Marksans Pharma Ltd
NSE:MARKSANS
| US |
|
Fubotv Inc
NYSE:FUBO
|
Media
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
C
|
C3.ai Inc
NYSE:AI
|
Technology
|
| US |
|
Uber Technologies Inc
NYSE:UBER
|
Road & Rail
|
| CN |
|
NIO Inc
NYSE:NIO
|
Automobiles
|
| US |
|
Fluor Corp
NYSE:FLR
|
Construction
|
| US |
|
Jacobs Engineering Group Inc
NYSE:J
|
Professional Services
|
| US |
|
TopBuild Corp
NYSE:BLD
|
Consumer products
|
| US |
|
Abbott Laboratories
NYSE:ABT
|
Health Care
|
| US |
|
Chevron Corp
NYSE:CVX
|
Energy
|
| US |
|
Occidental Petroleum Corp
NYSE:OXY
|
Energy
|
| US |
|
Matrix Service Co
NASDAQ:MTRX
|
Construction
|
| US |
|
Automatic Data Processing Inc
NASDAQ:ADP
|
Technology
|
| US |
|
Qualcomm Inc
NASDAQ:QCOM
|
Semiconductors
|
| US |
|
Ambarella Inc
NASDAQ:AMBA
|
Semiconductors
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
132.95
318.35
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Fubotv Inc
NYSE:FUBO
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
C
|
C3.ai Inc
NYSE:AI
|
US |
|
|
Uber Technologies Inc
NYSE:UBER
|
US |
|
|
NIO Inc
NYSE:NIO
|
CN |
|
|
Fluor Corp
NYSE:FLR
|
US |
|
|
Jacobs Engineering Group Inc
NYSE:J
|
US |
|
|
TopBuild Corp
NYSE:BLD
|
US |
|
|
Abbott Laboratories
NYSE:ABT
|
US |
|
|
Chevron Corp
NYSE:CVX
|
US |
|
|
Occidental Petroleum Corp
NYSE:OXY
|
US |
|
|
Matrix Service Co
NASDAQ:MTRX
|
US |
|
|
Automatic Data Processing Inc
NASDAQ:ADP
|
US |
|
|
Qualcomm Inc
NASDAQ:QCOM
|
US |
|
|
Ambarella Inc
NASDAQ:AMBA
|
US |
This alert will be permanently deleted.
Marksans Pharma Ltd
You don't have any saved screeners yet
Good evening, ladies and gentlemen. I'm Kritika, moderator of Marksans Pharma Q1 FY '23 Earnings Call hosted by DAM Capital Advisors Limited. [Operator Instructions] Please note, this conference is recorded. I would now like to hand over the floor to Mr. Nitin Agarwal of DAM Capital. Thank you. And over to you, sir.
Thanks, moderator. Good evening, everyone, and a very warm welcome to Marksans Pharma Limited Q1 FY '23 earnings call hosted by DAM Capital Advisors. On the call today, we have representing Marksans Management; Mr. Mark Saldanha, Founder, Chairman and Managing Director; and Mr. Jitendra Sharma, Chief Financial Officer. I'll hand over the call to Mark to make the opening comments, and then we'll open the floor for Q&A. Please go ahead, Mark.
Thank you, Nitin. Welcome, everyone, to our Q1 FY '23 earnings call. I'm pleased to share that we had a strong start to the year with a solid growth in the first quarter across our regions. Our U.S. grew by 25.7%, while U.K. and Europe grew by 13.7%, driven by a strong volume growth and new product launches. Pricing erosion continued to be high in single digits in the U.S. impacting our generic business. However, our RoW revenue doubled, while Australia/New Zealand grew by 38%.
The inflationary headwind continued in the quarter with the increase in cost of material and freight costs impacting our margins. However, we expect the situation to improve in the current year and cost pressures to be moderate. We have also started passing a price increase to our customers. We've continued to be innovative and launch products supported by our R&D capabilities. We have a strong product pipeline and plan to launch several new products in the next 2 years. This will drive a sustained growth momentum and hopefully improve our profitability.
We obviously aim to increase our R&D spend to 4% to 5% of sales over the coming years. Our low-cost manufacturing capabilities provide us with a competitive edge. We do plan to expand our capacities over the next 12 to 18 months. This, along with our backward integration plan into API over our core molecules will help us expand our margins in the near future. Our aim as a company is always to be a fully integrated company with our own API, formulation, manufacturing and a forward-integrated business module in the biggest markets.
With this, I'd like to turn it over to Jitendra, who will update you on the financials before we can start our Q&A.
Thank you, sir. I will explain the financial performance of first quarter of financial year '22/'23. Operating revenue was at INR 433.8 crores, an increase of 24.3% compared with INR 349 crores last year. U.S. and North America was the highest contributor at INR 173.9 crores and witnessed 25.7% growth year-on-year. EU and U.K. formulations market recorded 13.7% growth, standing at INR 181 crores. Australia and New Zealand formulation market recorded 37.8% growth at INR 52.6 crores, whereas the rest of world recorded 99% increase in the sales to INR 26.3 crores in Q1 of FY '23.
Gross profit was at INR 218.9 crores in Q1 of FY '23, increasing by 17.3% year-on-year. Gross margin declined by 302 basis points from 53.5% to 50.5% in Q1 of FY '23. EBITDA was at INR 72.9 crores, decline of 5.8% year-on-year due to continued cost pressures. Our depreciation was at INR 11.1 crores at a normalized level versus last quarter, where it increased due to Ind AS 116 lease accounting.
Consequently, our PAT was INR 60.2 crores in Q1 FY '23 compared to INR 62.6 crores in Q1 of FY '22 and INR 29.7 crores in Q4 of FY '22. Our R&D spend in the quarter was at INR 8.9 crores. That is around 2% of the sales. We continue to remain debt free and our cash and cash equivalent in the books was at INR 339 crores as of 30th June 2022.
With this, I would like to open the floor to the question and answers. Thank you very much.
[Operator Instructions] First question comes from [ Manoj Matthew Jacob ], an individual investor.
Mark, congratulations on the results. I have just 3 questions to you. Question number one is this increase in turnover year-on-year, is it because of the additional capacity that is coming to effect in the Goa plant? Because in 2020, after the March results, you said you're going to double the Goa plant production. So can we expect more turnover this year? Or is this the turnover we could expect for the next quarters of this year?
The second question is as fast as when can we expect the API to come online. And since you said the core molecule, it will all be in the pain segment. Hello?
Yes, I can hear you. I'm still waiting for your questions. I'll reply once you finish all the questions.
Yes. I mean, I'm done with the questions.
All right. So the increase in sales is obviously proportion to the capacity. And over time, we have increased capacity every year. We spend a lot of CapEx increasing capacity to meet our demand. So we do expect to maintain this trend for this current year. However, that said and done, we have aggressive plans to increase our capacity further in the next 12 to 18 months, which will again fuel the next year's growth plan.
With regards to API, when will the API come online? It's a bit longer than expected. We're working on -- we expect to file at least 2 DMFs this calendar year and maybe 3 in the next financial year. Obviously, once we file the DMFs, we need to trigger those API onto our active licenses, which normally takes anywhere between 6 to 9 months. So hopefully, by next year, we should have couple of products on to our licenses where we'll be fully integrated.
Okay. My last question, okay? I remember you telling me that in January, April and July, you have your price renegotiation with your -- with the buyer [indiscernible] Sam's Club and all. So now the price solution is done -- done and over, so can we expect a better EBITDA and net profit next quarter?
So we have -- basically, we have asked for price increases. And normally, the price increases, like you rightly said, happens at a particular time. Some have happened in April. Some are happening now in the month of August. While that's said and done, we still continue with cost increases at the other end. So when you do a price recommendation, you start at from one point, but if cost escalates further, it again, you're just basically -- it is just eroding the advantage that you would have got.
But that said and done, we are seeing prices tapering down, raw material prices coming down. We are seeing oil and crude prices coming down. We do see it basically continuing in this year. So -- but by the time it actually kicks into the system, by the time you actually see the end result of that, I have my doubts that this financial year, you will see the direct impact of all this happening. So hopefully, the next year will be much better than this year.
Okay. So this year, we can't expect a PAT margin of 20%? It will still be at 16%.
Yes. Around 15% to 16% is -- and EBITDA. Sorry, EBITDA will be about 15% to 16%.
Next question comes from Yogesh Tiwari from Arihant Capital.
Congratulations on the result. My first question is regarding the U.S. market. So as you pointed out that there was a high single-digit erosion in the U.S. market. So just wanted to understand, because the revenue grew by about 25%, the volume growth would be about 30%. So if you can share some highlights which molecules contributed to this high-volume growth? What would be the contribution of new product launches and previous launches?
So the new product launches, obviously, you will see the impact only in the last quarter and moving beyond the last quarter into the next calendar year. So obviously, we have some contribution coming in. The high cost increase single digits, which I mentioned, is because of various factors that come into play into raw material costs, the packaging material cost, the freight cost all contributing. And no single molecule, per se, has contributed to this side. It's been -- our entire basket of products are basically performed and given decent revenues.
There are a few products which have taken a backseat because of price erosions. But again, the pain segment, the cough and cold allergy segments and -- are main contributors to this drive of growth.
And sir, how is the pricing environment in the U.S. now? So is it similar like high double -- high single digit, which was in the previous quarter? Or it has moderated currently?
So far, it is showing the trend, but it is showing a bit of a moderation also. Now with the raw material prices tapering down a bit, or I don't think it'll go back to the old number, old pricing of raw materials that we saw 2 years back. But I do see the raw material prices getting better. It's not at least increasing further. It's coming down. That said and done, the competition in the U.S., the consolidation which has taken place, the correction which has taken place, it will take some time to see better numbers out there. So challenges remain in the U.S., but we are moving against the trend out here, and we are trying to differentiate ourselves amongst everyone else.
Sure, sir. But is the pricing erosion still similar to Q1 like in higher [indiscernible]
Yes, it is very similar to that.
And any consolidation happening in the oral solids in the U.S. because of this challenging environment? Any companies which have struggled [indiscernible]?
No. Actually, consolidation is not happening from the company standpoint of view because companies are getting -- they are flushed with capacity, and the demand is lower than what it was at peak of COVID times. But there's obviously the impact of what you see with a lot of companies has basically the consolidation and a distribution channel, which is basically having an impact in the demand and supply situation. And this is creating, obviously, price erosion happening and oversupply happening out there. So it will take some time to correct, but I do believe eventually, it will correct.
And any data around what would be the inventory of pain management in the U.S. because that might be one of the factors behind price erosion. So any data between now and previous quarter for pain management?
You're talking inventory?
So basically, what we understand is like there has been some buildup of inventory in the U.S. market, which led to price erosion in previous quarters.
So I don't think that would be the right statement of inventory buildup. I think it is more with demand and supply situation. So there is more supply, more capacity, more capabilities. And demand has come down. So obviously, that's where companies tend to take aggressive stance to utilize the capacity. So that said and done, I don't have the numbers of what the inventory is, obviously. But I do believe it is mainly related to the capabilities and the capacity versus the actual demand in the U.S. market. So obviously, U.S. sales, although -- I mean, on the verge of recession or maybe going through a recession, so there is -- there has been a slowdown in the demand.
And sir, we are looking for a price increase in August. So what would be the quantum like in the range of -- how much percentage would be [indiscernible]?
It's difficult to mention because it is product specific and based on molecules where pricing has gone higher than we are basically trying to pass it down to the clients. And the molecules where price increase has not happened, then we would not be increasing, and the price -- wherever increase has happened very negatively, we pass on negligibly to the customer. So it's -- there is no fixed thumb rule that throughout the plan basket, we are going to increase it at X percentage. We don't do that.
And sir, lastly, on the raw material. So the raw material prices have come down, but we must be having some high-cost raw material previously. So how many months -- or when can we expect that this many...
Yes, that's a good question, actually, because we don't recover with such a struggling supply chain. We cannot sustain our commitment with less inventory. So we normally keep minimum to 4 months of inventory, 3 months on hand, 4 months on hand sometimes, and 1 month in transit. So we are sitting on a good 4 months plus inventory at our end. So that's where -- even if the pricing improves, you will not see that results for another 6 months plus.
[Operator Instructions] We're having a question from Prerit Choudhary from Green Portfolio.
So my first question is related to the fall in revenue numbers in Q-o-Q in Australia and New Zealand. So are there any reasons for this happening? Or what is the reason [indiscernible]?
This is Jitendra. Sorry, we couldn't get you properly. Which market you were talking about?
Australia/New Zealand. So I'm looking at fall in the revenues in Q-o-Q figures.
Yes. Okay. So the last quarter, the Q4, there was a bit of incremental demand on pain management in Australia on account of the COVID flareup. So there was a good lift-up resulting into higher sales in Q4 in pain management segment specifically. So that is the reason. But I think from Q1 onwards, now it is stabilizing. And I think the Q1 numbers will give you a bit of idea in terms of the trend of what we are likely to achieve in this year so far as Australia and New Zealand market is concerned.
Okay. And my next question is related to the acquisition. So in the last con call, you had mentioned that you would be acquiring for formulation manufacturing operations. And also for the land and [indiscernible], you are planning a greenfield expansion. So are there any updates for the same, what the company plans are?
Yes. For the manufacturing facility, obviously, we are in dialogue with companies, and we are hoping that, in the next couple of months, we would be in a position to put pen to paper. With regards to the greenfield projects, the land that we have taken, obviously, it's all revolving around the facility. If we can close this transaction, then we will take it -- we will explore whether we move forward with the greenfield project at this stage or at a later stage.
Okay. And apart from that, in the investor presentation, you have mentioned a couple of acquisitions or the growth plans you have, so if you can provide any time lines, what plans you are currently working on, what could be the possible -- what can -- when we can see the possible results for the [indiscernible]?
So acquisitions and M&As are very unpredictable. We don't -- unless we are nearing something where we believe there could be a possibility of signing something, it is too early to mention that. Obviously, like I've always said in the beginning of the year that we are optimistic that this year, we -- our focus is going to be to expand our geographies and our footprints and the market. So we're working on that. But presently, there's nothing much to say about it because we don't have anything concrete beyond what we've already spoken about.
[Operator Instructions] We're having a follow-up question from [ Manoj Matthew Jacob ], an individual investor.
Mark, I've got one more question to you. We did INR 433 crores and INR 60 crores net profit, and we have INR 19 crores cash. So the rest, has it gone into investment into capacity expansion?
Did you say how much cash because our cash...
INR 19 crores.
No, cash is INR 300-odd crores.
No, no, no. I'm talking about this quarter cash accrued to the company. The June quarter, cash with the company is INR 19 crores.
Yes, this is Jitendra here. So basically, that cash -- see, we started the year with a cash of around INR 349 crores. And in the quarter, we did one acquisition of Access Healthcare, where we have invested around INR 30 crores. So after utilizing that cash and the cash accrual with the quarter and whatever working capital adjustments we had in the quarter, the cash balance for the quarter was INR 339 crores. So basically, it got utilized in the working capital movements and partly towards the acquisition of Access Healthcare also.
Okay. So when do you think you personalized the [indiscernible] potential issue? Like INR 335 crores when it comes in, they're not -- they don't intend to put it in your balance sheet. Definitely, you're in talks with some -- for some acquisition or for some plans, something like that. You're not looking at the plan?
No, no, we are not looking into plans. Of course, the money will come into the balance sheet. It will definitely increase our cash balance. And eventually, we will plan -- we are planning to utilize it for the growth-related revenues. So eventually, it will get invested.
But don't you not think there are lots of formulation companies now in India up for sale? API, of course, is difficult. But formulation companies, there are many, I think, now up for sale.
We are looking at various possibilities, and we are working on that.
Next question comes from [ Marta G from Sascha Capital ].
Yes, sir and the congratulations for the good numbers. I have a query. Right now, I think the platform is well set for us having very good cash balance and actually -- so what is actually the future growth plans for increasing the turnover from INR 2,000 crores and above?
Yes. So basically, obviously, our growth plan is within the same market. So I do believe next year, we should be trending towards the next milestone of INR 2,000 crores. We have to do a lot of investments to grow beyond -- to take us to another level. And for that, there may be some M&As, capacity increase and product pipelines which will drive the growth further.
That is truly the same kind of pipeline or something like any complex kind of working? Or are we actually working on it?
Obviously, as the company evolves, the pipeline evolves, and it gets more complex. So we are working on different segments from formulation segments, complex molecules. We are venturing into creams and ointments. So we are getting into different segments like I mentioned. So the formulations will get more complex as we evolve.
Okay. So are we looking at something like injectables or something like or can be the same in kind [indiscernible] complex [indiscernible]?
No. Injectables, presently, we don't -- at least for the next 12 months, we don't have it in our new horizons. We've got a plateful with the product pipelines and a wish list of products that we want to invest our resources on. So obviously, we are trying to invest wisely and to ensure that we basically get best returns out of our investments.
[indiscernible] again I'm going to the raw material cost of mills consumed, the cost of milk have gone up between Q4 to Q1. So what could be the reason I think about 500 bps, but it has gone up. So what would be the reason between Q4 to Q1?
This is Jitendra here. There are various reasons here. The product mix, of course, plays an important role. And the pricing pressure on the input cost pressure again continues on raw material pricing also even during this quarter. So largely, it is the product mix, where -- which can have the different gross margin outcome at the quarter end.
Okay. Can we expect it to be improved in this again running quarter means Q2 and onwards? So can we expect that the Q4 kind of cost, I mean, the [indiscernible] is going to be?
We are expecting it to remain at these levels, at least for the next 2 to 3 quarters.
At Q1 level or Q4 kind of level, sir?
At Q1 levels.
[Operator Instructions] We are having a question from Sachin Kasera from Svan Investment.
Congrats for a good set of numbers. I have a few questions. One, you mentioned in the presentation that you intend to increase the R&D from 2% to 4% to 5%. So on -- if you could give a sense, this will happen over what period of time?
Second is increase that you will see, will it principally mean that we're looking to move the curve and start filling more complex drugs? Or it will be more driven by that we will now have a far larger number of filings?
Yes. So basically, yes, in terms of R&D, I think our spend is going to gradually increase. It's not going to happen in the next 6 months, but we are planning to invest into more complex molecules with costs going up. Our spend in R&D, we do foresee in the next 2 years will eventually migrate from a 2% to a 4%. And the molecules will be in a complex category. And like I said, as the company evolves, the molecules get more complex at every stage.
So we are not actually going with a philosophy of number of filings obviously because every ANDA cost this big sum of amount to do filings. Nowadays, ANDAs are not free, so they do charge a huge amount for filings. So you've got to be very selective in your development and your filing with the vision that the product can see light after 2 years.
Sure, sure. Second question is on gross margin. So from what I can see in the presentation compared to the March quarter, there's a sequential improvement in the gross margin. And you have mentioned that, because of the consolidation and the type of demands approach, there remains pricing pressure. You also mentioned that we are trying to take some price hikes. It's a little confusing. Then we are witnessing price hikes and low demand and then pricing pressure. At the same point of time, we are seeing sequentially improving gross margins, and you're also talking of price increase. So it's a little confusing, so if you could tell us how this interplay of those 2 things will play out as we go ahead.
This is Jitendra here. See, this is a continuous process. So on one side, we are seeing input cost pressure, wherein the raw material, CPN packaging material prices are increasing. On other side, definitely, we are trying to pass it on to our consumers. So these are parallel activities, which we keep -- which we are trying to do -- try to work on. And so that's where, as I said earlier, the gross margin improvement basically in the quarter was due to the product mix, the price increase, which we are seeking from our customers. So that's the -- another activity, which we are continuously trying to have with our customers.
I understood in coming to the question in we are saying we are able to get some price increase of products. And secondly, we are seeing there's a lot of pricing pressure. So it's a little confusing for us what is the [indiscernible].
See, these are the continuous activities, which -- like we are having. So -- and they are independent of each other. I need to say the price increase, the raw material price increase are happening, which everyone knows what is happening in the chemical and the API sector. The oil price increase has a lot of pressure on the packaging material costs also. The aluminum prices are increasing, which is the main ingredient for our packaging material.
So the price increase is one part which is happening like -- and that is what we are trying to pass it on to our consumers. So that's where the -- so though there is a pricing pressure, but then there are a few products where definitely we are in the -- we are able to pass it on to our consumers. So it's a mixed bag where some products are seeing pricing pressure. Some products, we are able to pass it on to the consumers.
So it all depends on the product, customer, OTC, like definitely some products, we are able to pass the price increase to the customers. Rx, we are finding it difficult to pass it on. Rx, we are seeing a lot of pricing pressure. OTC relatively pricing pressure is on lower side. So it's a combination. It's a dynamic situation out there in the business in the equities market situation overall.
Sure. So the next question is just a follow-up to this. Your presentation mentioned that the share of OTC is increasing continuously. So if you would elaborate a little bit, one, is it that in OTC, the pricing pressure and the gross margins are a little better. And how do we see this ratio commitment?
Secondly, within OTC, you have mentioned about store brand and then own label. So again, is there any margin difference between the 2? And how do we see this evolving the OTC this year between own brands and private labels?
No. So the store brand is pretty much -- and the private labels are the same. In terms of pricing, pricing competition is there in every segment, in every category of products. However, out here, the OTC, obviously, is more service oriented. So they do give you some advantage out there. There is obviously a level of stability, so unpredictability we see. We are very strong in the OTC because, historically, we have always given equal importance to OTC. So it has -- and our competitive edge is our product portfolio and our manufacturing capabilities where we leverage low-cost manufacturing base, which has helped us to gain more market share on that.
The volatility in Rx is obviously a different issue where pricing pressures -- because it's on your own label, pricing pressures are more prominent in prescription products than in OTC. With that said and done, OTC business model revolves on contracts. But doing the negotiation of contracts is always pricing pressure out there.
But net-net deals, would you say that you get a little better margins in OTC versus Rx, or they are the same?
I think they are pretty much at the same. So I would not say Rx -- the advantage of Rx is you do get short-term gains also. So you can -- because Rx volatility is very high. So when it hits bottom, it hits bottom, but when it goes up, you can see some advantage out there. So you do see the ups and downs in Rx. OTC is more flat line as far as that is concerned.
Sure. And the last question on the CapEx, the mention of INR 200 crores CapEx. So this is mainly for capability building? Or is it that we are sourcing that we may run out of capacity. Hence, we are looking to increase the capacity. And that's the main [indiscernible].
So it is both. Obviously, it is -- we have to have a forward-looking statement as to what we anticipate for next year and the year after that, and CapEx takes time. So it takes 6 months to put in machines and to put it in place, everything like that stuff. So definitely, you've got to invest today to see if it lands tomorrow. So that said and done, the investment includes both new infrastructure to basically meet complex molecules at the same time expanding current infrastructure to cater to our existing products, and it may involve a bit of M&A in terms of the manufacturing facility that we are pursuing. It may involve that to ensure that we get to another level.
[Operator Instructions] We are having a follow-up question comes from Yogesh Tiwari from Arihant Capital.
Thank you, sir, for the follow-up question. Sir, can you share how many products are you looking to launch in the U.S. for this year and next year and also for U.K.?
So basically, in U.S., we are looking at nearly 4 products this year. And next year, another 4 products, 4 to 5 products. And obviously, U.K., we are filing nearly about 10 products where we do see at least 3 products seeing the light. The previous year's filing 3 to 4 products will see the light this year. But we have a wish list of in the next 24 months to file nearly about 25 products in the U.K. market, and very close to 12 to 14 products in the U.S. market.
So basically, we'll be launching about 4 products in the U.S. this year and the 4 in the next year, is that correct?
Yes.
And in the U.K. about 3 to 4 this year. And next year?
Yeah, it, will probably be about 6-odd products next year, 6, 7 products next year.
Okay. 6 to 7 products? And sir, lastly, what -- if we can get in that top range, what would be the margin differential between OTC and prescription products? What is the [indiscernible]?
It's difficult to mention that because like I mentioned in the earlier reply, Rx is highly volatile. And so while there are good days, you may see bad days also. And sometimes molecules are just not affordable because of the volatility and demand and supply situation. OTC is, like I mentioned, flatlined. It is basically much more stable. So if you look at the opportunity, Rx sometimes shows you good opportunities. While OTC is now predictable and you know what you get, so it's difficult to actually put a number to say the difference between the 2 because, if the Rx is active, we make sure we don't go below our cash point, which is pretty much what we enjoy in OTC. And so we launch product. We keep our Rx active to that flashpoint. So we don't have a big difference between the Rx and OTC.
So normally, going forward 2, 3 years, it will remain in that same range?
It will remain in the same range, or if the Rx comes down below that range, then we decide we will just stop for some time, and we get back into the market at a different time at a different stage. So we try to ensure that we don't -- we ensure we service accounts where we at least make our desired bottom line.
And sir, last question on the U.S. versus U.K. market. So is the proportion of Rx and OTC similar in both the markets, the U.S. and U.K.?
Well, historically, it was similar, very similar. This year, obviously, because of price erosion, high price erosion and the Rx part of it, that's why I mentioned on the volatility. The OTC has taken a bit of the front lead in terms of market share, but we're hoping that the Rx eventually will come back and take and gain some ground. But I do see in the U.S. OTC being the front leader compared to the Rx part of it. So historically, we were 49%, 51%. Now I do believe OTC is 60%. So OTC being 60%, 65% and Rx being 35% to 40%.
Next question comes from [ Aman Kanuku ], an individual investor.
Sir, looking at the current result, can we expect similar momentum for this quarter-to-quarter going forward?
Yes. I think that's our hope. And obviously, we are in control of only what we do. We don't have global -- I mean, we don't have control on the global scenarios that happen. But we are hopeful that we will continue these numbers in the coming quarters also.
Okay, sir. And sir, can you remind where is the next -- U.S. like order only 2 of our facilities across all 3 facilities?
I don't -- I mean, I don't predict those time lines. It's left up to them.
Okay. But generally, like every 5 years? Or is it just any random like...
It's random, and it's not 5 years. It's only 2 years or 3 years. It's 2 years, basically, but it's very random. They can come in 6 months or so. So the -- it depends on filing based on filings and based on what...
Okay. And in the year 2016/'17, like we had some issues with the U.S. like FDA, okay? So how today are going today? Like seeing today, how...
So we didn't -- I must correct you. We didn't have any issue with the FDA. We had in 2015 with MHI, but not FDA.
Okay. Okay. Okay. So how better are we placed today in terms of the inspection of our facilities and everything and the measures and everything?
We have evolved. We have progressed on all.
[Operator Instructions] We are having a follow-up question comes from Sachin Kasera from Svan Investments.
You mentioned that you are looking at some core launches in U.S. this year and next year. You also mentioned in the presentation that you're on core soft years. So can you tell us whether these 8 launches in the next 2 all the [ 4 ] soft gel launches?
And secondly, if you could give us some more granular details of what this core soft gel [indiscernible] market and what type of revenue potential it can have for us?
Yes. I mean, see, soft gel is a part of our business model. But in terms of -- they're all niche molecules. So I mean we do basically focus on more niche molecules. We don't look at any molecule being drug busted out there. But the approvals that we are expecting are more solid oral as well as upsell over the next 2 years. So I mean, I would give more importance even to our solid oral dosage molecules where -- because they're more complex in nature. I do believe we are getting into more extended-release products, so that gives us that again showcases or highlights our capabilities of getting into more complex molecules. So those are niche molecules, and they will get -- they'll pay equal importance as soft gels.
Sure. Secondly, on the U.K. market, last 4, 5 quarters, our revenue in the quarter INR 150 crores, INR 155 crores. This quarter, we grow to INR 181 crores. Is there some onetime in this or because of the new launches and better maybe market share, this is a number that we should look at?
Well, it is better market share, new launches basically that is resulting into that growth.
So should we assume it more like a first label number, this INR 180 crores a quarter, and maybe you can probably improve a little bit from here.
Yes, I think it's fair enough to assume that.
Sure. Secondly, on the RoW markets, we saw some strong growth last few quarters. So can you just comment a bit how is that market doing? And what our expression there, what are the type of outlook you are seeing there? Any new geographies we are targeting, or what's bringing this type of traction in the RoW markets?
Well, we are targeting more product launches. Again, new products, more product launches, newer markets. We are exploring markets to add value. And obviously, now with this new baby of Access Healthcare in Dubai, we do plan to tap on to the Middle East also. So -- but yes, I mean, it's basically new launches and new markets that are basically fueling that growth. And obviously, the base being very small, the growth -- the numbers when it grows, the percentage looks larger because the base value is small.
Sure. And 1 thing on this Access Healthcare, what was the contribution this quarter from that? And where do you classify it as part of RoW markets, mainly the sales for Access Healthcare geographically? And what type of benefits of growth we are seeing from this particular company?
Well, we just got 1 month in the quarter, so it is not very large. So the revenue was very [indiscernible] in terms of what it contributed. We have -- so because we acquired this only on the 1st of June, so technically, early the June month revenue came into the quarter. And yes, it falls in RoW, rest of the world.
And as you just mentioned in the previous question that with it coming into the fold, you see ROW markets doing much better now with Access under your grace.
Yes, I do believe that it will look much more better.
Sure. Just one last question. Any sense on what is the type of utilization would be running across all of our plants?
That's basically -- you're looking at between 75% -- We are running at 75% capacity. However, as we speak, we are investing into more capacity, more missionary expansion. So we -- as emissions come into play, our capacity keeps increasing. So we're trying to stay one step ahead of the demand.
Sure. And just last question on the overall EBITDA margin. If I see at the last 12 quarters, we have seen improvement from 13%, 14% to like almost 27%, 28%. And then again, correct to [indiscernible]. So what do you think or -- there's a lot of volatility. What do you think with the type of changes you're doing to the business order in terms of getting more complex and better markets? What do you think over the next 2 to 3 years, not from a short-term perspective, the more sustainable EBITDA margin for our company?
Yes. So I mean, this year, we anticipate about 15% -- 15%, 16% would be more realistic. And obviously, we are hoping next year will get better. If the market scenario and pricing pressures and a lot of ifs are there, but we are hopeful that, that will ease down. And with that, our EBITDA will go by what it used to be. But it's not going to be overnight effect. It's going to take some time to migrate to that levels. But right now, for this calendar year -- financial year, we're talking around between 15% to 16%.
But over the 3 years, do you think 19%, 20% margin is achievable? Or do you think that would be a very tough ask?
No, I think it is achievable. And we are very hopeful that we will be out there.
That will be the last question for the day. I would now like to hand over the floor to the management for the closing comments.
I thank all of you for participating in this con call, and please be safe, and my best to everyone at home. Take care. Bye.
Ladies and gentlemen, this concludes your conference for today. Thank you for your participation and for using [ Dusaba's ] conference call service. You may disconnect your lines now. Thank you, and have a pleasant evening.