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Ladies and gentlemen, good day, and welcome to Q2 FY '23 Earnings Conference Call of Torrent Pharmaceuticals Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhir Menon. Thank you, and over to you, sir.
Thank you. Good evening, and welcome to Quarter 3 FY '21 Earnings call. Quarter 2 revenue growth was around 7%, which was rated by performance of the branded generic market, which constituted around 70% of the total revenue and registered a Y-o-Y growth of 13%. Growth in the branded generic market was driven by new launch momentum and performance of the top brands. In terms of financial performance, during the quarter, revenues were INR 2,291 crores, up by 7% on a year-on-year basis. Gross margins were 72% and has improved on a sequential basis. There is a one-off income of INR 7 crores in the line-item operating income. And adjusted for that, the operating EBITDA stands at 29.4%. I now hand over to Aman for taking us to the India performance.
Thanks, Sudhir. India revenue at INR 1,224 crores grew by 13%. As per AIS data, torrent growth in Q2 was 19% versus the IPM growth of 13%. Torrent growth was aided by new launches, performance of top brands and market outperformance across our focused therapies. As per the end of the quarter, Torrent now has 12 brands with more than INR 100 crores sales as of the MAT September 22 data set and 17 brands in the top 500 of the IPM. A few highlights from the recent new launches, Sitagliptin was launched in July, and Torrent is ranked first out of all the new launch brands in July.
We expect the launch momentum to continue and are positive on maintaining our leadership position in this market. The rest of the launches from the earlier quarters continue to perform well in leadership positions. Our acquisition of Curatio Healthcare was completed on 14th October 2022, and it's been about a week now since the business has been integrated, and we will update on the progress of integration by the end of next quarter. I will now hand over to Mr. Sanjay Gupta for the international business.
Thanks, Aman. Starting with Brazil, which is our largest branded generic market outside of India. Global revenues were at INR 185 crores [indiscernible] by 19%. Constant currency revenues were 121 million, up by 10%. During the quarter, we experienced enhanced competition on one of our key launches, Rivaroxaban and another cardio product, which led to price reduction -- substantial price reduction. So, there are currently 13 branded generic players in the Rivaroxaban. And adjusted for these price reduction, our growth for this quarter would have been close to 20%.
On Rivaroxaban, our market share is progressing well, and it stood at 4% in August as compared to 3% in June. So as per secondary data set from IQVIA, Torrent standard generic business is currently growing at 4.4% as compared to a branded generics market growth of 12.1%. Our CNS sales force is being expanded in a phased model. We currently have 306 web in Brazil, including 41 senior tests that were added in November of 2021. Results of this expansion have been positive. With the market growth of high single digit to double digits, we expect Brazil to continue growth momentum like by performance of our top brands, new launches, field force expansion as well as our generics division. Moving on to Germany. Germany revenues were at 220 crores were down by 12%.
Constant currency revenue was $27 million, a growth of 5%. Revenue bottomed out in Q4 of last year and have grown slightly in Q1 and Q2. Related stability and a slight incremental growth is coming from new launches, of which we had 4 in Q1, and we also had 6 launches in Q2. Recent launches including -- included [indiscernible] Day 1 launch in Q1 and 4 Day 1 launches in Q2. Q2 day one launches were towards the end of September. So, the positive impact will be seen in subsequent months. We expect our sales in Germany to continue on a positive trend at a modest pace until later when you start to kick in towards the end of the year. Moving on to the U.S., U.S. revenues were at 292 crores were up by 3%. Constant currency revenue was at $37 million.
During the quarter, U.S. FDA inspected our manufacturing facility at Indra Gujarat. And at the end of the inspection, we got a Form 483 with 3 observations. Torrent has already responded to the U.S. FDA within the stipulated time and we expect to hear back from the FDA in the next 90 days. To conclude, I would say that we expect our growth momentum to continue in branded generic market, particularly in India and Brazil, backed by new launches, market outperformance, field force expansion and the acquisition of the acquired portfolio. Germany should continue on a modest positive trend. Operator, we can open the call to questions, please.
[Operator Instructions] The first question is from the line of Damayanti Kerai from HSBC.
My first question is on India business. So first, can you split quarter growth into price, volume, and new launches? And continuing question on India businesses, you have seen very healthy 13% growth in 2Q as well as in the first half. So, are -- do you see like sufficient level to sustain this kind of growth? Or do you think we can move to a higher growth trajectory with [indiscernible] coming in some of the previous initiative working for the segment?
So, the AICD data reflection shows 19% growth. So obviously, that's slightly higher reflection this quarter than the reported numbers. But the breakup of the 19% is 6% volume, 9% price and 4% new products. We believe that the internal growth is pretty much in line with the earlier quarter and the market trends. So maybe by next quarter, there should be a better reflection of the IS data set in terms of volumes and new products. In terms of sustaining this growth, we think we are confident of maintaining this level of double-digit growth, 13%, 14%. Last quarter, it was 14%, this quarter is 13. So, no reason to think that there's anything that could change over here as long as the market remains at this level. And of course, by the end of this quarter, there should be just over 2 months of the Curatio sales that will come in. So that will be, I guess, one-off base impact that we should see. But at the underlying level, this level of double-digit growth for India is something that we are confidently sustaining.
My second question is on Germany. So, if I'm not mistaken, earlier you mentioned the new contracts will open a [indiscernible] in September, October of this year. Apparently, that was not the case. So, when you are hoping to build in new tenders with better prices, which you have worked on?
So, I think earlier they communicated that you would start seeing the impact of the attendance from Q3 onwards. So, you would see a slight impact in Q3. You will also see the impact of the 4 launches we had towards the end of September, and then you'll see a larger impact in Q4 of the delivery.
So, majority of improvement should be visible in the last quarter of this fiscal for [indiscernible].
[Operator Instructions] The next question is from the line of [indiscernible] from [indiscernible]. [Operator Instructions]
So just wanted to [indiscernible] regarding Curatio. So, I just want to understand, the actual finance built 2021, amortization of goodwill has been developed for claiming reduction and inept. So how exactly are we going to treat this consideration [indiscernible] Curatio?
So, I think as a process, there is a purchase price allocation, which will be carried out. And as you rightly so as goodwill is concerned, yes, it cannot be amortized. But if you are creating intangibles which are in the form of brands and maybe noncompetence, those amortizations are still available.
The next question is from the line of Kunal Dhamesha from Macquarie Capital. [Operator Instructions]
So just on the Germany when you are expecting a good ramp-up from Q4, would it be on the back of the new product or gaining back share in the older products?
So, it's a cumulative impact rate. So, the impact is coming essentially from some tender wins that we have already had those wins and the sales would start in Q3 and Q4, plus the impact of new launches, of which we've launched 10 products in the first half of the year, and we expect to launch 5 to 7 more products more in the second half of the year.
Okay. And how does the competitive intensity there in terms of when you say you have basically won the tender for some of the products would the pricing be very similar to what you have seen last year or whenever the last tendering happened? Or is it very different now?
No, no competitive intensity in the generics market goes up every year. So, the pricing tends to go down. So, Germany is not very different. The rate of price [indiscernible] acceleration is slightly, I mean, lower than in the U.S. And also, the business is more stable because most tender wins are for 2-year periods. And generally, there is no switching in the -- within the 2-year window. Hence, the market is more stable, but the trends are in line with other generic markets.
Okay. Yes, that's it from my side.
[Operator Instructions] The next question is from the line of Saion Mukherjee from Nomura. [Operator Instructions]
On the U.S. market, one is like what is the intensity of price erosion? Any comments there? And on the Indra side, how many ANDAs are pending from there? And in case -- and if you can throw some light on the nature of observations and in case it gets clear, what would be new for our business, an interesting high-value launch that can come through.
So especially from date have about 19 projects -- products which are pending approval. So, we would get back from the FDA in 90 days. So, I would not like to speculate on what the FDA decision making would be, I mean, we have responded to the best availability with the CapEx that we propose for the 3 observations. And once the FDA if it converts the status from OAI to EAI or AI, we can expect approvals to trickle in the approval for the '19 currently pending projects or entail take after January between 6 to 12 months. So, it won't be an image switch-on type of scenario and these approvals would come in a tickle manner. And what we would expect is that there is already a high degree of competitive intensity on most of these projects. So, the economic impact for towing would be limited, but there are been a few products which have potential for revenues. But let's see how it goes. But first, we have to do FTAs and then get approval and then launch in the market context at that point in time.
And can you comment on the pricing environment in the U.S.?
Price erosion continues, so I would say at a substantially higher level. So, Torrent, as we have only a base order portfolio, we've not essentially had new launches in March of 2019, we would be disproportionately impacted. So, I would say that a mature portfolio like ours, it's double-digit price erosion, it continues. And so -- and we are compensating it with some of the volume increases as well as some of the few launches that we've had in the last 2, 3 years from external parties. But no change in the price erosion declining.
Okay. And another question, if I can ask on the cost. Sudhir, can you throw some light as to what -- how different cost items have moved? Where are they versus last quarter? And how do you see costs the key cost item panning out going forward?
Compared to quarter 1, I would say quarter 2 is looking quite stable. There's no major increases, which we are seeing in the cost side now.
And I mean, is it coming down or is it still at an elevated level?
No, I think as far as the key raw material part is concerned, there are pockets where the prices have gone up and there are pockets where the prices have come down. But on an overall portfolio basis, we -- is what I'm saying, it's looking quite stable. The other big impact item for us was on the logistics cost, which still has not come down. It's at the same level as quarter 3 of '21, '22, I would say.
Okay. So overall, you see the margin profile to sort of remain at the current levels or the gross and EBITDA margin level?
I would think so because I don't see any major change happening at least in quarter 3.
[Operator Instructions] We’ll move on to the next question. That is from the line of Neha Manpuria from Bank of America. [Operator Instructions]
Sanjay, on the Brazil market, you mentioned price competition in 2 of your products leading to lower growth versus what we would have – I didn’t listen. Just wanted to understand, was this not expected and hence, were we surprised by the price erosion because it's a branded market, so what like a onetime revision in pricing that we saw just getting some color on that?
So firstly, Neha, I would say that when we launched the product, it was not expected because we were [indiscernible] launch and besides after we launch about 82 companies that come to the market at lower and lower price points. So, at some time point in time, the launch price becomes nonsustainable. So that was one of the reasons why we took late price decrease on a Rivaroxaban as we know is one of the largest markets in Brazil. And so, we are seeing that -- I mean, initially, our priority remains to penetrate the market to get some of the originator share and we felt that the price reduction at this point would make keep us competitive. But we were surprised by the large number of players who entered subsequent to our launch.
And given that a large part of the business strategy that we talk about is based on new launches coming through and driving that double-digit growth. Is the existing scenario, probably example of how the other launches could also pan out and therefore, could growth in Brazil be slower than what we're expecting given the competition that you have seen in the current quarter?
So, I have lost 7 products in the last, let's say, 18 months. So, it's a little bit all over the place. So, if you take the largest product that we launched, which is Rivaroxaban, there’re 13 players. The other products we launched Desvenlafaxine, there are 11 players. But we've also launched products like Ticagrelor, where we are the only generic on the market. We've launched Rivaroxaban, where we are the only generate. We've launched bisoprolol, -- we are #3 in the market, 3 players. Lacosamide, we are the [indiscernible]. So, it's a little bit all over the map, right? So, the biggest products tend to attract a lot of competitors, but midsized or smaller products, you can still find opportunities where it's not a double-digit number of company terms.
So therefore, we're still confident about growing the Brazilian business double digit based on the…
Absolutely. And also, in the most competitive categories, we are used to winning. I mean, so the current business we have is not in, I would say, by side in limited competition markets. Our business product is rose we spend more than INR 100 crore or closer in Brazil and I stopped counting competitors after '20.
And in the product where you've seen higher competition, have you been able to retain share or grow share despite the higher competition that we have seen?
So, I would say the answer is categorically, yes. So, if you take the largest product, I just mentioned the [indiscernible], so where currently we have the share with you, [indiscernible] double-digit trend that you have on resource [indiscernible]. I don't have to share with you but in the mid-teens. And we also don't share in the large products like [indiscernible] Linapacan Lamotrigine and the brands are very strong. So yes, so we continue to perform well in large competitive markets.
Understood. Aman, on the India market, could you give us some color on how the trade generic is progressing. We were supposed to launch more SKUs in the trade generic. How has that done in the quarter?
Yes, that's on track. I think the growth has been quite robust last 2 quarters as well, and we believe that this target of 2.5% to 3% contribution in the near term is something that would be possible and sustainable. And there is a very stable, steady trend in the business that we're seeing.
Okay. So, the contribution even in this quarter would have been in the 2.5%, 3% range?
That's right, that's right.
Neha, just to complete there on the market share that you were discussing on processed, for example, you have a market share of 23%. Nebivolol, we have 47, [indiscernible] we have almost a 70% market share, [indiscernible], 28. So market shares are quite healthy across the board.
[Operator Instructions] The next question is from the line of Damayanti Kerai from HSBC. [Operator Instructions]
So, my question is on the U.S. business from a slightly longer-term perspective. So, it appears that the market will continue to remain very challenging. And then we have other challenges such as regulatory or other compliance, et cetera. So is there a possibility that a few years down the line, you plan to, I'll say, curtail your presence in U.S. or altogether exit that part of the business and then focus better on the branded generic market.
No, I don't think we are considering that possibility right now. What we've done over the last few years is rebalanced by investments. So, we are not making new manufacturing-related investments to the U.S. We had the [indiscernible] so after that, we believe we have a substantial capacity for the next several years. So, there is no new CapEx to done for the U.S. market. In terms of R&D also, we've decreased the number of projects that we do for the U.S. We've increased the complexity that the goal of the company is no longer to file a high double-digit number of hands, and we kind of rebalanced our R&D investment more in favor of markets like Brazil and Germany. So, all that kind of rebalancing has already taken place. So, in the future, there's this trend is continuing but I would just like to say that there is no plans to become non-competitive or to reduce our presence in the U.S.
Okay. That's helpful. So going ahead, you will continue to focus mostly India and [indiscernible] market from a capital allocation perspective. So [indiscernible] one recent deal. So, any other plans, which are in say near term 12 to 15 months when you plan to add [indiscernible]?
Sudhir, can you comment on that?
No, I think currently, that's it. I mean ratio, we did nothing which is there in the pipeline.
Okay. And my last question on India business, do you have any contribution from PLIC in your current numbers?
Yes, but it's very insignificant, Damayanti.
Okay. And will it be meaningful any time in near term?
Possibly from next year, I would say.
The next question is from the line of Karan Vora from Goldman Sachs. [Operator Instructions]
Am I audible?
Yes.
Also, even I wanted to ask more on the capital allocation financial, from a 3- to 5-year perspective, say, if you're allocating INR 100 of capital, so how would you allocate it? Or what is the thought process of allocating it between your geographies? So that is my first question.
So, inorganic will remain India as a priority. So, I would think that if you're looking at INR 100 in the next 5 years, maybe minimum 90, even up to 100 could be in India or inorganic growth. Organic will obviously depend on the geographical need and maintenance CapEx, which will be insignificant. But for acquisitions or inorganic growth, India remains the only focus right now.
Okay. So now given that you don't have any CapEx requirements like your business will continue to churn a lot of cash. So, can we assume that you will be actively looking out for more inorganic? Or you would pay out dividends? Like how -- what is the cash allocation? How will it be used?
Sudhir, you want to take that?
Yes. So, I think if the cash is not getting utilized or allocated for incremental growth. Sanjay what you say is right, I mean, it will come back as dividends to you.
Okay, fair. And lastly on – although -- basically on India, U.S., India, Brazil, and Germany. So, in terms of growth prospects for the next 3 to 5 years, is this understanding correct that India and Brazil would be double digits and Germany could be high single digits? Or you think you can push the double-digit barrier for Germany as well?
India, Brazil, depending on how the market growth continues, which we believe that this double-digit close to double-digit market growth should continue for both. Then yes, there should be this continued delta of 3% to 4% above market growth that we should be able to deliver. Germany, I'll hand over to Mr. Sanjay Gupta.
Yes. Germany, we're looking at, I would say, a single-digit growth that's more like it. I mean in mid- to high single digits as we get results or more tender. So, we bid for many more tenders recently, and we are awaiting results. And if we come out on the right side, then the growth rate would accelerate if these come out of the wrong time, it will slow down. So, it's a little bit, I would say, mid- to high single digit at the level.
[Operator Instructions] The next question is from the line of Harsh Bhatia from HDFC [indiscernible]. [Operator Instructions]
So, I just wanted to get a sense on the sitagliptin on market right now, particularly at a broader level from the diabetes state space, what really is happening at the type 1 and type 2 level for promoter or a lifting perspective as well as insulin. So that is one. And just wanted to get a sense on the strategy for sitagliptin or products. I think, so the pricing is not too different for the players who have launched at the generic level. So just your thoughts.
So, the new wave of launches in DPP force and SGLT2s sitagliptin being one of the latest ETPs launched in the market. There is a clear wave of a shift in preference of prescribers to these molecules. And while -- since all of the existing brands or molecules such as SUs from earlier are all chronic therapies. So, they cannot see any major disruption. We believe the long-term trend already shows that there is a shift to the newer generation molecule than seems to be so far that sitagliptin is one of the bigger benefactors there. And so, we had undertaken an expansion last year for the chronic divisions where sitagliptin was one of the reasons where we had to focus on additionally. So, I think that's where we have been able to have an edge for some of the competition.
Right. So would it be fair to say, for example, in one of our top 10 products of Azelis [indiscernible] metformin. So, there you see enough stability to continue that product itself?
Yes, [indiscernible] is what we are seeing and even for the market, it's been slowing down, but it's not looking like it's going to degrow from here. It will remain at this level because either patients continue existing brands or this gradually shift when they go back to see the doctor, there's some additional diagnosis required. So, it's a very, very gradual shift. And we've seen this happen earlier also when the earlier wave SGLT2 were launched. The shift was very gradual, but the benefit that Torrent as a diabetes company can get is that we are relatively a small player in liabilities at right line. So, for our diabetes base, these new launches can add a significant amount.
Sure. It helps. Just one last bit on the gastro portfolio. We are seeing a lot of tailwinds since we have exited -- I wouldn't say exited, but since we are at the agent of COVID. So, anything in particular trend-wise, you're seeing in the gastro space for rabeprazole or esomeprazole or anything in particular like you could share.
So, these brands and these markets did see a continued uptake even post the Delta wave last year, which would be Q2 last year. And so that continuation of that base made sure that, that market for the full year was growing very fast. Obviously, that growth would get normalized this year. And hence, the absolute growth numbers may look slightly lower. But overall, the market is growing quite well. Our brand mix flow is a lie brand INR 365 crores on a net basis. This quarter has grown about 14%, and esomeprazole, on the other hand, is going at about 20%, which is nearly a INR 200 crore brand. So, our PPIs together, next one was, which are now nearly 550 crores to 600 crores. We believe high double-digit growth, high-teens growth is something that would be sustainable there.
I think it is a normalized level.
I think it is a normalized level, let’s say.
[Operator Instructions] The next question is from the line of Damayanti Kerai from HSBC. [Operator Instructions]
Now since you have completed [indiscernible] deal, can you provide some more clarity on the funding part of the deal. In the call, you mentioned that it will be likely funded through debt, but now do you have better clarity on that part?
Yes [indiscernible] substantial debt.
Sorry, the entire funding will be through debt?
Yes. It's substantially through debt, I would say.
Okay. And the average cost for that debt will be?
It should be around 7.2%, I would say.
Around 7.2. Okay. So, this year you'll be adding on debt for this funding. On the existing debt you had earlier this plan to what pay off debt substantially. So, for this year, how much debt reduction which we expect on that part?
So, the existing debt, which will be paid off is 900 crores. And then on the top of that is INR 2,000 cores. So, I think there would be a net addition of roughly 1000 --, 100,200 at the year-end.
Okay, so 900 crores are debt payment on the existing obligation and this ratio will add on. So, let’s say basis around 1,200 you are saying?
Correct.
The next question is from the line of Mehul [indiscernible] from Axis Capital. [Operator Instructions]
Sir, just one question. Like the AICD Q2 growth is somewhere in range of like 15% to 18%. [indiscernible] reporting numbers around 13% receive wise of difference before reported and the ACV member. Any specific reason for that?
No, it's not really clear yet, but this is something that happens occasionally. I mean, even in the previous quarter, the market was showing 2% growth and even the normalized -- COVID normalized market was showing mid-single-digit growth. But compared to that, our growth was 14% reported. So, I think if you probably look at the growth on a mat on even YTD basis right now, which is showing about 7% for the market. As against that, Torrent reported growth is about 13%, 14%.
Sir, one question on the other income side, just lower like for this company any specific -- is there any or element in the other reason, sir?
Correct, correct. So, I think that moment which you're seeing is basically because the Forex gains have come down this quarter.
[indiscernible] And also, you have mentioned about some [indiscernible] one of in other operating cost. Is this related to each part of the business?
No, no, related to U.S. part, and it's not 12 crores, it's 7 crores.
The next question is from the line of Kunal Dhamesha from Macquarie Capital. [Operator Instructions]
A very basic question again. So, between, let's say, the Brazil branded generic market and India branded generic market, how would you -- basically, what would be the key difference in the way the business is conducted in both of these markets?
So, India and Brazil are intrinsically similar markets because they're both through physician coverage, and we have a same force in both markets, retail doctors, we have divisions. The regulations are slightly different compared to India in Brazil. For example, there is the NLEM that we have in India as one regulatory framework, which is slightly different in Brazil, which maybe Sanjay can explain a bit more. But broadly speaking, the market dynamics are quite identical in terms of sales and marketing in terms of market potential in terms of competitive positioning.
Great. I mean that's the reason why Brazil was one of the first geographies we chose outside India because if the demand quite closely. So, in the selling market, patients pay for most of the medications themselves and doctor prescriptions are expected a lot. So especially you build equity repositions and that's what we've managed to do over the last 15 years in Brazil. So, it's a long-term game and we are trying the branded generic business quite along the same as it’s 7 we do in India.
And can you just elaborate the difference on the [indiscernible], how they are different?
Yes. So, Brazil is slightly different in the sense that all products have some kind of price regulation. So, what the government does is differentiate the products into 3 categories based on the intensity of competition. So, category 1, 2, 3, 1 being the most competitive and 3 being the lease competitor. So, the least competitive tend to get lower price increases, authorized price increases every year than the most competitive but higher prices we will. So, these are list price increases. And after that, companies are free to do whatever they want in terms of the actual price fees that they take on any particular product. So that's how the difference in India and is this in, Brazil there is no finite list. All products are subject to price regulation [indiscernible] and the price regulation takes place through annual increases that are allowed, but decent level of increase by category of the market.
Okay. But isn't it a little bit counter into like most competitive would be allowed higher pricing business because people will not take it because of the business dilemma, is the way to put it?
Yes. So, market is not concentrated, it is diluted. So, there are 10 players they allow a higher price increase because we think that the competition will drive the price down lower.
Okay, perfect. And let's say, a slightly longer-term question from the India cloning therapy segment, right? So, I think currently, as per IG, we are 36% coming from the chronic and I think maybe 15% is semi-chronic. But when I look at just a chronic which 70% is the [indiscernible] therapy Curatio [indiscernible] CMS. Do you see, let's say, 5, 10 years down the line is, there will be a significant shift in the proportion from different therapies -- emerging therapies like Derma, on [indiscernible] maybe accounting for a proportion, if yes, then how much that proportion [indiscernible]?
Yes. So chronic therapies will remain to be the dominant, I would say, growth drivers for the IPM because of increasing prevalence in lifestyle diseases, particularly diabetes and cardiac. Given the kind of new launches that have now come on the market at affordable prices, that should also lead to further expansion in the diabetes segment because more and more patients can get access to high-quality drugs which was not the case before. So that market should also see a pretty good volume expansion. And we believe that over the medium to long term, there is still a big underpenetration in the overall wellness space through BMN or skincare, which as disposable incomes increase, awareness increases, that segment should also increase from where it is right now. So hard to give a proportion of where it would go, but these other at least 2, 3 areas that we are quite confident about that over the next 5-year horizon, let's say, they should increase in contribution.
The next question is from the line of Karan Vora from Goldman Sachs. [Operator Instructions]
Yes. So firstly, on U.S., what is the current capacity utilization for across all your plants? Between the U.S.
So, I think --
Do you want to take that?
So, I think the plant [indiscernible] all plants put together, the capacity utilization is roughly 54%, I would say.
54?
Yes.
Okay. And like how do you see this going like in 2 years, 3 years?
I think at this point in time, we feel the capacities are enough for the next 3 years. So, no major expansion to be planned.
Yes. No, no. So, I mean can this go to 70, 80 or like how is in that way?
So, I think the higher volumes as we come from generic businesses, right? Which is essentially Germany and U.S. So, we'll have to see how this play out over a period of time. But yes, I mean, there's potential of bringing in large volume products out of Germany into the manufacturing capacities we have. But that will happen in a gradual way. Based on the competitiveness, right? [indiscernible]
Okay. Secondly, on the Brazil, you mentioned that you entered Brazil because the market was broadly similar to India. So, are there any other geographies? Or you think branded generic geographies like maybe Philippines or any other, which you think are interesting and you may want to have a look at it, if you could name some of them, which you think are interesting?
So foreign is already presented in several branded generic markets. So generally, we don't comment upon them because the prices are much smaller. So, the Philippines are roughly a business of about $40 million. Mexico, about $15 million. So those are BG markets of the future where we are investing and we are continuing to grow. So, I would say that there are at least 7 to 8 BG markets where we have a decent momentum.
Okay. But no plans as of now to like make something meaningful out of any of those specific --
No, no. Don't get me wrong. The plans to make it meaningful, it's underway so as soon as it becomes like financial, we will start communicating on it. So, it's to work that is done, which is not put in the public eye yet because it's still, I would say, quite modest in terms of overall size.
Got it. Okay. So, you can't name 1 or 2 or Philippines and Mexico would be the 1 or 2 which you referred?
Yes, I can -- I mean we are very decent in Malaysia. We are good in Thailand. We are building in Kenya, South Africa, the other country, Russia, we are doing effort. So, all of these are more in the, let's say, $10 million in each country. So, I would say that we will give them prominence once they come across the $50 million threshold.
Okay. Got it. And last on the Forex hedging part, like what is the general company policy? Like what percentage of revenues Forex revenues are hedged and like for how long, what period?
So, we do 12 months forward cover every month on a rolling basis. So, at any point in time, we are covered for the next 12 months. 100%.
Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Sanjay Gupta for his closing comments.
Sure. To continue, I would just say that we expect our growth momentum to continue in the [indiscernible] generic market, particularly in India and Brazil. This would be backed up by our new launches, market outperformance of current brands, field-force expansion, and acquisition of the acquired portfolio. Germany should continue on a modest positive trend. And with that, I would like to conclude and wish you all a happy Diwali and a good way come next week. Thank you.
Thank you. Ladies and gentlemen, on behalf of Torrent Pharma Limited, that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.