Ipca Laboratories Ltd. — Call Transcript 2025

Jun 2, 2025

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THRU ONLINE FILING

June 2, 2025

BSE Ltd. Phiroze Jeejeebhoy Towers Dalal Street Mumbai 400 023 Scrip Code – 524494

National Stock Exchange India Limited, Exchange Plaza, C-1, Block-G, Bandra Kurla Complex, Bandra – (East). Mumbai-400051. Scrip Code : IPCALAB

Dear Sirs,

Pursuant to Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, we are enclosing herewith transcript of our Conference Call which was held on Friday, 30[th] May, 2025 to discuss the Company’s Q4 FY25 earnings and business update.

Thanking you

Yours faithfully For Ipca Laboratories Limited

Digitally signed by Harish Pandurang Kamath Harish DN: c=IN, o=Personal, title=1715, pseudonym=585f434c9c014c338904fe5f4cd8762a, 2.5.4.20=955479ec580ea690ffd8de8b74071cf6f1ee24 7da687a7ae82030a7ae82c443b, postalCode=400063, Pandurang st=Maharashtra, serialNumber=72050fb9fadcbc5de6404685117b8355 792f5784c7617d9c4cae2a3887d6b809, cn=Harish Kamath Pandurang Kamath Date: 2025.06.02 17:17:42 +05'30'

Harish P. Kamath Corporate Counsel & Company Secretary

Encl: a/a

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“Ipc a Laboratories Limited Q4 FY ‘2 5 Earnings Conference Call” May 30, 2025

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MANAGEMENT: MR. AJIT KUMAR JAIN– MANAGING DIRECTOR – IPCA LABORATORIES LIMITED MR. HARISH KAMATH – CORPORATE COUNSEL AND COMPANY SECRETARY – IPCA LABORATORIES LIMITED MODERATOR: MR. NITIN AGARWAL – DAM CAPITAL ADVISORS LIMITED

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Moderator:

Ladies and g e ntlemen, good day, and welcome to Ipca Labs Q4 FY '25 Ea r nings Conference Call hosted b y DAM Capital Advisors. As a reminder, all participant lines will be in the listenonly mode a n d there will be an opportunity for you to ask questions aft e r the presentation concludes. S h ould you need assistance during the conference call, please signal an operator by pressing star then zero on a touchtone phone. Please note that this co n ference is being recorded.

I now hand t he conference over to Mr. Nitin Agarwal from DAM Capita l Advisors. Thank you, and ove r to you, sir.

Nitin Agarwal:

Thank you, Yusuf. Hi, good afternoon, everyone, and a very warm welcome to Ipca Laboratories Q4 F '25 Earnings Call, hosted by DAM Capital Advisors Li m ited. On the call today repres e nting Ipca management, we've got Mr. A.K. Jain, Managing Director; and Mr. Harish Kama t h, Corporate Counsel and Company Secretary.

I will hand o v er the call to Mr. Jain to make the opening comments, and we w ill open the floor for questions. Mr. Jain, please go ahead, sir.

Ajit Kumar:

Thanks, Niti n , and DAM Capital Advisors for organizing this call, an d welcome to all participants. Today's earning call and discussions and answer given m ay include some forward-look i ng statements based on our current business expectation. This m ust be viewed in conjunction w ith risks that pharmaceutical business faces. Our actual fina n cial performance may differ fr o m what is perceived or projected.

You may use your own judgment on information given during the call. Our domestic business for Q4 has d e livered a growth of around 11%. And overall, for the whole of the year, it has delivered aro u nd 12% business growth.

Mid-March ' 2 5, Ipca is ranked at the 16th as pe IQVIA as fastest-growing c o mpany among the top 20 player s . Ipca continued to improve its market share. In last quarter o f Q4 also, we have improved ou r market share by around 9 basis points to almost around 2.07% from 1.8% in mid-March ' 2 4.

Both on acut e and chronic segment, we had delivered better growth comp a red to the market. As per IQVI A , overall market growth was around 8%, Ipca delivered at a growth of around 13.2%. On a c ute segment, the market growth was 6.9%. Ipca delivered a round 10.9%. On chronic, mar k et growth was around 9.8%. Our growth is tracked by IQVIA as 17.9% overall.

Compared to industry, our contribution of chronic segment is lower, but w e are fast catching up. The mar k et gets around 61% from acute and in case of chronic, it is 3 9%. For Ipca, it's around 66% f or acute and 34% for chronic. Market is not identifying rheu m atoid arthritis as a chronic seg m ent, but this is more chronic than any other segment becau s e it's all diseasemodifying a g ents, which are to be taken for life. But if you include that, then our chronic segment cont r ibution would be much higher.

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You will rec a ll that post-COVID, we have increased our coverage to the m e tro cities, and that has helped o u r company to get better share from metro market. For mar k et, let's say, from 2022 to 2025 . The chronic 30 metro cities are giving a contribution of aroun d -- in 2022, it was around 32.66%, which has moved around a 34.19% in '25. So there is an increase of metro cities contrib u tion to the market has gone up by 1.53%.

But as far as Ipca is concerned, our market share in '22 was around 32.65 % for all 30 metro cities. It has n ow moved to around 37.52%. So there is a significant increas e of almost around 4.67% contri b ution, which is coming from metro. So that is helped by our overall metro city coverage, wh i ch post-COVID, we have changed that and that has given us -- and that's one of the reasons t h at we are also growing faster in the market.

Our export f o rmulation business -- the branded formulation business has del i vered a growth of around 10% for FY '25 from INR527 crores to around INR582 crores. For Q4, branded formulation b usiness has delivered a growth of around 3%. Generic bu s iness delivered a growth of ar o und 15% from INR312 crores to around INR357 crores for t h e quarter FY '25. And for full f inancial year, the business has grown to around INR1,336 crores from INR1,248 crores.

So there is a g rowth of around 7% in overall branded business, which includ e s the institutional business. Th e lower growth for the financial year in generic business is mainly due to decline in business i n South Africa from INR113 crores to around INR39 crores, a decline of almost around 74%, t hat's mainly on account of the loss of certain tenders in South A frican market.

Our API business has delivered a growth of 2% for the quarter -- for the Q4 2025. And for the whole of the financial year, there is just a 1% growth in the API business. S o we have, in the current year, improved our margins trend. Overall, if you look at stand-a l one Q4 EBITDA margins is at around 21.19% as against 18.5% in Q4 '24. There is an impr o vement of almost around 2.66 % and absolute term your EBITDA margin has gone up from INR279 crores to around INR3 4 7 crores, an increase of almost around 24%.

Stand-alone F Y '25 EBITDA margins is around 22.66% as against 19.29% f or FY '24. There's an improve m ent of almost around 3.37%. And overall EBITDA margins h as gone up from INR1,189 cr o res to around INR1,533 crores, and there is an overall increas e of almost around 27%.

Consolidated EBITDA margins for Q4 is at around 18.24% as against 14.98% in Q4 FY '24. There is aga i n improvement of almost around 3.26%. And overall EBIT D A has gone from INR305 cror e s to INR410 crores. There is an increase of almost around 3 5%. Consolidated EBITDA ma r gin for FY '25 is at around 18.94% as against 16.72% in FY '2 4 , an improvement of around 2.22%. And overall EBITDA margins has gone up from I N R1,288 crores to INR1,693 cr o res. There is an improvement of almost around -- an increas e of almost around 31%. And w e have delivered better margins as against the guidelines given f o r the year.

Our overall g uidance for the year was around 18% kind of consolidated E B ITDA margin as against that, w e have delivered around 18.94% overall. Our subsidiary Unic h em has delivered

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a consolidate d growth of around 18% from INR1,785 crores to around INR2 , 211 crores overall business, an i mprovement in EBITDA margin from INR87 crores to almo s t around INR265 crores. And i n percentage term from 4.87% to around 12.55%.

And if you look at last 2 quarters, EBITDA margin, it was in the range of ar o und 14% to 16%. With overall improvement in business as well as improvement in operation a l efficiencies, we could deliver the overall better EBITDA margins for Unichem.

The guidanc e for next financial year -- current financial year is that we'll continue to grow around 8% t o 10% in the FY '25 and we expect our EBITDA margins to f u rther improve by around 1% c o nsolidated basis for the -- from 18.94% to around 20% for th e current financial year.

Having given the broad numbers, now I'll request participants to ask for questions.

Moderator:

Surya Narayan Patra:

Thank you v ery much. First question is from the line of Surya Na r ayan Patra from PhillipCapita l . Please go ahead.

Sir, my first q uestion about the U.S. business potential, see -- and U.S. busi n ess that we would have done. S o now since we have integrated Unichem fully, so what is the U.S. revenue that we would ha v e reported in the consolidated number for that market? And al s o, if you can give some sense n o w since it is integrated, part of our U.S. business is getting ro u ted through them also.

So like -- in terms of the product -- new product introductions and the in c remental business that you wou l d have added. So if you can give some sense that, okay, what is the incremental U.S. sales th a t we have added this year because of our own product? And w hat is the overall U.S. number that we have seen for the group as a whole? And what is o u r outlook that we would be hav i ng for FY '26, sir?

Ajit Kumar:

As far as Ip c a is concerned, U.S. has not made any significant overall contribution to the overall generic business, I think we have stand-alone basis, I think we h a ve shipped goods worth aroun d INR65 crores, but most of the shipment has happen in th e third and fourth quarter, very small shipment has happened in the earlier quarters. So ove r all, and as transit time and all p ut together, I think on a consolidated basis, it is just contribut i ng around INR22 crores or IN R 23 crores kind of business.

So it has not contributed a significant business in the current financial ye a r. We have just, I think, in last financial year, we have shipped around the 3 products and f o urth product was shipped in th e month of March. And I think in current year, we will be ship p ing almost around 7 more produ c ts.

So I think o v erall, the current year, I think overall U.S. business should contribute around INR100 cror e s for us in the current financial year. That is what is our interna l budgets are there for U.S. busi n ess for final sales in U.S. market. And as far as Unichem is co n cerned, Unichem

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had achieve d a U.S. business of around INR1,317 crores as against I N R1,077 crores in previous fina n cial year.

So they have delivered overall growth of around 22%, but this also includ e s the business of Bayshore, w h ich was earlier group with Ipca and now it is grouped with U nichem now. So around 22% g rowth they have delivered. And overall, Unichem has delivere d a -- for whole of the financial year, a growth of almost around 19% in the overall turn o ver. And I think including ot h er income, it's around 18% overall -- is the overall gro w th Unichem has delivered.

Surya Narayan Patra:

Ajit Kumar:

Sure, sir. Sir , just an extended point on the U.S. business itself. So now since Unichem is integrated, o u r R&D also should have seen some kind of integration beca u se at the time of acquisition it s elf that you have been talking about rationalizing the consoli d ated R&D spend by -- so -- w hat is the kind of -- because there is no greater filing mom e ntum that we are witnessing. S o going ahead, what would be your spend for the group as a wh o le or for let's say, on a consolid a ted level basis? And what R&D priorities that you would be h a ving going ahead in terms of A N DAs in terms of APIs.

I think Ipca h as already started filing. I think first filing has been done in t h e -- I think, in the month of Ap r il in current year. And I think in current year, we should file al m ost around 6 to 7 products. An d overall, we have capacity to develop almost around 20 p r oducts, so which globally for I ndia, ROW and all these other developed markets. So overall , that's the kind of development will happen. As far as R&D expenditures are concerned, we ar e at almost around currently aro u nd 3.25% as far as the Ipca concerned. And the stand-alone I' m talking.

And this also includes the biotech, and this expenditure is likely to be aroun d 4% in the current financial yea r . And as far as Unichem is concerned, their business de v elopment, overall development cycle because initially, their focus was shifted towards overa l l let's say, market extensions a n d filings in the various markets of their existing products. S o that journey is going on.

And I think t h ey will also be filing around 3 to 4 products in current year. So what we have done is, wha t ever duplications was there, that has been avoided. But rest, Unichem team is independentl y doing their work and Ipca team is independent. So nobody from Ipca, let's say, the senior m anagement is, let's say, our operating management of R& D of Ipca is not supervising t h e Unichem R&D. Unichem R&D is completely independent.

Surya Narayan Patra:

Okay. Just la s t 1 question from my side, sir. So in fact, the export growth g e nerally is been -- our export w a s considered to be the growth engine for Ipca some time back. But in the recent period that o b viously we have seen -- they have faced challenges becaus e of, let's say, the impurity issu e in a couple of products and initiated by the Europe. And this yea r , FY '25 numbers are also kind of similarly weak, so like how should one really think about it? The -- and you also mentioned about a couple of this thing c o ntract getting lost in the South A frican market. Is it because of the cost issue or so could yo u give some sense about your o v erall export growth plans because that used to be the kind of a r eal driver for us.

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Ajit Kumar: And let's say, overall export formulation business will continue to have a growth of around 10% to 11% f or us. And we are now the working on to say, expediting our f i lings I think R&D is gearing up and already as I talked that we should be able to do almost ar o und development of around 20 products in a year. So that is what is currently happening and I think the U.S. market and E u rope market and all. Now a number of filings are all increasin g now.

Surya Narayan Patra:

Okay. But th e guidance -- growth guidance that you have mentioned 10%. S o that is in no way showcasing a ny kind of synergy benefit of acquisition or the cross-selling b e nefit or anything. It is a normal i zed growth possibly which we just maintained.

Ajit Kumar:

So Unichem' s portfolio, I think, let's say, filings have started happening, b ut approvals will take some m o re time. So till the time those approvals comes, we are not inc l uding them in our guidelines. S o as and when those approvals will come, we will start adding those products to our overall -- to our basket, yes. So that is taking some time.

Surya Narayan Patra: Is it more ab o ut non-U.S. market, sir?

Ajit Kumar: Yes, it's a no n -U.S market. Yes.

Moderator:

Next questio n is from the line of Damayanti Kerai from HSBC.

Damayanti Kerai:

My question i s again on export market. So if you can talk a bit more about performance in key markets like U .S., Australia and New Zealand, et cetera, as well as in som e branded market. And for thes e markets, specifically the bigger one, like on an overall bas i s, you mentioned 10% to 11%, but if you can also talk like how should we look at growth in t h ese bigger market in both gener i cs and branded parts.

Harish Kamath:

As far as the branded formulation business is concerned, we have grown t h is year by around 10%. CIS, w h ich is the large branded promotional market, the growth is m u ted at around 2%. And for the c urrent financial year, we are guiding a growth of around 1 0 % from the CIS business. Ap a rt from CIS market, all other markets have grown well in th e branded generic business of ROW market.

West Africa h as grown by 34%. Latin America has grown by 17%. And S outheast Asia has grown by 24 % . Only in case of Middle East, Africa, there is a degrowth of about 21%. It is a small market contributing around INR70 crores.

As far as the generic business is concerned, Europe has grown by 12% -- sorry, Europe has grown by 10 % . And U.S. is a new market. Last year, there was no sale th i s year, the sale is around INR6 5 crores. Australia and New Zealand, there is some inventory r ationalization. So there is a de g rowth of around 11% from INR301 crores, the market has co m e down to around INR268 cror e s.

Canada, ther e is hardly any growth, INR116 crores was last year. This y ear, it is around INR113 cror e s. And South Africa, Mr. Jain has already said, because of loss of certain tender products, the r e is a degrowth of around 65%. So overall, generic business is f lat INR981 crores

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last year. Thi s year also INR981 crores, whereas institutional business from I NR267 crores, we have grown t o around INR355 crores, a growth of around 33%.

So including institutional business, overall generic business there is a growt h of 7%. The total export busin e ss there is a growth of 8%. So 10% is promotional market, a n d generic market, including in s titutional business, 7%. So overall, generic business, there is a formulation business, the r e is a growth of about 10%. Damayanti Kerai: Okay. Sir, ju s t a question, CIS, like why we saw a 2% growth? What has ha p pened there? Harish Kamath: It is mainly because of this currency fluctuation because dollar versus ruble rate. So it crossed INR90, now i t has come down to INR79. So we feel this year, the growth wi l l be better. Damayanti Kerai: Okay. Okay. A nd then my second question is... Harish Kamath: Even though there is a volume growth in the market. Value growth is only 2 % because of the currency fluc t uation. Damayanti Kerai: Okay. So vol u mes were healthy, but because of this currency fluctuation on a reported basis... Harish Kamath: That is right. Yes, yes. Damayanti Kerai: Okay. That's helpful. My second question is if you can update on some of t h e newer projects, which Ipca w as working on, so some new plants, et cetera, where work ha s been ongoing for last year or s o . So if you can update on those. Harish Kamath: Four of the m anufacturing -- new manufacturing greenfield plant will start t rial production in the current f i nancial year, that include monoclonal antibody facility, whic h is coming up at Pithampur, M adhya Pradesh. So one intermediate API manufacturing facility is coming at Wardha near N agpur. One new for m ulation facility for domestic market is coming up at Dewas. S o these are the 3 manufacturin g facilities that are coming up in India, and 1 more greenfi e ld manufacturing facilities bei n g set up by Pisgah which is our step-down subsidiary in Nort h Carolina. So that facility will a l so start trial production in the current financial year. It will be i njectable and oral liquids.

Damayanti Kerai: So all the pl a nts, they will start... Harish Kamath: Trial product i on will start in the current financial year. Damayanti Kerai: Okay. And then scale up should be more visible in coming years, right? So t h is year mainly... Harish Kamath: That is right. F Y '27 and '28 onwards, you will see some scale up in the busi n ess. Damayanti Kerai: Okay. And my last question is on Unichem, although like margins have moved up substantially. But when do we see it moving closer to the consolidated avera g e because during, I guess, the d eal, there was talk about cross-market selling, et cetera. So I understand on the

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raw material a lso procurement part, a lot of synergies has been achieved, bu t what about other margin drive r s for the Unichem portfolio.

Harish Kamath:

No, no, whatever guidance we gave at the time of acquisition of Uniche m , many things are work in prog r ess. Since it is a regulated business, everywhere, there are issu e s relating to those year applicat i on, registration, all those things are going on. The benefit of a ll this integration, what we spo k e at the time of acquisition, hopefully, we'll start yielding so m e benefit from the current finan c ial year onwards.

Damayanti Kerai:	Okay. So '26 onwards, we should be seeing some more...
Harish Kamath:	Yes, you will start seeing the benefit.
Ajit Kumar:	See we were talking around [INR300 crores kind of 24:07] EBITDA margin s after 2 full year
	of its operatio n. And I think we already achieved around INR264 crores ov erall in Unichem.
	That is withou t, let's say, not a single API of Ipca is qualified as still in the Unichem because
	they are work in progress. And not a single product of Unichem has been approved in other
	markets. Soa ll those synergies are yet to -- yet to be. But still, let's say, the margins will keep
	on continuous ly keep on improving.
Damayanti Kerai:	Okay, sir. An d as some of these factors start delivering, as you mentioned , maybe this year
	onwards, wes hould be seeing a better pickup in the margins?
Ajit Kumar:	Yes.
Moderator:	Next question is from the line of Chintan Doshi, an individual investor.
Chintan Doshi:	Sir, I see a lot of activities are going at the Pithampur facility that has belonge d to the Unichem
	laboratory, rig ht? So as you already mentioned...
Harish Kamath:	That is API fa cility.
Chintan Doshi:	Right. So can you give us a light like are we -- like it is a start -- trial prod uction is going to
	start or howi t is like it is going to contribute from this year onwards? Orw e are looking just
	the numberw ill be going to contribute next year onwards?
Harish Kamath:	It will be som e next financial year onwards. This year, trial production will start, but scale up
	will happeno nly in the next financial year.
Moderator:	Next question is from the line of Shiva from Purnartha Investment Advisors.
Shiva:	So my firstq uestion is with respect to the capex. We've spent somewhe re about INR775
	crores. If you could just throw some light on the breakup of where we spen d the amount and
	for the next ye ar, what will be the total capex of our company.
Harish Kamath:	Apart from ro utine maintenance capex, which will be around INR250 crore s, INR300 crores
	level. I told yo u 4 projects are currently under implementation, which will sta rt trial production
	in the current financial year.

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Shiva: Okay. And the breakup of what -- where we are spending in. Harish Kamath: So around $ 2 0 million is for the injectable and oral liquid facility that is c o ming up at North Carolina, U. S . around INR250 crores for a formulation facility for domestic market coming up at Dewas, an o ther INR200 crores, INR250 crores for API and intermediate f acility coming up at Nagpur, p l us monoclonal antibody facility another around INR250 cro r es. These are the major capexs , which will get capitalized in the current financial year, and al l those facility will start trial pro d uction. In this financial year, that is FY '26. Shiva: Okay. So bio s imilar one, you had something in Pithampur that is the same? Harish Kamath: That is the sa m e one, which we'll start trial production in the current financia l year. Shiva: Okay. And y ou've given the overall guidance of 8% to 10% and EBITD A margin of 20%. How are the U nichem and the stand-alone breakup? Like if you could just t h row some light? I mean, at the stand-alone level, how do you look at the growth and the m argin at Unichem level? Harish Kamath: Unichem cu r rently around INR2,000 crores annual sales and around 14 % , 15% EBITDA margin. So w hatever guidance we gave at the time of acquisition of Unich e m, they achieved that 1 year b efore our guidance. Hopefully, current year also, this sho u ld improve their EBITDA ma r gin by about 1% and about 8% to 10% growth in the top line. But whatever -- the synergy of our acquisition of Unichem, their products we are taking to the market wher e they are not present as of now, Australia and New Zealand, E u rope, that work in progress, tha t benefit will come perhaps a year after next year. So dossiers a re getting filed, it will get regis t ered, then we will slowly start marketing their product. Shiva: Understood. A nd as of now that the Bayshore is only INR22 crores in Uni c hem's revenue in the INR2,011 crores that they... Harish Kamath: No, no, Bays h ore is about INR150 crores, you could say top line. Unichem a cquired that from 1st of Octobe r . Shiva: Okay. You s a id we had only INR22 crores of sales in U.S. Harish Kamath: No, no, that i s Ipca. So we also post our -- yes, yes, facility clearance, we sta r ted marketing our generic form u lation through Unichem in the U.S. So from our side... Shiva: Unichem als o use Bayshore's... Harish Kamath: Bayshore, I d on't manufacture anything for Bayshore. Bayshore is acquirin g products on from other facilitie s , including from Bangladesh and all. Shiva: Okay. Okay. And with respect to the stand-alone, we had something a b out the -- in the institution wi t h respect to the funding issues that U.S. has cut down. How are we looking at that for the n e xt year? What kind of institutional growth are you looking at?

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Harish Kamath:

Harish Kamath: There is no exact clarity in that. Having said this, we are hoping we should grow that institutional b usiness in the current financial year also. That is FY '26. This y ear, the growth is more becaus e a year before our injectable line was undergoing some mod e rnization and all, that is why t h e sales were less in FY '24. That is why you feel current y e ar that is FY '25 growth is hi g her in the institutional business. From that level also, we see this year also we should grow t hat business maybe around 8% to 10%. Shiva: Okay. And h ow do you look at the API things sizes wise? Are there a n y stability that is coming? Or h ow do you look at your API, volume and the price. Harish Kamath: API business and pricing was at peak during COVID time. From that time o nwards, there is a consistent do w nward trend in the API pricing. So even though we have im p roved our volume compared to w hat we sold in -- during COVID time, you don't see that in th e value because of the prices co n tinuously coming down. But now there is a stability slowly, w e feel it will start slightly impr o ving from this level. So in the current financial year... Shiva: The volume g rowth will be the top line growth because there will be stabilit y in the prices. Harish Kamath: That is corre c t. Yes. So FY '26, you will see volume growth as well as pri c e growth when it comes to the A PI business. Shiva: And how are you looking at it after like in the second half onwards, it will b e a slightly higher growth? Or y o u look gradually... Harish Kamath: We are seein g some picking up in the market in the fourth quarter itself. Shiva: Okay. And t h e domestic one. So consistently, we've been doing -- we've be e n gaining market share, and w e 've done quite good in the domestic arena. So you feel that wi l l be -- state -- you will keep wi n ning market share in [inaudible 0:32:28] and how are you see i ng the position in domestic? Harish Kamath: Next 3 to 4 y ears, we will beat the market growth, and we should grow 1. 5 x market growth. That is what is our -- historically, we have done. And going forward 3, 4 years, that is our guidance. Moderator: Next questio n is from the line of Kunal Randeria from Axis Capital. Kunal Randeria: Sir, you have , I think, around 7,000 marketing reps in India. So which mean s the PCPM is just over 4 lakhs. So with your current portfolio, what do you think will be the o p timum PCPM? Harish Kamath: See, now the business is growing around 12%. If we don't add any PSR in t h e market, our per man product i vity also increased by 12%. But having said that, every ye a r, we add in the normal circumstances, 400 to 500 people just to take care of increas e in the medical practitioners and all. So that trend will continue. So even though value- w ise, you don't see much per ma n productivity because of our nature of products, what we ma r ket, anti-malarial, where volum e s are very high, value is very low. So that also has some imp a ct on this per man productivity.

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Kunal Randeria: Sure, but the r e's still scope to increase at to get it to maybe 5 lakhs, 5.5 lakhs in 4 to 5 years?

Harish Kamath: So currently, it is around 4 lakh and 4.3 lakhs. It should grow around 8%, m a ybe compounding next 3 to 4 y e ars. With the addition of around 400, 500 people. Kunal Randeria: Got it. So th a t will continue for the next 2 years. Got it. Sir, secondly, on t he U.S. business, your -- I mea n now that you are kind of ramping up your filings and everyt h ing, do you think realistically t h e kind of filings here in the next 3 to 4 years, this business could be a INR300 crores, INR4 0 0 crores business, excluding Unichem, your own business? Harish Kamath: That is Ipca p roduct, manufactured at Ipca India facility, correct? Kunal Randeria: Yes, sir. Harish Kamath: So whatever f igure we have given is possible. So 10 years back, we were d o ing about INR240 crores with o nly around 8 products. So we just started. Some products h ave reached U.S. another 5 to 6 products will get commercialized in the current financial yea r . Thereafter, there is a pipeline f or new product commercialization year after year. And we ha v e also ramped up now develop m ent of products for the U.S. market. Kunal Randeria: Right. But ju s t to clarify, your strategy has been to back it with your own A PIs. So wherever we have the D MF filings, you use that DMF filing for [inaudible 0:35:27]. Harish Kamath: Most of the f i lings are backed by my own APIs. Moderator: Next questio n is from the line of Dharmil Shah from Dalmus Capital Manag e ment. Dharmil Shah: I have more specific questions on Unichem. We've seen the fourth qua r ter results. Gross margin sharp l y declined from 64% in 3Q to 55%. Was there any one-off i n these 2 quarters? Or what was t he reason for... Harish Kamath: No, no, it is m ajorly because of the product mix change. Dharmil Shah: Okay. I mean, and any specific therapy that we shift -- tilted towards or... Harish Kamath: No, no, nothi n g like that, depending on market situation, market demand, market growth, plus minuses will h appen in the therapies some therapies, some products give bet t er margins. Some products give slightly lower margin. So majorly, the impact is because of tha t . There is nothing one-off or an y thing in this. Ajit Kumar: In fact, fourt h quarter, the contract manufacturing has gone up from INR5 8 crores to INR90 crores. So th e re, the margins are lower yes because material cost is higher there. There is no marketing an d other costs involved. Dharmil Shah: Understood. A nd on the guidance, you give 1 year guidance of about 10% r e venue growth and 1% improve m ent in EBIT margin. But once we assume the synergies come i n, in the next 2 to 3 years, geo g raphical synergies or maybe API coming in from it. What d o you expect the revenue gro w th and margins for Unichem 2 to 3 years from now?

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Harish Kamath: See, ideally, o ur intention, the margin should grow to around 18%, 18% t o 20%. That is the maximum w h at we can achieve because they are into only generic business, and API business. I'm talking a b out Unichem. Dharmil Shah: Understood. R evenue growth over the next 2 to 3 years? Harish Kamath: Around 10% to 12%. Only silver lining, they have a lot of capacity avail a ble to grow their business. So there is no need for any fresh investment in facility creation in the immediate future. Dharmil Shah: Understood. S o what could be the utilization right now as on date? Harish Kamath: So their maj o r formulation facility, Goa, just last year commenced commer c ial production. So there, they c a n do a lot of production. There is a lot of capacity available th e re. So capacity is not a constraint for Unichem. Dharmil Shah: Understood. A nd lastly, I mean are there any effects of U.S. tariffs on p h arma, very broad question, but are you seeing any effects... Harish Kamath: Whatever guidance we have given without considering what you spoke. So i f that comes, there will be defini t ely a variation in whatever guidance we have given. Moderator: Next questio n is from the line of Rashmi Shetty from Dolat Capital. Rashmi Shetty: Couple of cl a rification. How much capex have we spent in total capex spe n d in FY '25? And how much ar e you guiding for FY '26, the total number? Ajit Kumar: Currently is a round INR400 crores. Harish Kamath: So FY '24 pl u s FY '25 put together -- sorry, FY '25 plus FY '26 put togethe r , it will be around INR1,000 cr o res. Rashmi Shetty: INR1,000 cr o res. And how much of that we have already spent in '25? Harish Kamath: Around INR 6 00 crores, we have already spent. Rashmi Shetty: So INR400 c r ores more is expected to be in FY '26? Harish Kamath: That is corre c t, yes. Rashmi Shetty: Okay. And si r , in the API segment, what is the growth guidance for FY '26, s ir? Harish Kamath: Around 6%, 7 %, Rashmi, not beyond that. Rashmi Shetty: 6% to 7%. A n d last one clarification, which I wanted. Earlier, you mentioned that institutional business plu s generic business will give a growth of around 7%. So in c a se of the generic business is g r owing flat for FY '26 also then your institutional business gro w th will be around 24%, 25%, ri g ht?

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Harish Kamath: No, no, no. F Y '26, we are projecting a growth of 10% in the generic business, including institutional b usiness, both put together.

Rashmi Shetty: Okay. So yo u r generic... Harish Kamath: The planned g eneric business or in the current financial year, excluding insti t utional business. Rashmi Shetty: Got it. So yo u r generic segment, excluding institutional business will also g r ow around 8% to 10% and you r institutional will also grow in that range? Harish Kamath: Around that l i ne, yes. Moderator: Next questio n is from the line of Tushar Manudhane from Motilal Oswal Fin a ncial Service. Tushar Manudhane: Just on this p r oduct filings from Ipca side for U.S. market. So the one which you report for FY '26, these are like what refiling of the already approved product for U.S. mar k et or... Harish Kamath: No, no. They are fresh development, fresh filing Tushar. Tushar Manudhane: Understood. S o 67 new filing... Harish Kamath: Everything g o t over in the last financial year. Tushar Manudhane: Got it. And s ir, any particular reason you would like to highlight where the business with products bei n g shipped but still taking longer is the competition pressure s o much that it's a little difficult to push our product after like after getting into this market afte r many years. Harish Kamath: It is nothing like that as and when the inquiry gets quoted, we do partici p ate. But already, people are w i th somebody else in contract and all. So it will be a gradual pr o gress as far as the U.S. generic business is concerned. Having said this, whatever benefit w e have cost, other thing, own A P I that remain today also. Tushar Manudhane: Understood. U nderstood. And just lastly, how many -- I missed that numbe r , how many MRs to be added f o r FY '26? Harish Kamath: Around 400. Moderator: Next questio n is from the line of Rahul Jeewani from IIFL Securities Limite d . Rahul Jeewani: Yes. Sir, thi s revenue guidance which you gave of 8% to 10% for FY ' 2 6, Isn't that a bit conservative n umber given that -- in the domestic business, we are beating market growth by 300, 400 bas i s points every year. And for the export businesses as well, w e have generally indicated ab o ut a 10%, 11% kind of growth excluding the API business . So are we a bit conservative i n terms of the overall revenue growth guidance for next year? Harish Kamath: If you see o u r business segment and turnover, API grows by 6%, 7%, a n d all formulation business, exc l uding India business grew by around 10% and India grows b y around 12%. The overall growt h will be 8% to 10% only.

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Rahul Jeewani: Okay, sir. So this is including Unichem as well. You were talking about.

Harish Kamath: Yes, yes. Ev e n Unichem business also will grow around 8% to 10%. So ove r all, company as a whole group l evel also, we should grow around 8% to 10%. Rahul Jeewani: Sure, sir. An d sir, once the integration benefits of Unichem start playing o ut going into the next couple of years, when do you think that this growth of 8% to 10% would accelerate going forward? An d which... Harish Kamath: Around -- Th a t time, the top line should grow around 12% -- 12%, 13%. Rahul Jeewani: Okay. Sure, s ir. And sir, on the U.S. business, I missed the number for it. S o at 1 point, you said INR22 c r ores to INR23 crores. And at some other point, you also indic a ted INR65 crores. What is the U .S., sales... Harish Kamath: In our stand - alone accounts, what we have built to Unichem U.S. is IN R 65 crores. Okay. Whereas in t he consolidated account what actually got sold by Unichem U.S. in the U.S. market is tha t INR23 crores. So it is INR25 crores, yes. So what we ship is I N R65 crores, what they sold is I N R25 crores.

Rahul Jeewani: Okay, sure sir, last question on Unichem. You indicated about a 100 basis point margin expansion fo r Unichem going into next year. Now would this margin expan s ion be on the full year margins of Unichem or the 14%, 16% margins which Unichem had in the second half of last year? Harish Kamath: No, no, it is o n the whole year, we are talking. Moderator: As there ar e no further questions from the participants, I would now like to hand the conference o v er to the management for the closing comments. Harish Kamath: Hopefully, w e have answered all the questions. I don't think there is anyth i ng further to add. Thank you v e ry much all the participants. Thank you. Moderator: On behalf of DAM Capital Advisors, that concludes this conference. Thank you all for joining us, and you m ay now disconnect your lines. Harish Kamath: Thank you. Bye.

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