Cipla Ltd Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Saion Mukherjee - Nomura Financial Advisory and Securities (India) Private Limited - Analyst : Yeah. Hi, thanks for taking my question. My first question is around the US revenue trajectory. So we understand the slowdown this quarter. But if you can give us some details with regard to Advair, lanreotide, and Revlimid, how that trended sequentially. And also, it seems like there is some delay in your key product launches in the US. How should we think about the next few quarters in terms of the US revenue trajectory? Thank you.

Question: Saion Mukherjee - Nomura Financial Advisory and Securities (India) Private Limited - Analyst : Understood, okay. And also, on the contribution from Global Access and PEPFAR, in particular, if you can share. Because there is some news on funding constraint there. Any views if you have, and how will that impact Cipla? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Saion Mukherjee - Nomura Financial Advisory and Securities (India) Private Limited - Analyst : Thank you. I'll join back. Thank you.

Question: Kunal Dhamesha - Macquarie Research - Analyst : Hi, thank you for the opportunity. So the first one, [Manu], can you provide your view on the recent comments from the US President on tariff on the pharmaceutical product? And what is your best-case scenario here, and what could be our strategy in the worst-case scenario?

Question: Kunal Dhamesha - Macquarie Research - Analyst : Thank you. And second is on the FY26 outlook, which you have provided on a broad basis that I would expect to see revenue growth in FY26. Could you provide more color on, probably, the segment-wise growth expectation, primarily US? I know you have indicated that Advair and Abraxane seems to be more H2 FY26 products. So beyond these couple of names, do we have other products which could help us grow? And second part to that question is, how is the price erosion in the US market evolving in quarter three and in January? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Kunal Dhamesha - Macquarie Research - Analyst : Sure. Thank you, and all the best.

Question: Damayanti Kerai - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Yeah, hi. Thank you for the opportunity. My first question is on albuterol. So in the last two quarters, you have gained significant market share. Now you are at 21% market share as per your presentation. So do you see further headroom to gain market share? And also, if you can comment on the pricing environment in the albuterol market.

Question: Damayanti Kerai - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : So like with this pricing, broadly stable pricing, and if you gain further market share, do you think you can gain -- like it will remain a substantial contributor for the US business that we can assume, right?

Question: Damayanti Kerai - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : My second question is on lanreotide. So you mentioned the supply issues are awaiting and then maybe towards the end of March quarter, you'll be back to normalcy. But I just want to understand, how should we assume that trajectory ahead, whether it will happen in phases or you are expecting, say, quarter down, you'll be back to the level where you have dropped?

Question: Damayanti Kerai - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : And just a clarification, this supply is for 505(b)(2), it will be for the generic formulation as well?

Question: Damayanti Kerai - HSBC Securities & Capital Markets (India) Private Ltd. - Analyst : Okay, thank you. I'll get back in the queue.

Question: Neha Manpuria - BofA Global Research - Analyst : Thanks for taking my question. Umang, just a clarification, did I hear correctly that Abraxane launch is at the back end of second-half fiscal '26?

Question: Neha Manpuria - BofA Global Research - Analyst : Okay. And the reason for delay, given that Goa has cleared, is there anything in the application, the ANDA that is required? And you also mentioned there'd be a little bit of lag post-approval to launch the product. So just trying to understand the reason for the delay in the launch.

Question: Neha Manpuria - BofA Global Research - Analyst : Okay, got it. So the only delay -- I mean, there's nothing pending from an application perspective from the USFDA on Abraxane?

Question: Neha Manpuria - BofA Global Research - Analyst : And is there a PAA required, in your view, for the approval? Could that be a roadblock?

Question: Neha Manpuria - BofA Global Research - Analyst : Okay, got it. And I think, Umang, last year, we had also mentioned a couple of 505(b)(2) assets and a few peptide assets that we expect to launch this year. Other than the lanreotide generic launch, we haven't really seen any other large launches coming through. Can you give us an update on when do we see the 505(b)(2) assets and the rest of the peptide acids coming through for us? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Neha Manpuria - BofA Global Research - Analyst : Okay, okay. Got it. And one last one, if I may. On the trade generic business, now that it's getting back to normal growth trajectory, are we seeing a slowdown in growth even in trade generic? Previously, there were numbers floating around that the trade generic market is growing 15% to 20%. Has that growth for supply, in your view, now on a steady state basis, more like high single-digit, low double-digit? How should we think about the trade generic business growth from here?

Question: Neha Manpuria - BofA Global Research - Analyst : Okay, got it. Thank you so much, Umang.

Question: Ankush Mahajan - Axis Securities Limited - Analyst : Thanks for the opportunity, and congrats on a good set of numbers. So very strong gross margins this time that has led to the expansion in EBITDA also margin. So sir, what are the reasons behind it, and how do we see gross margins trend in upcoming quarters? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Ankush Mahajan - Axis Securities Limited - Analyst : So what is the sustainable trend now?

Question: Ankush Mahajan - Axis Securities Limited - Analyst : Yeah. So are we including our EBITDA margin guidance or something?

Question: Ankush Mahajan - Axis Securities Limited - Analyst : Okay. So last one is, how is the price erosion in the base portfolio?

Question: Ankush Mahajan - Axis Securities Limited - Analyst : Thanks, sir. Thank you.

Question: Anubhav Agarwal - UBS - Analyst : Yeah, thank you. First question, lanreotide, just trying to understand. Let's say we index our production or supply to 100 before the problem started. Once you come back in, let's say, April, would you be back to 100? That's part A. Part B is, I think all the problems with the partner was driven by capacity expansion for lanreotide. So what point of time would you -- let's say, 100 will become 120 or 150 for you guys?

Question: Anubhav Agarwal - UBS - Analyst : So let's say in second half next year or let's say in FY27, could you be like 50% higher than this 100, closer to 150, just as an idea?

Question: Anubhav Agarwal - UBS - Analyst : Okay, that's very helpful. Second, on the respiratory portfolio today, in the US, ballpark we are about $150 million, $200 million out of -- I'm talking annual number. Let's say once we launch Advair, Symbicort, your partnered innovation asset, QR also, right, FY28 for example, what kind of ramp-up could we see? This $200 million can become $400 million, let's say, double from here? Can we just roughly talk about the scale-up?

Question: Anubhav Agarwal - UBS - Analyst : Sure. I was just trying my luck that -- can this portfolio double? Is that a possibility there? Because all assets are large, is there potential to double the respiratory contribution?

Question: Anubhav Agarwal - UBS - Analyst : That's helpful. Just one clarity on the India business on the consumer wellness side. Last year, quarter-wise, we were doing about INR250 crore. Now the run rate has increased to INR380 crore. Just trying to understand that. So we made one acquisition in quarter four. So is there more shift which has happened from trade generics to consumer wellness that is like INR70, INR80 crore per quarter which has shifted there? Or what is leading to such a high growth in consumer wellness in India?

Question: Anubhav Agarwal - UBS - Analyst : Yeah, indeed. It's already become INR1,600 core, INR1,500 core. Thank you.

Question: Bino Pathiparampil - Elara Securities Pvt Ltd - Analyst : Hi, good afternoon. Umang, could you explain how the Abraxane market is now -- because already there are three, four players, and you will be another year or more to launch. What's your thought of price erosion, market share gained by [Genix], et cetera, as of now in the market?

Question: Bino Pathiparampil - Elara Securities Pvt Ltd - Analyst : Got it. But when you enter, what do you think the price erosion could be, or the pricing could be compared to the original innovator levels before generic entry? If you can give a rough -- could it be just 30% lower or more like 50%, 60% lower, or it could be 80% lower?

Question: Bino Pathiparampil - Elara Securities Pvt Ltd - Analyst : Got it. And South Africa market has been exceptionally strong growth this year, all three quarters. So if you have something really happening,

Question: Bino Pathiparampil - Elara Securities Pvt Ltd - Analyst : Understood. One last bookkeeping question, what would be the consolidated tax rate for full year? This quarter was especially low. So --

Question: Bino Pathiparampil - Elara Securities Pvt Ltd - Analyst : Okay. Thank you very much.

Question: Chirag Dagli - DSP Mutual Fund - Analyst : Yeah, hi. Thank you for the opportunity. Am I audible?

Question: Chirag Dagli - DSP Mutual Fund - Analyst : Yeah. So two questions. First is on the USFDA issues. We've kept on seeing these crop up every once in a while. And this is quite unlike what Cipla historically has been. So, Umang, what is it that you're trying to do to make sure that these issues -- we fix these longer term? We've recently got approval for one of the larger facilities, but the other one still continues to remain under issue. So how are you thinking about the reasons why we've frequently gotten into these issues? And what are we doing longer term to make sure that these don't repeat? And the second one I had was on capital allocation. We have INR9,000 crore-odd almost of cash. How are you thinking about capital allocation going forward?

Question: Chirag Dagli - DSP Mutual Fund - Analyst : No, thank you.

Question: Chirag Dagli - DSP Mutual Fund - Analyst : Okay, sir. Thank you so much.

Question: Abdulkader Puranwala - ICICI Securities Limited - Analyst : Thank you for the opportunity. Sir, just firstly on generic Revlimid, I heard your comment previously about the latest revenues for the quarter on a sequential basis. But if we have to look at the nine monthly number, then if you could throw some light as to where are we on the overall target for shipment of this particular product. Would we kind of see some sales moving up in Q4 as well from this product, or a large part of it is already booked in the nine months?

Question: Abdulkader Puranwala - ICICI Securities Limited - Analyst : Got it. And so in the past, we have spoken about filing a couple of oligonucleotides in terms of your near-term launches, when we are calling about three, four products. So by when should we see launches of these products happening into the US market?

Question: Abdulkader Puranwala - ICICI Securities Limited - Analyst : Got it. I'll get back in the queue. Thank you.

Question: Umesh Laddha - Nirmal Bang - Analyst : Hello, am I audible?

Question: Umesh Laddha - Nirmal Bang - Analyst : Yeah, thank you for giving me the opportunity. So actually, I wanted to know that how much of our One Africa and emerging market sales are constituting of antiretroviral agents, API and FDF combined? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Umesh Laddha - Nirmal Bang - Analyst : API and FDF, fixed-dose formulations, combined, how much are we exporting ARVs to emerging markets and South Africa?

Question: Umesh Laddha - Nirmal Bang - Analyst : Okay, sir. And sir, what are the margins which we are getting from this portfolio? Like, if you could just give some color.

Question: Umesh Laddha - Nirmal Bang - Analyst : Okay, sir. Got it. And, sir, lastly, on the India business, are we planning to launch semaglutide. And there is a 10% revenue growth in the India business. So can you just give a split, like, how much of this has come from price and volume? Is that possible?

Question: Umesh Laddha - Nirmal Bang - Analyst : Got it sir. Thank you so much.

Question: Surya Patra - PhillipCapital (India) Pvt. Ltd. - Analyst : Yeah, thanks for the opportunity. So my first question is about the Horizon 2 initiatives that we have taken. And based on which, we have been anticipating CDMO opportunity, leveraging our peptide as well as injectable capability. So could you give some update on that, if any? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Surya Patra - PhillipCapital (India) Pvt. Ltd. - Analyst : Okay. Sure. So this clarification is useful, sir. Second question is on the injectable side. So how big is the injectable portfolio right now, or in terms of, let's say, business mix in the US currently? And could you give some sense about the pipeline in the complex injectable side that we are talking about?

Question: Surya Patra - PhillipCapital (India) Pvt. Ltd. - Analyst : Okay. Yeah. Thank you, sir. Thank you. Thanks a lot.

Question: Shashank Krishnakumar - Emkay Global Financial Services Ltd - Analyst : Hi, thanks for taking my question. I think we touched upon Advair. I just wanted to check on our Symbicort and QR filings as well. If you have also made progress with the site transfer for these two assets.

Question: Shashank Krishnakumar - Emkay Global Financial Services Ltd - Analyst : Got it. Thank you. The second question was on the trade generic business. Is it possible to sort of call out what are the growth rates in the trade generic business this quarter? Any ballpark number would be helpful, either on a YoY or a QoQ basis.

Question: Shashank Krishnakumar - Emkay Global Financial Services Ltd - Analyst : Got it. Thank you. Yeah, that's it for me.

Question: Harsh Bhatia - Bandhan Mutual Fund - Analyst : Yeah, thank you. Am I audible?

Question: Harsh Bhatia - Bandhan Mutual Fund - Analyst : Yeah, thank you. Sorry to harp on this, Umang, and please correct me if I'm wrong. Abraxane, you mentioned, even if the plant gets cleared tomorrow, it is six months to launch. Again, is there a margin of safety that we are working with, which is why we are building in a six- to seven-month period over here? Or is it because the complexity of the product is such that six months is the primary condition? In addition to that, are we already building in an API to this timeline? Could you help us understand what are those two, three assumptions over here for the six months' time gap?

Question: Harsh Bhatia - Bandhan Mutual Fund - Analyst : Sure. And on Advair, just one clarification for the InvaGen facility. I think the filing is done from the InvaGen facility in terms of the site change or the site transfer. Again, over here, also our launch timelines are building in an FDA inspection, or they are not building in an FDA inspection?

Question: Harsh Bhatia - Bandhan Mutual Fund - Analyst : Sure. And just one lastly on Revlimid for FY26 since Jan '26 would be the period when the patent comes off. So FY26 sales pattern is going to be similar to FY25 sales pattern, again, very qualitatively without getting into the numbers. Or would it be very different as compared to FY25, again, in terms of the sales pattern that we're looking at?

Question: Harsh Bhatia - Bandhan Mutual Fund - Analyst : Sure, thank you.

Question: Nitin Agarwal - DAM Capital Advisors - Analyst : Hi, thanks for taking the question. Among your falling out from the Symbicort partners you mentioned, what would be the rough timelines in your expectations for Symbicort approval in the US?

Question: Nitin Agarwal - DAM Capital Advisors - Analyst : So more like a second-half '27 launch?

Question: Nitin Agarwal - DAM Capital Advisors - Analyst : Secondly, on the India business, we have done reasonably well over the last few years from a revenue growth perspective. If you can give us some color on, qualitatively, how has the profitability of the business changed over the years? Has it become -- has the profitability improved a fair bit? And where you see -- what kind of opportunities do you see in this business? I mean, one assumption is that, typically, these are branded businesses. And as scale comes, profitability keeps increasing a little bit disproportionately. Is that the right way to think about it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call

Question: Nitin Agarwal - DAM Capital Advisors - Analyst : Is it sort of fair to assume that India profitability would be higher than our overall profitability numbers? Should we be in line with that? How should we think about it broadly?

Question: Nitin Agarwal - DAM Capital Advisors - Analyst : Thanks, and last one on -- in the past, we've talked about licensing in possibly Manjari if Lilly decides to launch it in India. There are talks that Lilly would be looking to launch sometime this year, actually taking that launch. Any color on by when -- if we still are there in the reckoning to become a partner for that? How important will that be for us as a business?

Question: Nitin Agarwal - DAM Capital Advisors - Analyst : If I can ask you the last one, in a television interview, there was a flash that you talked about margins for Q3 not sustainable. So this is more in the context of Q4 being a seasonally soft quarter, or there are certain elements in the Q3 quarter which are not sustainable in the first place? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 28, 2025 / 10:30AM, CIPL.NS - Q3 2025 Cipla Ltd Earnings Call