. And then I was roped in. I had the privilege to join this company. I have spent 2 decades plus time in Indian health care industry and trying to use all my experience and whatever it is I have learned over a period of time to do the right things in this company. And it has been a dream run if I have to share you in terms of what we have achieved, which we'll talk in the coming part in the presentation.

March -- October 2020, when I joined in, we were 32nd ranked company in India, and it's a pride moment to -- for me to share with all the good work that our team sitting here and on the ground at our manufacturing plants. Today, we are 23rd ranked company in Indian pharmaceutical market. And this has never happened in the history of Indian pharma market. And if it has to happen, I think J.B. will be the only company to climb more ranks. That is where we stand.

Also, besides the new brands, the big brands that we have got, the entire opportunity to get into newer categories of business, look at things more progressively, look at how constantly we can make a company which is future-ready, resilient to difficulties that all of us have seen in COVID times. So that is the intention going ahead. And at the end of the day, patient first, looking at how we can serve more and more number of patients not only in India but globally. This, I have spoken.

So let me come to in terms of where I think many of you would be interested in terms of where we stand, what -- how we have performed. Committed to what we shared with you in terms of quarter-to-quarter where we have been interacting with many of you, good quarter for us, INR 600-plus crores revenue, INR 625 crores. That is what we could achieve, growing at a pace of 18%. Many of the companies, as all of you know, are struggling for growth. And not only growth, we fundamentally believe profitable growth, so good growth in EBITDA, which at some given time our CFO will come and talk more about financials. But the new peak that we have achieved in terms of revenue, we were able to cross a milestone of INR 2,400 crores, so INR 400 crore addition in top line that we have made and growing at around 19%.

Our contribution of business is equally divided if I have to talk about 50% from India, 50% coming from international market, but the backbone of this growth is the performance that we have delivered, what I spoke earlier of the ranks that we have gained in the Indian pharma market, a robust growth of 30%, which is unheard in terms of what we could deliver and backed up by the entire concept of -- that we have been working in the company, which I've been speaking earlier, of big brands getting bigger.

With the new go-to-market strategy that we had put in place 15 months ago, which we have been speaking, the entire transformation that we have done in India business, we could create space for new launches. Our new product contribution was hardly 1.5%. Last year, our new product contribution is close to 4%. And fundamentally, I believe if 2,500 people working on the ground, motivated, charged, better trained, if they're able to generate prescriptions for new products, make big brands bigger, I think that is what any company would dream of. That is where we stand.

Equally, from an international point of view, where our guidance has had been that by the end of the year, we should be close to double-digit -- low double-digit growth. That is where we are. We have been -- last quarter, we had a good performance, and we could see some upbeat demand coming particularly in the world of contract manufacturing business very closely with some of the big multinational players that we'll talk in detail.

So overall, if I have to talk about from both parts of the businesses that we stand today, India business continues to deliver market-leading performance. And equally, international business has bounced back with low double-digit growth, and that is what we intend to do in the coming time also.

We had laid down -- this is what I've spoken in terms of the ranks that we have gained, the 5 brands which have been the backbone of what we have delivered as growth. They continue to gain ranks. They continue to deliver market-beating performance. They continue to beat the market in significant proportion.

And equally, new launches, the entire new go-to-market strategy that we had put in place, we had optimized our resources. We had overlap of prescribers. So we looked at in terms of how we can at least optimize our resources on the ground, launch and get into new progressive category of business, and that is what we have done. We have ventured into the business of pediatrics, respiratory. We have launched a new division. We have launched products in the world of metabolics. We have launched product in the world of diuretics. And in the next 18 to 24 months, the products that we have launched, not all 15, but at least half a dozen products, I expect that we should generate a revenue of INR 12 crores to INR 14 crores for each product, which conceptually should give us a revenue of INR 100 crores, which would be a next big milestone for us.

What -- also, parallelly, what we have done -- and this probably is a new learning for us, which always I wanted to do, is to get into the world of acquisition. And we could get a good asset in the form of Sanzyme. Just to briefly talk about Sanzyme as entity, we could get -- we could buy out this asset at a cost of INR 650 crores, INR 150 crore revenue more into the world of probiotics, mass and class probiotic. That is what we could get, good gross margins, huge opportunity. Probiotic market in India is going at around 14% to 16%. We have got 7.5% market share. We intend in the coming time we should double our market share. We should become top 3 players. That is what we want to do.

Nobody is running away from the cost pressures that the industry has been speaking not only in pharma, but across sectors with the RM/PM costs going up, the freight cost going up, overall the difficulties that all of us have been hearing and witnessing in terms of the inflation cost, which is going up. So eventually, there are going to be headwinds in the business. But equally, we are looking in our organization, and that is what has been the learning for us in terms of how do you drive better productivity not only on the ground, not only in manufacturing plants but across the company. And that eventually will only help us to reinvest in the business.

So we had laid down 5 pillars in terms of what we want to do in our domestic business. And just to once again reiterate that 60% to 70% of our time, money, effort energy will go for India business. That is where we stand. And if I have to elaborate on all the 5 levers, the entire realigning go-to-market strategy, where we had put full transformation process in place, we re-optimized our resources on the ground, we looked at how do we cater into new avenues of progressive category of businesses, that is what we have done, get into new launches, which would generate revenue. And those all are helping us in terms of gaining ranks.

If you look at the purpose and productivity, as we call in India business, we started -- in FY '19, we were close to INR 3.5 lakh. Today, we're close to INR 5.6 lakh. And going ahead, we see this productivity to grow to 12% to 14%. So that is where we stand. So looking at overall as a picture with good gross margins, better mix of products, this should only help us of driving better productivity.

If you look at Indian pharma market, 60% to 70% of contribution of INR 1.5 lakh crore market comes from acute business and around 30% to 40% contribution is coming from chronic business. We -- if you look at the way were placed FY '18, '19, we were -- 40% business was coming from chronic and 60% was acute as the pharma market. But we have inched up in terms of our chronic business now close to 50% with the entire work that we have done in the world of hypertension, in the world of GI, where it is more mix of chronic and equally in the world of nephrology. In addition to Sanzyme, also, you would have heard and we have been talking to you in terms of -- we have got into the world of heart failure with getting the in-licensing product from Novartis, which will only help us in terms of inching up our contribution of chronic portfolio to 55% in the coming time.

This is what I was talking about. And many of you, when we have been interacting, that J.B. is a 5-brand story company. But actually friends, it is not a 5 brand. We are talking of 50 SKUs put together in this franchise. When we talk of Rantac, when we talk of Metrogyl, I think we have got the privilege in terms of the fundamental work which has been done in the company of getting into the world of incremental innovation.

So we -- just to give you examples, we have got Rantac 150 milligram, Rantac syrup. But also, we have got Rantac OD 300 milligram, which conceptually is the prescription from the specialist. We have got Metrogyl 200-, 400-milligram tablets, which is a household name. But equally also, we have got Metrogyl ER 600, extended release tablet, which drives better patient compliance. We have got Nicardia which is a drug of choice for uncontrolled hypertension, Nicardia 30, Nicardia 60, Nicardia Retard. But also, we offer as a product in our basket, Nicardia XL, which is extended release, which drives better patient compliance. So not only legacy product, but equally, the company has worked over a period of time of getting the right line extensions and incremental innovation as we need.

Let us talk of Cilacar for a moment, INR 300 crores franchise. People will tell -- people will be talking Cilacar is a one brand, but it's a -- I can count, which starts with Cilacar 5, 10, 20, Cilacar M, Cilacar T, Cilacar TC, Cilacar TM, enough opportunity, variety of indication, different specialty. 1 in 4 hypertensive patient is not knowing that the person is suffering from hypertension. So it's a huge opportunity for us in terms of how we can drive the ecosystem and why not to aim for in the next 5 years. Who knows, this brand would be worth INR 1,000 crores. That is what is the intention going ahead. That is what we want to do.

So what I wanted to share, it is not a 5-brand story company. It's an opportunity that we look at in terms of what we want to do with doctor community in metro, Tier 1 town with a specialist and also look at what we can do with channel for our legacy portfolio for our Rantac and Metrogyl, which are -- which conceptually will help us only to gain ranks and deliver market-winning performance.

New launches, I spoke earlier. Contribution was close to 1.5%. Today, we stand close to 4% contribution, which reflects about the engine, which is running on the ground, is agile. That is the way we think, and we have got into some category of products, which is a combination of getting into the world of respiratory with more into specialized world of respiratory with lung fibrosis, getting eventually into the world of diabetes. With cardiology, we have got a good presence, why not extend that, in the world of metabolics, getting into the world of diuretics. So we'll continue to launch the products, we want to play and win and generate prescriptions and look at not venture into a new category of business where the life of our medical representative on the ground becomes difficult. We want at least a good starting point, where we have the relationship with health care professional, where we can go and demand prescriptions.

Let me spend 2 minutes on what we are trying to talk about Sanzyme and Azmarda. From an opportunity perspective, INR 2,000 crore market in India, probiotic, where we hold 7.5% market share in the form of Sporlac, which is mass probiotic and equally class probiotic, Lobun and Oxalo, which is basically more in lieu of halting the progress of chronic kidney disease. That is what we have acquired. We have got a lot of synergies as we see from a prescriber base. Nephrology as a specialty is close to us. JBCP mass probiotic, we can enhance our presence.

Life cycle management is a tremendous opportunity when we look at Sporlac as a brand, INR 2,000 crore market, mass probiotic, INR 500 crore market opportunity for liquid robotics, where we don't have today the formulation. So eventually, we'll see some new line extensions from us in the form of liquid formulation for probiotic. Equally, some of the geographies where J.B. as a company has got dominant presence, if I have to talk about UP, Bengal, Kerala, where 40% of our business comes. There, Sanzyme as an asset is underleveraged, underpenetrated. So this is a perfect opportunity for us in terms of how we can increase our foothold and at least look at doubling our market share and look at how we can get the prescription from the specialty.

Coming to Azmarda. This, according to me, is a disease of next decade when we talk of heart failure. 12 million to 15 million patients suffering from heart failure in India, and only 10% to 15% of population is today getting treated maybe because of the cost of therapy, maybe because of the diagnosis being not done.

Last week, I was in Delhi attending CME from -- with -- among top cardiologists, nephrologists, diabetologists of the country, and they are putting some consensus as guidelines in terms of what can be done in the world of hypertension and heart failure. And the theme which came out, which conceptually we want to work is, to prevent progression of hypertension to heart failure. And we are perfectly poised with our brands like Nicardia, Cilacar and now Azmarda in terms of how we can influence the ecosystem and work towards how a patient can be well treated, how we can influence the ecosystem and look at how more diagnosis can be facilitated. By the way, this product goes off-patent in November, December. And you will see 50 companies coming with this combination of sacubitril/valsartan, but we have got 6 to 8 months where we are looking at how we can at least look at better medico-marketing presence, look at in terms of how we can improve our spread of prescription. That is attention going ahead.

Sanzyme, I've spoken. Azmarda also, I've spoken. So 15 months ago, when we shared with you our strategy deck in terms of where we were. Today, we are talking where we are and where we want to be. We were 32nd ranked company. Today, we are in top 25, the fastest-growing company in Indian pharma market have been ranks. We want to be in top 20 companies, backed up by the work that we want to do organically, continue to deliver market-beating performance, looking at inorganic assets. We'll not be shying away in terms of -- if there are opportunities which are coming on the table, which are more synergistic to the work that we do in the therapies where we are present and not putting stress on our balance sheet.

Also, if you get the contribution which is coming from India business, which is close to 50%, we are looking at how does that contribution go to 60%. And eventually, within that 60% business of domestic business, we are looking at how does the chronic division go up. That is what -- is the task that we have taken, 5 brands with top 300. The way I look at in the next 8 to 12 months, we should have Sporlac, equally Azmarda, as the new entrant in top 300. And that is why at least we have got into the world of acquisition of these brands.

New launches has been -- has been not a great story for J.B. for the last 5 years, but eventually now, we have got into some new categories of business with reorganization, optimizing our resources and the initial signs in terms of what we see from 1.5% of the contribution has come to 4%. And going ahead, we would like to inch up this contribution and look at how do we at least get more into progressive categories of business, be it pediatrics, respiratory, metabolics, diuretics. That is what I said earlier.

Specialty focus. We were more a JBCP company. We were close to physicians for hypertension, but now we are looking at with heart failure focus with what we want to do in the world of hypertension, diuretics, how can we come close better to cardiologist, what we can do with respiratory specialist, diabetologist so that especially focused, we want to do in metro and Tier 1 town of the country in terms of the prescription for our progressive SKUs and equally look at what we can do with our legacy product in the world of channel.

I spoke about purpose and productivity in terms of where we stand, where we were, where we are and where we want to be, close to INR 3.5 lakh per person productivity, where we were in FY '18. Today, we stand to INR 5.5 lakh. Eventually, we want to get into a bracket of INR 6 lakh to INR 8 lakh, but it's a journey. That is what we want to travel.

More talking about -- because whenever we talk to you, people have been complaining that you don't talk more about what is happening in the international market where J.B. is present. So outside India, if I have to talk about before coming into the performance, let me put this slide in terms of where we are present. Outside India, our home markets are South Africa and Russia. South Africa, close to INR 300 crores business, 50 employees. We are known as Biotech there. We own a 100% subsidiary. It's a combination of public and private play. Obviously, the public margins are thin. Private market, we are looking at how does the contribution going -- go up. It's a generic play for us in South Africa.

Russia, overall, we have got around 10 brands which we market. It's a brand barrier market in terms of when you look at not easy to get product registered, but we are fortunate, close to around $20 million business, which we'll talk in detail in terms of the geopolitical issues, what are we trying to do in terms of looking at the guarded approach that we are looking at, how do we take this Russia and CIS presence ahead.

Outside these 2 home markets, we are present in 40 countries. That is what we call our ROW business, which is a combination of 4 clusters, Sub-Sahara Africa, Latin America, Southeast Asia, and South -- and Middle East. That is where we stand, and this is more a distributed-led model. We work with distributors and they have representatives who work for J.B., who work for companies to put together. And equally, we have got some presence in U.S. We own 15 ANDAs, close to $30 million business.

U.S. business, the way we are looking at going ahead, our run rate been 1 to 2 ANDAs that we've been filing every year. Going ahead, we look at -- we will look at filing 8 to 10 ANDAs in the next couple of years, which will be a combination of low-volume, high value and niche competition. And this is backed up by the work that we are trying to do in the world of API. We have much of the API that we manufacture will help us to be cost-competitive in U.S. market, as you all know, that there's a price erosion, this risk, which always we face in the world of U.S. market. That is where we stand. These are the cluster of business where we are.

Just to share once again overall the performance, we could bounce back in quarter 4, backed up by some of the geographies in [ BGS ] market, equally South Africa. We are now today 15th ranked company, growing at a pace of 20% plus as compared to single-digit market growth. And from a perspective of CMO business, where we work with some of our big partners, there, we could see better demand coming in. And eventually, for next year also, we see at least this business will help us in terms of driving the volume growth.

Outside India business, if I have to talk about one thing which we feel price in terms of the work that we have done over a period of time and the relationship that we enjoy with some of the big multinational players, be it Procter & Gamble, Johnson & Johnson, Reckitt [ Corp ] in South Africa, where we closely work with them. And this relationship has been longstanding of last 2 to 3 decades in terms of where we stand, and this is majorly dominated by the work that we do in the world of lozenges. And lozenges business for us, we are the fifth largest manufacturer of lozenges globally. Though up until now, we have been present in the world of cough and cold, but the agenda going ahead is to widen our offering, get into the world of immunity, wellness, acid peptic disorders, oral thrush. So those proof of concepts, we are developing.

And equally, look at how we can add more partners. So this according to me, when we have the capability, when we have that capacity in terms of how this business can become big, this business is close to $30 million for us with good gross margin. We are looking at how you can double, triple this business in the coming time.

So this was a quick presentation from my end in terms of the scorecard of last 15 months, how we have performed. And equally, the strategies that we had laid down 15 months ago, where do we stand today and some glimpse of what we want to do in the coming time. From here, I would like to invite Lakshay's Kataria to talk more about financial details in terms of how we have performed in last quarter and annually. Thank you.

[Lakshay Kataria, executive]

Thank you, Nikhil. Am I audible?

[Nikhil Chopra, executive]

Yes.

[Lakshay Kataria, executive]

A very good afternoon to all of you. So what I'm going to do in the next couple of minutes is talk you through our financial performance for quarter 4 and for last

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where are we going from a business perspective. So there is a noncash ESOP cost that has now become a part of EBITDA. So if you sort of add back and also add back some of the onetime costs, you're aware we -- in the last 1 quarter, we closed 2 acquisitions. So they were costs related to transition, transaction, advisory cost. So if you sort of add those back, the adjusted EBITDA for the quarter will be about INR 164 crores and for the year at INR 634 crores.

In terms of percentages, it's pretty close to the guidance we've been giving you every quarter. If I look at year-on-year growth from a quarter 4 perspective, we were at INR 124 crores same quarter last year. So underlying EBITDA is about INR 164 crore. And for the year against INR 560 crores, we're reporting about INR 634 crores. And like Nikhil said, I think the endeavor has been to be close to our guidance and also sort of balance all the headwinds we are seeing in our operating ecosystem but also investing for growth.

So I think as we move forward, that is going to be the journey. We will sort of invest for growth and we do get questions in terms of our OpEx trends and how some underlying expenses, but it's a very considerate choice of balancing growth -- long-term growth and the places where we want to invest, yes.

So from a perspective of -- a little bit more color. So in terms of how things have moved, EBITDA, I talked about 32% growth over last year for the quarter, 13% during the year. Gross margins, as you've seen across the industry, have seen no intrinsic dilution, right?

Cost pressures have caught up with everybody, whether it's the freight cost, whether it's raw materials, packing materials, whether it's power and fuel. I think across the industry, we have seen those spike up. We are also sort of not untouched. We are also seeing those challenges. But I think through a mix of pricing, through a mix of cost initiatives, efficiency projects that we are driving, we've been, I think, able to do a good job in terms of holding close to 64%, 65%, if you see various quarters during the year. And overall, for the year, we ended closer to 65% gross margin. Our operational expenses have sort of stabilized. If you adjust for the acquisition-related expenses and the acquisition we made quarter-on-quarter, largely, the operational expenses were stabilized.

PAT, I would explain in a little bit more detail in one of the slides. But basically, I think 2 things have happened on the PAT development year-on-year for us. One, we had certain one-offs last year to the tune of about INR 40 crores to INR 50 crores. So those one-offs have sort of gone off. And also, as we have invested for growth and acquired businesses, the treasury income also goes away, right? So that's the reason you don't see the fall-through of EBITDA into the PAT line. So I'll probably explain you a little more on the underlying trends in a subsequent slide.

Yes. So these are the reported numbers, not much to talk beyond what I've already done. Tax rate, again closer to 25% for the year, a little bit lower this quarter because we sold certain mutual funds. The tax -- the effective tax rate is lower. So we've got that benefit during the quarter. Otherwise, not much to sort of add on the numbers.

Yes. A little bit on the cash flow. So what you basically see is what we've reported as cash from operations is about INR 170 crores. I just want to explain it's not actually the real performance of the business because we've had substantial investments. One, in the brand acquisitions, we had to pay a fairly substantial amount of GST, right, on the brands we brought. In addition to ensure continuity of supply and continuity of our business operations, we've chosen to invest in our supply chain, be it in terms of vendor advances, inventories, certain part of trade receivables to make sure our businesses are not disrupted. So that's sort of a conscious decision by choice. So a fair bit of this INR 300 crores that you see going in working capital is actually attributable to PAT and not to the underlying business.

So overall, from a cash perspective, we've generated about INR 30 crores roughly during the year. And by and large, as we had explained earlier in one of the calls, most of the cash flow was used up for the acquisition of Sanzyme business.

So we move on. So a little bit glimpse of -- if you see over the larger period, how have we sort of been faring. So if you look at our revenue trajectory, right, there is a CAGR of 14%. So from INR 1,400 crores to INR 2,400 crores in a matter of 4 years, which is a CAGR of 14% to 15%. And within that, if you look at our domestic business, we've almost doubled over the last 4 years, right, from INR 588 crores to INR 1,170 crore. And if you see, more than 70% of that is getting added in the last 2 years, right? So I think a fair bit of acceleration seen by the business, as Nikhil explained, in the last 2 years.

Similarly, on the international side, INR 800 crore business 4 years ago, this year at about INR 1,250 crore. And here again, if you see the trajectory, right, out of the INR 400-odd crore, INR 300 crore has got added last 2 years, right? So I think both businesses are sort of seeing resilient performance, strong performance.

Coming to the financials. If you look at our reported EBITDA, it's 26% growth. But like I explained earlier, this has certain one-offs related to acquisition. It has a noncash cost put into ESOP. If you nullify for that, it's a 30% sort of a CAGR over the last 4 years.

From a PAT perspective, if you really look at the trajectory, we were making little less than INR 150 crores 4 years ago. Last year, we reported INR 450 crore, but there was an underlying one-off. So net that, it would be about INR 410 crore. And this year, while we've reported INR 386 crores, if you add back the noncash and the acquisition-related expenses, the underlying trajectory actually for PAT also continues to be fairly strong, right? So INR 139 crore to about INR 450 crore would have seen you at about again 30% plus, yes.

I think that's my last slide. I'll probably hand it back to Nikhil again for his closing comments.

[Nikhil Chopra, executive]

So overall, I think people would be obviously having a lot of questions in terms of the growth that we have been showing. And equally from where we come from an EBITDA margin perspective, we'll be more than happy to answer those questions in our Q&A forum. And thank you, Lakshay, for detailing the financials.

Now coming to the second part of the agenda in terms what we want to talk to you, setting the context in terms of how and what we, as a company, has been known as. So when I joined this company, obviously, we are listed as a company called J.B. Chemical and Pharmaceutical Limited. So people have been asking whether you are a chemical company. What are you trying to do in formulation? You have to give them answer. India business, when we had launched 4 years ago 3, 4 divisions, we were called Unique Pharmaceuticals. What is Unique Pharmaceuticals? Then you talk about Russia, OOO UPL, third name. You talk about South Africa, you are called Biotech, fourth name. Last 2 years, we have been calling ourselves JBCPL, some of you would be doing.

So it's -- the brands in the company have a better identity as compared to the company identity. That is what we felt in last 12 to 18 months. And we would have done this exercise 12, 18 months ago, but we thought at the right time, regularly communicating and talking to all of you and the journey that we have traveled in terms of where we stand today, and I think you people also have better visibility in terms of understanding the company better. We have been working for the last 6 to 8 months in task of getting the right identity in place, which I think is a good starting point. And company identity building over a period of time, talking more about corporate is a journey. That is what I believe and that is what I have practiced in my previous organization.

So here, it's a good starting point, where we think today at least J.B. Chemical and Pharmaceutical as a company has been spoken around. At least doctors know us. So we thought why not to use this opportunity and come with a new identity, which is not that different to where we stand but close and at least looking at from a perspective of what we want to be known as. So we are not changing our identity on the stock exchange, but we are now getting into a new branding of what we should be known as and how we will talk about ourselves in the coming time.

So at this moment of time, I would ask my audiovisual team to have our corporate identity video, which I think will talk about itself. And then let me come back and at least talk to you in terms of how do I feel about the new identity.

[Presentation]

[Jason D'Souza, executive]

And friends, this is our new identity, J.B., good people for good health. We had a media conference a couple of hours ago and we said why not also show this entire new identity and all this lovely setup for the analysts also. And thus, you all also got a privilege to kind of witness it.

With this, I would like to just invite the management just for a few minutes just as a token to stand on stage, and then we will go to the Q&A. Please, Dilip, Kunal. And in the meantime, we'll also be ready for the Q&A. We'll just have this very quickly done. As you know, there are more than 250 people online also watching us. So it is important that they also get a glimpse of this wonderful event, along with the results that have just been announced. So we're going to keep this short and sweet, and that's it. Thank you.

So as this logo goes on -- goes behind, we'll request the management to come on stage for the Q&A, and we'll start the Q&A in just a couple of minutes. May I request Nikhil, Lakshay, Kunal to please come on stage. And I think we can now dim the lights because I can't see anyone in case they have to ask some questions. So I think we can begin with the Q&A and first, the opportunity for the physical audience. So anyone who would like to ask a question, please raise your hand. Yes, please. Please go ahead, the lady -- sorry, why don't you just stand up? Can you just give a mic here, please? The lady in the black.

[Rashmi Sancheti, analyst]

This is Rashmi from Dolat Capital. My question is related to Azmarda. Since it is going to become off-patent in Jan '23 and we will see that 50 companies will enter into this category. And for next 6, 7 months, we have time to penetrate in the market as well. So your -- what would be cost that would be associated to it? And will it impact operating margin? And also, are you expecting that when many companies come into the picture, whether it is going to expand the overall market? Because the penetration for this particular product in our country is pretty low.

[Unknown Executive]

Can you hear me?

[Rashmi Sancheti, analyst]

Yes.

[Unknown Executive]

So like Nikhil mentioned, we have invested in a therapy which is quite progressive. And we believe just like what we saw over the last 2 decades, what happened with the lipids and statins, the next 2 decades are about heart failure. Just to give you some broad numbers, we are talking about heart failure of 15 million patients, 10% to 15% only under treatment. And the key inhibitors out here are cost of treatment as well as the fact that there is limited awareness about therapy since this molecule was only launched 3 years back.

Going forward, certainly, the competition is going to intensify. There are no two ways about it. However, having said that, if you see what's happened in the Indian market over the last 4 years, whenever a molecule has gone off-patent, be it ticagrelor, be it vildagliptin, in most cases, the volumes have actually gone up 3x, which have actually helped neutralize any price impact because as the affordability kind of becomes better, the ability of prescribers to make it available to more number of patients given the actual prevalence becomes much more easier and accessible. So we also certainly believe given heart failure is going to be a very chronic serious indication, which is going to impact the population, there is no reason why the volumes are not going to go up 2, 2.5x post LOE within a 2- to 3-year horizon. And brands who enjoy exclusivity during the pre-LOE phase certainly are able to retain their market share.

The second important point out here is from a pure financial and margin standpoint, post-LOE, of course, we will have the flexibility of sourcing this domestically and localized. Because right now, because of our arrangement with Novartis, we are kind of importing the drug and therefore dealing with a limited gross margin profile, which significantly improves and kind of neutralizes any price impact, which is going to happen post LOE. The first 6 months are certainly investment-led growth. It does not impact our overall EBITDA situation in any way, but we certainly believe post LOE, this is a good margin-accretive opportunity for us.

[Rashmi Sancheti, analyst]

Okay. And my second question is related to the CMO segment. We are expecting a very strong traction in this particular segment, and that is the reason you're adding customers as well as new product launches. Could you just broadly give an idea which geographies are in -- currently we are in? And whether we are just launching cough and cold segment or there are other products which we are targeting?

[Nikhil Chopra, executive]

So as I spoke, I think what we are getting into is to go beyond cough and cold. And there are novel of proof of concepts which have been developed more in the world of immunity, wellness, sleep disorders. And the geographies that we are present is a mix of Russia, South Africa, Southeast Asia, Australia and New Zealand. And the sweet spot, if I would talk about our CMO business, is both from a capacity point of view and a capability point of view. We are rightly placed.

And we are not just a dormant CDMO partner. We actively participate with all these big companies periodically to get to know about the market happenings, equally participate in brainstorming with their teams, look at how conceptually we could be delivering better drug delivery, how conceptually we can be cost-competitive and widen our portfolio depending upon what is the demand for the new products coming in. So this business according to me has all the right elements the way we are placed. And with good gross margin, we are looking at least how do we make the best out of this opportunity that we have got in place.

[Jason D'Souza, executive]

Is there another question? We have some senior pharma analysts, Anubhav, [ Prashant ], why don't you go ahead, please?

[Tausif Shaikh, analyst]

Me?

[Jason D'Souza, executive]

Yes. Go ahead, go ahead, please.

[Tausif Shaikh, analyst]

This is Tausif Shaikh from BNP Paribas. Sir, congratulations on a good set of numbers in a very challenging environment. My question is mostly to Nikhil, sir, about India business. So where would you like to see your India business the next 2, 3, 5 years? And what were the key drivers and how many MRs you plan to add in FY '23 and '24?

And also, if you can give the update on respiratory division, like how big it is for India and what are your plans, because you have a string of handling Cipla inhaler and you are very good at it. So do you plan to enter any device-related respiratory products going ahead?

[Nikhil Chopra, executive]

First of all, we don't want to get into the world of inhalation. I think there are enough companies who can do justice to the portfolio that they have got. But there are selective opportunities in the field of respiratory more in the world of lung fibrosis, pulmonary hypertension, mucolytic agents, anti-allergics. There, we have launched the products. Still, the revenues are not up to that level because it has been a 6-month journey only, but we are seeing enough traction of prescription. That is what I can share at this moment of time.

On India business, as I shared in terms of where we stand today, 23rd ranked company, close to 1% market share, gained 9 ranks with the combination of J.B. Sanzyme and Azmarda. Obviously, the entire hypothesis of the way we look at growth is what I spoke. The big brands have to get bigger because this big -- when I talk of these big brands, I think one point also has to be considered that we have got a dominant presence with 50% to 85% market share in these big brands. So we conceptually have to drive the ecosystem in terms of how more and more number of patients suffering from hypertension or what work we are trying to do in the world of GI disorders will only help us to drive market-beating performance with a combination of organic work that we are doing and delivering market-beating performance. And in the form of inorganic assets that we have got, we obviously want to be in top 20. That is where we stand. I have answered your questions.

[Tausif Shaikh, analyst]

What about MRs?

[Nikhil Chopra, executive]

So MRs, we don't -- today, we have got a mix of 2,500 people when we look at all the 3 entities. So in near future, we don't intend to add any MRs. We are looking at how do we drive better productivity. That is what -- is the intention going ahead. And with all the process and systems that we have put in place, getting the world of sales force excellence, sales force automation, optimizing our resources, digital marketing, patient initiative programs, I think we have enough opportunities with 2,500 people on the ground.

[Amar Maurya, analyst]

This is Amar from AlfAccurate. Sir, my question is primarily on the Sanzyme acquisition. Can you help us understand like what would the revenue for FY '22 for Sanzyme and what would be the margin?

And secondly, what would be your target for Sanzyme, let's say, in 3 years both from the revenue and the margin perspective?

[Nikhil Chopra, executive]

So FY '22, the revenue was almost negligible. It was first 2 months of our operation. We were more into the integration part of Sanzyme business. We have acquired this business where the revenues were close to INR 140 crores with a good gross margin of 70%. More than getting to the revenue aspect, let me talk about the way we see this business what I spoke. We have got 3 big brands, first being like close to INR 60 crores brand, where we hold 7.5% market share, fifth largest player, growing at around 8%, 9% as compared to market growth of around 14%. Of course, we would like to at least deliver market bidding growth. That is what if we are doing a J.B., why not to intend to do the same for Sanzyme portfolio?

Equally, if we look at as a brand, enough opportunity in terms of the geographies where Sanzyme as an entity, is under leverage, what I spoke in markets like UP, Bihar, Bengal, Kerala, where we have got dominance present from J.B.. And third, enough opportunity in terms of doing life cycle management, getting into new portfolio, getting into lipid probiotic. That is what we would like to do for as a brand, and you should see us in the next 8 to 10 months, this brand, we want to get featured into top 300.

Coming to class probiotic, if I have to talk about, where we have got a couple of brands with -- with a name brand name, where the revenues are close to INR 40 crores. There, we see huge opportunity because nephrologist as a specialty is very close to J.B. with what fundamental work we have done over a period of time. And these 2 products basically halts the progression of chronic kidney disease, that is what is indicated. And these 2 products have enough evidence in terms of when we go in detail in the clinic of nephrologist, we meet close to 2,000 nephrologists and there are 1,400 nephrologists who are doing prescriptions to J.B. So that is the trend that we enjoy.

So from a perspective of opportunity, not getting into where do we see 3 years from here. But I think if you can look at from a opportunity, geography and footprint opportunity, life cycle management opportunity for mass probiotic. And equally, the work that we want to do in the realm of probotic, we constantly are better poised in terms of climbing our rank fifth largest company in probiotic. We want to be in top 3. We want to deliver market bidding growth. And at some given time, see in top 3 of it.

[Unknown Analyst]

My context to ask this question was like in 2017, Sanzyme individually used to do INR 230 crores kind of a revenue with a 28%, 29% kind of EBITDA margin. So my context to understand is that do we see that at least in 3 to 4 years, we can reach the historic level of Sanzyme?

[Nikhil Chopra, executive]

I think we should do better. That is what I can say. That is -- what commentary I have given in terms of when you look at qualitative aspect and outside -- and, we also have a portfolio, which is more into female health care, more into the world of infertility. So eventually, this asset when we saw was, I mean, confined present. Now we are looking at how do we improve the breadth, go more wide and at least bring a lot of discipline in the work, which has to happen in the clinic of health care professionals what we have done in last couple of years at J.B. Yes.

[Jason D'Souza, executive]

We'll take the next question. I see a hand going there. Yes, go ahead, Nithya.

[Kunal Khanna, executive]

To clarify one point out here with respect to Sanzyme, what we have acquired is the domestic brand sales, right? There is a separate contract manufacturing business and some part of exports, which does not form part of this consideration. So I just wanted to clarify that part with you because some of the numbers which you're kind of putting across may have that element as well.

[Jason D'Souza, executive]

Thanks, Kunal. Nithya, the next question -- [Operator Instructions] Nithya, go ahead.

[Unknown Analyst]

Nita from Bernstein. Nikhil, if you can tell us a little bit about your trade generics foray in India. Why now? Why does it make more sense now? What kind of therapeutic categories are you looking at? And one concern is do you see this as expanding the market itself? Or is there a threat that it might cannibalize your branded generics?

[Nikhil Chopra, executive]

So we had -- Nithya, we had less than 5% of portfolio, which was not . It was more in the world of cough-and-cold pain. So that is what we have shifted to trade generics and trade generics, as you know, is a big market opportunity. Though margins are thin. But if you get some good critical mass of patients who are consuming and then you get into the brands that you can create in the world of trade generics and some of the organization has done, the opportunity comes in.

And from a perspective of we are not looking at launching products which conceptually will cannibalize the presence in the prescription market. That is not the intention. And we are not looking at that business to go in terms of high value. We have got good portfolio existing, and we have launched some of the SKUs, which is more into acute, more into cough and cold, more into pain more of the legacy products, which were not on the prescript from other doctors. So that is what we saw as an opportunity. And this business still is a single-digit contribution which is coming to India business. Yes.

[Unknown Analyst]

We'll see that becoming meaningful and...

[Nikhil Chopra, executive]

Not that meaningful. I think we have enough opportunities that I've been speaking in terms of what we have got in terms of what we have acquired, whether we talk of Sanzyme, we talk Azmarda or the new launches that we have come with.

[Unknown Analyst]

Got it. One last one on capital allocation. So when you look at the various markets that you're presenting, why does it make sense to continue investing in the U.S. given all the competitive intensity we are seeing? The fact that price erosion is not away any time, anywhere soon, why invest in the U.S. at all?

[Nikhil Chopra, executive]

So let me start, and then Kunal, you can come in, in terms of -- see, the U.S. model for us is a very different model. It's cost-plus model. We are not directly present in U.S. We have been holding 15 ANDAs and some of the ANDAs that we hold, we have a backward integration of the APIs that we manufacture. We've been filing 1 to 2 ANDAs. Now close to $30 million business that we do in U.S. It is not that we are investing that big capital, and we want to be a $200 million company. That is not the intention going ahead. But we have identified some opportunities in terms of the technologies that we have got, whether we talk of orals technology, we talk of laser drill technology where J.B. plays a bigger role.

And the products that we have identified are low volume, high-value, niche competition, API-backward integration. So we don't want to get into $200 million, $300 million business where you start getting the pressure of price erosion, but we might test ourselves, is it that this we can do? And that is how we have enhanced our R&D expansion. Our R&D spend are still sub 2%. So it does not make that big impact in terms of when we look at from an EBITDA perspective. Kunal, anything you like to add?

[Kunal Khanna, executive]

Just I think very similar thoughts out there. I think what we are trying to do is make maximum use of the infrastructure, which we have in hand, right? We are a fairly large player on the orals platform. We have seen very good success with very limited products which we have launched. And our approach of selecting the products also, which are going to come through over the next 18, 24 months is to leverage on the platform, which we have and be very sure of the execution capabilities. So we are kind of pursuing assets which we know, we can execute very well from a development and manufacturing standpoint and it's a selective stage gate approach as has always maintained, right?

So nowhere are we committing to specialty, nowhere are we saying we are doubling or tripling our R&D spend. As we see success in a very gradual and selective way, we will want to kind of pursue more assets if we believe it makes sense for us.

[Jason D'Souza, executive]

We'll just take a question from the online audience, and then we'll come back to you, Cyndrella. Yes. Operator, you can go ahead and unmute the online audience. I guess if that's not happening, we have a question on the chat box. I think clearly, one question which is coming from Rahul is that, what about the operating margins that you're seeing going ahead in the next year?

[Lakshay Kataria, executive]

Yes. So I think if you look at our operating margins for the quarter in the range of about 25.5%, 26%. The way we are looking at the next 1 year and the visibility we have, we see our operating EBITDA in the range of 24% to 26%, depending on a lot of dynamics at play right now, but that's the visibility we. I think from our perspective, 2 or 3 critical things to make sure our EBITDA trajectory continues to be strong is, one, managing this uncertainty on the supply chain front where Kunal and his team are driving a lot of initiatives to make sure our costs are under control. And we manage this inflation well.

Second, we will be looking at a lot of pricing initiatives wherever there is an opportunity to maximize on pricing. That is another opportunity from a profitability perspective. And last, while we continue to invest for growth, Nikhil, Kunal talked about Azmarda, Sanzyme, we'll invest. But on rest part of our expenditure, we'll be fairly disciplined, right? So I think a combination of these 3 should help us make sure we are closer to our long-term guidance in the operating EBITDA.

[Jason D'Souza, executive]

Thanks, Lakshay. Yes, I will just check once again on the online audience.

[Operator]

We have the question from Mr. Ranvir Singh.

[Ranvir Singh, analyst]

Yes. My audio was disconnected for. So maybe you might have explained it, but just at a cost of repetition. Just wanted to understand that in Q1, was there any contribution of Sanzyme and is contracted?

[Kunal Khanna, executive]

I guess the question is referring to Q4, right, of the financial year?

[Ranvir Singh, analyst]

Yes, yes.

[Kunal Khanna, executive]

Yes. So I think Nikhil alluded to that fact. We had 2 months of revenues taking in, but Feb and March generally tend to be extremely soft. So the contribution from the Sanzyme portfolio was nominal. And if we are trying to understand the fact that India market IPM grew at 10% versus J.B. growing at 30% how much does Sanzyme. To make things much more clearer, even without Sanzyme portfolio, our growth would have been market beating, and we would have been easily 20% upwards. So organically also without that portfolio, we would have had almost 20% plus growth.

[Nikhil Chopra, executive]

I think you had one more question in terms of what was the CMO uptake. So CMO, we had some good orders in terms of not quarter 2 and quarter 3 were not rate much, but quarter 4, we could see the demand coming back, but it was one-off in terms of what demand came for the CO business. But eventually, we see some robust order book for the coming year because that business the -- some of the geographies, particularly Southeast Asia, Russia, Canada, Austria and New Zealand, where we have been working closely with our partners, there, we see robust order book going ahead. But if you look at stand-alone quarter 4, the figures were uphill, which would not be the run rate going ahead. So that is what we want to clarify.

[Jason D'Souza, executive]

We'll take another question from...

[Ranvir Singh, analyst]

Okay. 17 product.

[Jason D'Souza, executive]

Yes, go ahead. Go ahead, Ranvir.

[Ranvir Singh, analyst]

Yes. Yes. So 17 products launches include that Sanzyme and -- that we have acquired?

[Nikhil Chopra, executive]

Sanzyme and Azmarda are outside those 17 products. And I shared that we have launched new products in the world of pediatrics, respiratory, metabolics, cardiology. That is what we have done.

[Jason D'Souza, executive]

Thanks, Nikhil.

[Ranvir Singh, analyst]

Just last one -- excuse.

[Nikhil Chopra, executive]

Yes, please continue.

[Ranvir Singh, analyst]

Yes, yes. So it seems that Metro sales has significantly come down. Can you confirm this?

[Nikhil Chopra, executive]

What sales?

[Kunal Khanna, executive]

Are you referring Metrogyl? Metrogyl sales have come down is the question.

[Ranvir Singh, analyst]

Yes. Metrogyl in Q4.

[Nikhil Chopra, executive]

It is more a seasonal trend. Overall, I think Metrogyl, we continue to deliver market beating growth and Metrogyl is a combination of 200, 400-milligram tablets. And equally, we have 10 preparations topical in the field of Metrogyl. So Metrogyl, 200, 400-milligram and IV are more seasonal dependent. But equally, the topical preparations that we have got maybe Metrogyl, Metrogyl P, Metrogyl Gel, Metrogyl, there are different formulations, which continue to grow.

[Jason D'Souza, executive]

We'll take the next question online and then we'll come back to the physical audience. Go ahead, Diskha.

[Operator]

We have the next online question from the line of Aditya Khemka from InCred.

[Aditya Khemka, analyst]

I just need to understand the capital allocation. I know this question has been answered once, but I will try to ask it from a different perspective. So when you do your capital budgeting for the U.S., you consider R&D costs, you consider material costs that you will incur, this is obviously product dependent and working capital investments. Capacity, I understand you already have so you're trying to utilize that. Do you get a return on capital after investing in that investment of more than 15%? Because most of your peers who are present in U.S. and maybe 20, 30, 40x your sales and also your peers were only 2 to 3x your sales. None of them seem to be beating cost of capital in the U.S.?

[Lakshay Kataria, executive]

I'll try and address that. So from a U.S. perspective, one, like Nikhil said, it's not a very large piece, right? It's a $30 million business. And our model is different. We work with front-end partners, right? And in that sense, from a capital employed perspective, it's not a significant sort of drawn our cash resources, right? So we do make a decent amount of return on capital. If you look at last year as an organization after sort of netting off the acquisitions and the noncash expensive ROC would still be upwards of 35%. So I think that should address your question.

[Jason D'Souza, executive]

Thank you. The next question -- sorry, go ahead. Go ahead,. Aditya -- are you -- do you have another question follow-up?

[Aditya Khemka, analyst]

Yes, I do.

[Jason D'Souza, executive]

Go ahead.

[Aditya Khemka, analyst]

Just on that, I would just like to again question you on that because what is the secret sauce that we are using to do more than cost of capital in U.S. because one of your peers seems to be able to do that? I just want to understand what is the recipe to success that we currently have and how do we believe what makes us believe that we will be able to do what none of the others in India seem to be able to achieve? What is the competitive advantage the right to win?

[Kunal Khanna, executive]

I think as far as U.S. is concerned, so far, the only thing we'll maintain is the recipe to success is being extremely guarded and conservative right. That's the major difference between us and some of our peers. We are not kind of anywhere pursuing a strategy, which disproportionately increases our revenue mix of balance in favor of international markets and particularly U.S. Nikhil mentioned very clearly that 70% of our time investment, bandwidth, capital allocation is going to go for the domestic franchise.

What we are trying to do out there is we believe we have infrastructure resources in hand, how do we maximize that and have a very, very selective play to maximize that opportunity.

[Jason D'Souza, executive]

Thanks, Aditya. Next question -- I think Aditya has lost. Cyndrella, go ahead, you have a question?

[Cyndrella Carvalho, analyst]

Yes. Cyndrella here from JM Financial. I want to understand your M&A strategy going ahead. Given that we have acquired a few already in India, what is the focus? How should we look at it? And overall, how should we look at the entire growth aspect going ahead? What would be the key driver also? From an M&A perspective, how much kind of traction we should expect?

[Nikhil Chopra, executive]

So from an M&A perspective, we will continue to evaluate assets, which are more in synergy to where we want to play and win. We don't want to create unnecessary stress on the balance sheet. That is not the intention. We don't want to chase mad valuations. That is what we don't want to do. We will look at if there are brands available, which are complementing the categories where we are present, we'll obviously pursue that. That is what we want to do going ahead.

I am a big fan of volume growth, if I talk about growth. Obviously, this year, we are getting benefit of price growth in the country, but that may not be sustainable for long term. And with 1.3 billion population, huge opportunity, what I spoke in terms of where we are placed as a company, in the world of hypertension now, in the world of heart failure, in the world of probiotics. So we'll continue to drive volume growth from our organic business. Obviously, you will see new introductions, which should contribute around 4% to 5% to our growth. And the assets that we are -- that we have acquired, which today are not going as per the way market is growing.

First of all, we want to get into a market-beating performance. The probiotic market is growing at 14%. We are -- we -- as I said, when we acquired it is growing at around 8% to 9%. We would like to get into a growth of 15% to 16% in the coming time with the integration fundamental work which has been done, and Kunal spoke about the opportunity that we have in the world of Azmarda with only 10% to 15% of -- 10 million to 15 million patients suffering from heart failure are really getting treated. And when the product goes off-patent, you will be seeing 30, 40, 50 companies coming in, the cost of therapy will come down, more diagnosis will be done -- will be done for the patients who are suffering from heart failure. So both the assets that we have acquired, I think touchwood, we have bought at a good price. We are looking at those assets to fuel the growth in the coming time. And we have got the right teams in place. That is how I see growth going ahead.

[Cyndrella Carvalho, analyst]

Any external acquisitions that you're looking at?

[Nikhil Chopra, executive]

There are a couple of opportunities as and when it comes -- there are 1 or 2 opportunities in the world of South Africa, where it's more a generic play. But as and when it comes, we'll be able to add more color.

[Cyndrella Carvalho, analyst]

Just a couple of more questions. In terms of the recent acquisitions, how should we look at the impact or what we will carry on the gross margins and on the depreciation side for the coming year?

[Lakshay Kataria, executive]

Yes, I'll take that. So from a depreciation perspective, there'll be impact of about INR 35 crores to INR 40 crores a year. We'll be amortizing these brands over 25 years, yes. So that's first part. From a gross margin perspective, like Kunal explained earlier, Sanzyme is accretive. It makes 70% plus gross margin. So that's an accretive acquisition. Azmarda, for the next fiscal because we are mostly importing, will have a lower gross margin. But as it comes out as we move into domestic sourcing, the gross margins will get better.

[Cyndrella Carvalho, analyst]

And if we look at overall business from an India perspective, should we be able to grow it much faster with these acquisitions now? And I mean, would we be able to double it sooner than expected earlier?

[Nikhil Chopra, executive]

Without the acquisition, also, we were growing faster than the market. So eventually, with the acquisitions and with the right integration happening, I think you should see us doing better touchwood in the...

[Cyndrella Carvalho, analyst]

Within 3 years, doubling?

[Nikhil Chopra, executive]

Not -- see, I don't want to get into any speculation of 3 years or 5 years, but at elast what we intend to do is to deliver market-beating performance, which we have done in last 3, 4 quarters. And we have got enough things on the table in terms of the levers of growth where we have been present in the categories, where we continue to remain focused and we continue to remain a dominant player. And if you are able to continue to do the good work in terms of influencing the ecosystem. That is what we believe in. It is not that we have launched new products and just getting into the clinic of doctor and detailing the products but does not help because the competition outside is intense, particularly in chronic therapy.

So we will continue to remain focused. We'll continue to look at the categories in at what I've spoken about cardiometabolics, pediatrics, respiratory, gastroenterology where we are present and continue to have continuous training to our field force, get more discipline, look at how they are motivated and charge and look at how significantly we grow better than the market. I think market should go at around 8% to 12%. And we will look at it is how do we deliver market-beating performance and eventually get into top 20.

[Cyndrella Carvalho, analyst]

Great. One more on the backward integration. We spoke around the backward integration portfolio for our U.S. market. When it comes to India, how should we look at it? And given that there has been raw material and supply challenges. So how should we look at our strategy on the backward integration for India?

[Kunal Khanna, executive]

With respect to Indian market, one has a lot of options available through B2B sourcing, right? So we don't necessarily want to put stress on our infrastructure to do kind of backward sourcing of APIs and all. Because ultimately, eventually, the in-source versus outsource decision pretty much lined up with some form of parity. So we are not particularly stressed about that. We have multiple options for the new launches, which we are doing for our existing in-house products.

And given that in most of these product categories, we enjoy 50% to 70% share, our ability to command better pricing for the materials, which is being sourced also tends to be relatively better in the industry. So that's how -- I mean, we don't want to necessarily kind of look at drawing a backward integration blueprint for our Indian products. We are good with a strategy where some of our formulations are manufactured announced and some of our formulations are sourced through B2B vendors.

[Jason D'Souza, executive]

I think, Kunal, I guess in your hands up.

[Unknown Analyst]

This is Kunal here from Macquarie Capital. Just one question on how your prescriber mix has changed over the last 3, 4 years between GPs and specialists and what it would be over the next 3 years? And what challenges do you see when you move more towards the specialist?

[Nikhil Chopra, executive]

Obviously, there will be challenges when you go to the specialist, not easy to get the prescription. But the way what I spoke when we started this journey, we were more a CPGP company. But now the relationship that we enjoy with cardiologists, nephrologists, respiratory specialists, pediatrics, I think the prescription -- I don't know whether we have the exact figures in terms of the mix, but Kunal can share that. But eventually, I think if you look at the products that we have launched and the prescriptions that we are getting from the specialist gives us a lot of confidence that going ahead, your overall contribution, particularly in Metro and Tire 1 town for our existing portfolio and new products that we have launched, will be more coming from the specialist. But Kunal have detail?

[Kunal Khanna, executive]

See, it's a very -- I mean, because there are no real data points, which are completely audited, but just to give you some broad numbers, when we started this journey, close to 175,000 to 200,000 doctors being called. And always, we have maintained that more than expanding the prescriber base, our endeavor is to drive better productivity, right, with the same prescriber base which we are calling. And that eventually translates into better productivity with your reps on the ground.

And with the realigned go-to-market model, we have been fairly successful in doing that. Having said that, there are other specialties, which Nikhil spoke about, which we have added. So more chest physicians, pediatricians close to 12,000 to 15,000, with the IVF portfolio, which we have from Sanzyme, there are more calls with currently, which are going to gynecs -- our exposure to gynecs has increased by another 15,000, 20,000. So there are pockets which we have expanded, but the general endeavor has been that you better -- you drive productivity with the prescriber cost which you are currently making and certainly climb up the ladder with the cardiologists and nephrologists, which are very close to our current portfolio.

[Unknown Analyst]

And the second question would be on the same line. So when you say you are not increasing the number of MRs, but you are still trying to launch a lot of products and you are still trying to get a lot of share. So where does that come from, whether it will be from higher number of calls, which MR does in a day? And will it also increase the product that he has to go to doctor with?

[Nikhil Chopra, executive]

So when we started this journey, what I was talking about the entire new go-to-market model, which we fully did based on science and evidence, we closely work with this consultant agency. And there were overlap of prescribers for our big brands like Rantac and Metrogyl. So what we did? We had 2 chronic business units. We had 2 acute business units. We had 4 divisions. We combined that to acute business unit, which were -- see, we were a 4-product company, Rantac, Metrogyl, Cilacar, Nicardia, 4 products, 4 divisions. So we combined the Rantac and Metrogyl unit. We were having close to 900 people. Today, that business is one unit close to 600 people. We got 300 people out and we launched a division, which is more for pediatrics and respiratory. And we have a good starting point for pediatrician as a specialty. We did not have any product for respiratory.

So we have launched product for respiratory. We have launched 2, 3 products for pediatrics. So that is how we are looking at productivity going up. We're now meeting more number of doctors with optimization of resources on the ground. And equally, getting into the world of diabetics, getting into the world of metabolics with our chronic business units where we have created space. That is what the journey that we have traveled. That is where we stand. So we have not added any manpower and neither we intend to add any manpower in the next 18 to 24 months because we see a lot of opportunities. By the way, our presence is big in Kerala, Bengal, UP. But our performance in Metro and Tire 1 towns is not great. So there we see huge opportunity in terms of how we can increase our productivity.

What I said that our productivity is close to INR 5 lakh, INR 6 lakhs. So there will be geographies where our productivity is close to INR 3.5 lakh, INR 4 lakh still. So there enough opportunity in terms of getting the right management in place on the ground and at least support them from corporate, you can look at enhancing their productivity by INR 1.5 lakh, INR 2 lakh in 18, 24 months. That is what we want to do. I hope I have clarified?

[Jason D'Souza, executive]

Thanks. Any more? Kunal, why don't you go?

[Kunal Randeria, analyst]

Kunal Randeria from Edelweiss. Nikhil, you have spoken a few times on expanding your lozenges business. So are you going to do it only through the CMO route? Or you think and Paranagu is there a prescription lozenges market also that may be in a good position to exploit?

[Nikhil Chopra, executive]

So both the things, both will do. Eventually outside India, what new opportune is what we see in the world of lozenges. Outside the world of world of cough and cold, there are half a dozen proof of concepts which are already available on the table. There are products under stability, which at some given time, we will offer to our existing partners. And also, we want to add new partner, the latest addition that we have done.

When we talk about prescription, already, we have launched a couple of lozenges in India. We have launched lozenges with the name Aquasil for dry mouth. Recently, we have launched Sensi Cool lozenges, which is 10-milligram menthol. We are launching X, 20-milligram menthol bust launch more for cough, cold and congestion. And you will see more half a dozen products coming into play in India, which will be a mix of prescription. And at some given time, we want to venture ourselves in junction to our new logo open to newer possibilities, we would like to get into the world of wellness, but it will take its own time.

And there, we want to be more spotter. We don't just want to add people. We just don't want to go ATL because as comp bigger players, we don't have that deep pockets. We would like to be smart getting into the world of digital, getting into the world of BTL activities, which we'll do with channel. So this is what we want to do going in the world of lozenges. So we have the capability, we have the capacity. We have the know-how in terms of the relationship that we enjoy with all the big players. So why Indian population, Indian patients should be denied with world-class lozenges that today, many of the consumers globally have been consuming from the house of J.B.

[Kunal Randeria, analyst]

Right. And so after rebranding, do you continue to pay royalty? J.B. Chemicals.

[Lakshay Kataria, executive]

There's no royalty.

[Nikhil Chopra, executive]

There's no royalty.

[Kunal Randeria, analyst]

I think you used to pay around 1% of sales for using the J.B. Chemicals?

[Lakshay Kataria, executive]

No.

[Jason D'Souza, executive]

We'll just take a Charulata, but before this Sonal had a question, Sonal, why don't you go ahead? Yes. Can someone hand over the mic to Sonal?

[Sonal Gupta, analyst]

Yes. Sonal Gupta from L&T Mutual Fund. So I mean, more on -- since you have an aggressive M&A strategy, I just wanted to understand a little bit better because, I mean, if you look at it like I mean I'll come to more to smart, really speaking. But even for Sanzyme, right, like if you get to even a 40% -- or 35%, 40% sort of EBITDA margin, you were still looking at INR 60 crores and -- versus your amortization itself would be INR 28 crores, INR 29 crores. So I mean -- or if I -- so your ROC is around 5%. If I look at the other way, I mean, if I take into account the fact that the other income is going down, you essentially have no EPS accretion. And that's for Sanzyme. And I can -- at least for Sanzyme, I can say that you can grow.

In the case of Azmarda, we're looking at a 50% to 75% price erosion. So even if you make up with volume, I mean, you're essentially looking at stagnant sales even if the profitability comes to 35%, 40%. So just trying to understand like what is your thinking here? And -- because I mean even to get to a 15% may take you 4, 5 years for Sanzyme, Azmarda might take even longer?

[Lakshay Kataria, executive]

So I'll take it. So I think if you really look at what we're trying to do, right, till about last year, INR 50 crores to INR 60 crores of our profit used to come out of. And I think that piece by itself has its own challenges with whatever we've seen in the last couple of quarters with various treasuries struggling to even ensure a good rate of return, right? So what are we doing in the strategy? We do not believe that's long-term value creation for the shareholder. What we are trying to create is more sustained businesses with the same cash, which can turn out much better cash, much better returns, much better visibility, unsustainable.

To your question on Sanzyme, I think we tried to address this during one of the investor conference. I suppose we're making, say, INR 50 crores, INR 60 crores today, right, with INR 600 crores sort of acquisition. So 3 or 4 years down the line if this business starts making INR 100 crores, right, you're already making 15%, 16%. Treasuries are not going to give you 15%, 16%, even 3 years after that. And what you've created strategically is basically a very strong India business, which is where you're seeing now a lot of these is happening in the Indian market. So for us, it creates 1 or 2 more big brands in the top 300, create space in probiotic market, which is growing at a pretty good pace.

So I think in our view, this cash is actually much better utilized in strategic acquisitions than in treasury. Amortization at the end of the day is accounting. I mean, finally, it's all about cash. If you can generate the cash to INR 100 crores, INR 120 crores 3, 4 years down the line, by investing INR 600 crores, I think it's a good sort of return to. That's how we look at the math. So Nikhil, Kunal?

[Nikhil Chopra, executive]

On a smarter perspective, if you look at the opportunity, which is there, obviously, it's a challenge in terms of what we have taken the task when you look at. From an opportunity perspective, the number of patients were suffering. And if you do some fundamental good work to influence over all the ecosystem in the world of heart failure in the next 6 to 8 months, your brand value will give you better benefits when the LOE expires. That is what -- that is the way we see. Obviously, the price point will come down, but obviously the gross margins will go up. And as what Kunal shared, I think, the big players, the big brands, so obviously, the volumes go up by 2.5 to 3x, that is what we see.

And it positions you in a different category and different lead what I spoke to you. Last Sunday, we could meet 70 top cardiologist, diabetologist and nephrologists of the country. They would have never come to a J.B. meeting. And it is not only that you are getting -- you are talking about heart failure. You are talking about the presence that you have got in all of hypertension. So there are benefits once you start getting closer to the specialties and it's a journey. That is what we see. But we conceptually want to look at how do you improve your contribution overall for the business, particularly in chronic therapy and this is the path that we have taken.

[Jason D'Souza, executive]

Thanks, Sonal. We'll just take a question online, and then we'll come back to you. We'll just take an online question. Go ahead,

[Operator]

We'll take the next online question from the line of Neelam Punjabi from Perpetuity.

[Neelam Punjabi, analyst]

First of all, many congratulations to the team for a good financial year. And many congratulations for the new brand for the company. My first question is towards your inorganic strategy. So a couple of months back, there was this media article that J.B. is among the final containers to acquire the Chennai-based Health Care for about INR 2,500 crores. So my question is, are we looking at further such a big ticket size of acquisitions?

[Nikhil Chopra, executive]

So first of all, let me talk about. So it's a no, no that we are not into the lead of. See, from a perspective of strategy from an inorganic point of view, it can be a mix of brands. It can be a small-sized company. It can be a big asset but that has to be really synergistic where we can drive synergies. It has to be a bit accretive. That is what we see. And it needs to be the strategic fit that we, from a J.B. perspective, that is what we see.

So there are assets which I will not deny that we are evaluating, but we will be selective in the approach. We don't want to unnecessarily put the stress on the balance sheet. But equally, we don't want to miss the opportunity which is lying on the table. So that is what we will do. I think somebody had asked question in terms of what are we looking at inorganic opportunity outside India?

We may look at buying some of the doses which are available from some of the big multinational companies, if they are available and they can add value to some of the geographies where we are present. So this is what we can comment on inorganic opportunity. I think the investor community is more interested in knowing what is happening in the world of inorganic. But at least from a perspective of what we are trying to do build the organization, okay, inorganically play its own role, but organically also I think what we want to do and want to grow the company and look at in terms of how at least we can gain ranks, new products, big brands that we have created, that also is a sizable opportunity that we see going ahead.

[Jason D'Souza, executive]

Yes. Any last question, Nilam, before we come to. Can someone hand over the mic.

[Neelam Punjabi, analyst]

Yes, one more question on my end. On the -- yes. On the Russian business, given the current geopolitical tension that are going on, how is the business progressing right now? And do you look at this situation as a threat or an opportunity for your Russian business?

[Kunal Khanna, executive]

See purely from a demand standpoint, the demand has been steady for us. The good thing is, over the last 2, 3 months since the war confrontation issue started, at least our receivables have still shown progressive traction. So there is no real risk. And we are also adequately hedged. Having said all this, we will, of course, remain guarded with our position from Russia-CIS standpoint.

From a mid- and long-term perspective, we do see that there is an opportunity, but still too early to comment on that because how things will kind of change course, no one can really predict. So overall, it's a much more guarded approach for us. Demand steady, receivables adequately showing good traction and adequately hedged. That's all what we want to comment right now.

[Jason D'Souza, executive]

Thanks, Neelam. Charulata, any questions that you have.

[Charulata Gaidhani, analyst]

Yes. I have 2 questions. One, where do you see CMO 5 years from now in terms of contribution to revenues? And secondly, in the CapEx that has been spent in FY '22, what business would it go into?

[Lakshay Kataria, executive]

Sorry, could you just repeat the second question?

[Jason D'Souza, executive]

Yes. FY '22 CapEx is allocated towards this business segment, if that's the question. It's outside the M&A inorganic, we have kind of largely spent on maintenance CapEx, right? So not kind of heavily skewed towards any particular business segment. On the CMO part

[Kunal Khanna, executive]

And question is on the...

[Nikhil Chopra, executive]

We already have spoken, Charulata, in terms of -- we see huge opportunity. What we are trying to do in that world. It's a perfectly -- it's a sweet spot for us. From a contribution perspective, obviously, it will contribute 15% 20% -- in 3 to 5 years, it should contribute around 15%, 20% because that is what tasks we have taken. And close to $30 million business, we are looking at how can we double and triple that business with all the right capabilities and the capacities that we have got.

[Jason D'Souza, executive]

Anubhav, your question, I think yes, the mic is behind you.

[Unknown Analyst]

Yes. Just a clarity on the margin guidance that you talked about next year. So if you take out Azmarda, how would you look at margin? Because Azmarda really margin diluted. But excluding that, how you see?

[Lakshay Kataria, executive]

It will be a little difficult to give you an exact number, but I think Azmarda not so sort of dilutive like also, I mean, in overall scheme of things, it's not going to change the outlook source significantly.

[Unknown Analyst]

No, I'm talking about EBITDA margin.

[Lakshay Kataria, executive]

Marginal dilution. Yes, I'm talking about the EBITDA margin. It will not significantly dilute the overall operations. But yes, on stand-alone Azmarda obviously will be a bit dilutive.

[Jason D'Souza, executive]

I think the question is if you would exclude Azmarda sales, he's asking what would be

[Nikhil Chopra, executive]

That is what what we are giving the range of 24% to 26%.

[Lakshay Kataria, executive]

of 24% to 26%.

[Unknown Analyst]

See, I'm trying to understand this. Like if you look at quarter 4, you already did 26% margin, right? And you have a very good price increase, which is going to happen next year in the India business, right? So what gets worse for you that margins will decline here for -- it should expand excluding Azmarda?

[Lakshay Kataria, executive]

So there are 2 things. So we reported about 25.5% underlying this quarter, right? There are certain seasonalities of certain businesses. So for example, if you look at last quarter, our CMO performance has been very, very small, right? Into revenue of INR 250 crores in the year, INR 85 crores happened last quarter. So the various things that play out, right? And when we look for our EBITDA guidance, we look at various sort of the seasonality, functionalities. So 24% to 26% is a range, right? Some quarters will be at 24%. Some will probably be at -- maybe 25%, 26%. That's our mix.

[Nikhil Chopra, executive]

India uses also you will see first 6 months actually, you are getting better prescriptions and demand for Rantac and Metrogyl because franchisees more use in summer season. But eventually, in the second part of the year, where it will go somewhat soft, you will get start getting better demand from business. So that is why we have been guiding. It will range between 24% to 26%. Some quarter, you will see 26%. Some quarter, you will see close to 24% to 25%.

[Unknown Analyst]

And how do you see the cost trend from here? Any -- are you bidding in any spike in any of the cost elements from there?

[Lakshay Kataria, executive]

So cost elements, yes, we have seen headwinds. I think our operations team has done a good job of sort of hedging against a lot of it through strategic sourcing, long-term contracts. But yes, there is a reasonable amount of inflation around there. So as we move forward, you have some more impact will come in quarter-on-quarter, which, like you said, rightly, we'll try and offset through pricing in some of the other initiatives.

[Jason D'Souza, executive]

Yes. Any more questions, we'll move to Nikhil, if

[Unknown Analyst]

Yes, sure. But I'm just a little surprised because I'm expecting at least India business will at least see a price increase on an average of more than 8% for the portfolio at least. It should be more than that. And the cost increase has to be really material because even adjusting for a normal what you would have done...

[Lakshay Kataria, executive]

So let me explain how this pans out in 2 or 3 ways. One, from a COGS perspective, because we have done a lot of strategic sourcing and long-term contracts, we've been able to delay some cost in Q3, Q4 last year, right? That's why you saw 25.5%, 26% budget. But at some stage, those materials are going to get over and you'll have to sort of pay for the revised cost.

Second, on the manpower front, you will see that inflation kicking in. So while you are counting the price increases, all the inflation on your travel costs, marketing costs are now at pre-COVID level those things also will start playing up in the P&L. So that's why we are guiding on a range of 24% to 26%.

[Jason D'Souza, executive]

Thanks, Nikhil., go ahead., you want to just hand over the.

[Nikhil Mathur, analyst]

So my question is on the secure part of the portfolio. The company has 2 very strong brands. But we don't hear much from you on plans to expand acute business. So any particular reason why despite having 2 key plants, we're not looking to add much on the portfolio about from respiratory? I mean, GI itself is a pretty huge market opportunity. Why isn't J.B. trying to target that much?

[Nikhil Chopra, executive]

What I showed in my slide, we are the only company who have bought into the approval from the CGI, which is a combination of metronidazole plus, that would be a big brand. We have launched a combination of and domperidone, we have got rented. So there are products. And there are products in our, where we see we can double the sale. There are life cycle management that we are doing for our products, which are a combination of -- in the world of wound infection. That is what we are trying to do. So it is not -- so it is not for the sake of launching, you launched products. There is -- there are enough products, which we think that you can double the sale in our acute range.

Obviously, there were some misses in terms of when we look at -- there are some products which we have launched in the world of pediatrics, which is more in the world of acute. It is not that we have only launched chronic products. So there's a mix of portfolio which we have got, where we see huge opportunity going ahead and more of it is seasonal, if I have to talk about. So that is where we. We have got life cycle management in the world of Rantac and Rantac, we have got Metrogyl. That is a product we have launched. We are now getting new products in the world of probotics, what I spoke about, like the product that we have got, we are getting 2 different versions of ore formulations in the form of sachets in the form of care. So there will be acute product launch, which will continue to happen.

[Nikhil Mathur, analyst]

So ex of Sanzyme portfolio, I don't remember the exact market share that would be having in GI as of today. Can we expect maybe a couple of percentage points or some basis points of market share improvement over the next 3 to 5 years?

[Nikhil Chopra, executive]

I will say, overall, if you look at the way acute portfolio bears in India, we are not a big player in the world of antibiotics. That is where we have got metritis obviously the values are not that high. And you see a lot of fluctuation in terms of the way acute market in India. Our market share is close to 50% -- our contribution for us within the business is close to 50%. And if you get a good season, get a good demand of Metrogyl, you got a good amount of Rantac, obviously, the overall contribution will go up overall demand because in all these brands, which I've been talking, we are dominant present in terms of market share. So eventually, if there's a good market demand, your contribution and your market share is only going to go up.

[Nikhil Mathur, analyst]

Just one more. Go ahead. In the 24% to 26% margin guidance, you talked about that -- raw material front, you talked about that some costs might go up. But what are you budgeting on some of the other costs, whether it's power or packaging of freight, does 24% to 26% consider costs which are there standing today or you're factoring some bit of decline or some bit of increase in the coming months?

[Lakshay Kataria, executive]

We are largely on most of the cost assuming a standstill as of today what we are seeing in the month of March, April, May. That's what we're assuming. Manpower, obviously, will escalate with the annual increments, et cetera, that come in during its.

[Nikhil Mathur, analyst]

Okay. So if power and freight were to fall, let's say, in coming months, then that would be margin accretive to your guidance?

[Lakshay Kataria, executive]

Yes.

[Jason D'Souza, executive]

Thanks, Nikhil. Sujit will just take the last, but there is an online audience and then you all can definitely meet the.

[Unknown Executive]

on power and fuel falling missed something.

[Jason D'Souza, executive]

We'll just go to the online audience, and then we'll come back out here. So go ahead, just take one last question from the online audience.

[Operator]

Sure. We have the next online question from the line of Rajat Setiya from.

[Unknown Analyst]

Am I audible?

[Nikhil Chopra, executive]

Yes.

[Unknown Analyst]

Just one question about our portfolio. Do you expect that this portfolio can fall under pricing regulation in the list of NLEM?

[Nikhil Chopra, executive]

See, we can't get into any speculation. And what I shared earlier, I think -- I don't know whether you heard that. I'm a big fan of volume growth. So things which are beyond our control, we can speculate, which are within our control in terms of what we can do with the brands that we have, we'll do the right justice. So whatever price controls come, whatever price increases come, we'll take it as is. because we want to be rightly compliant. But enough opportunity lies when you talk of what we can do in the world of hypertension, 1 in 4 patients is not knowing that the percentage is suffering from hypertension, huge opportunity in a country like India. Where if you do the right things, if you build the right ecosystem, if you conceptually look at targeting the right SKU within Cilacar with the right specialty in the right indication, sky is the limit.

[Jason D'Souza, executive]

Thanks.

[Unknown Analyst]

Sujit from BOB Capital. I have 3 questions. What percentage of domestic revenue belong to portfolio?

[Lakshay Kataria, executive]

25% to 30%.

[Unknown Analyst]

25% to 30%. Second thing is what percentage of your COGs belong to your benzene-based product, which might be pretty much linked with food-based?

[Nikhil Chopra, executive]

COGS, I did not get the question.

[Unknown Analyst]

Benzene based.

[Nikhil Chopra, executive]

Benzene based?

[Unknown Analyst]

Yes.

[Nikhil Chopra, executive]

What is that to do with COGS?

[Unknown Analyst]

Because if that be the case, then your cost of production will go up because it is directly linked with the crude.

[Nikhil Chopra, executive]

We won't have -- I can't comment on exact number from benzene and crude, please.

[Unknown Analyst]

Because you have mentioned the benzene-based product you have in your presentation, that's right.

[Kunal Khanna, executive]

I think offhand cannot comment on the exact COGS proportion is what we are saying, is not going to significantly.

[Jason D'Souza, executive]

Okay. And your third question, last question?

[Unknown Analyst]

Given your commentary in U.S. market, it's like you are more interested about faster access to the emerging market because there are many emerging market has given you free access if you have the product approved already by U.S. FDA. Do you have any plan going forward through that process?

[Kunal Khanna, executive]

We are certainly following that strategy. Wherever you have ANDA approval, you try to leverage that across markets. Some of the markets like Middle East, pockets in Asia Pac, give you faster approval. We have already done that for some of our existing products. But this is not a strategy to get faster approval in ROW. We have a different set of portfolio for ROW as well, which is part of our development pipeline. We cannot center our U.S. strategy based on you get faster access to ROW, you have those products, how you can maximize and leverage that is the second question, right? But it's not driven by the ROW strategy.

[Jason D'Souza, executive]

Thanks. And we'll take one last question because anyway the management is there in, but if there is no further questions, then we can -- I can hand it over to Nikhil for the closing remarks and the vote of thanks because there's a huge online audience also out there listening to us.

[Nikhil Chopra, executive]

So I could not connect to the online audience, but at least they would have seen the presentation. And I think they would have at least seen in terms of where we were, where we are and where we want to be. And also, it was a privilege for all of you that you people have taken your reseals time and come here and it was an opportunity for all of us to talk about our new identity, which we'll continue to build in the coming time. Thank you all for coming, and thank you for patience hearing. We'll continue to engage with you periodically. Thank you.

[Jason D'Souza, executive]

Thank you, everyone, and please join us for some snacks. Thank you.