NATCO Pharma (NSE:NATCOPHARM) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Natco Pharma Limited's earnings conference call for the second quarter FY twenty seven. We have with us on the call, mister Rajiv Nanapeni, vice chairman and CEO, mister Amit Parekh, chief financial officer, mister Rajesh Chebian, executive vice president, crop health sciences, and mister Rajiv Manan, lead investor relations.

0:27 Please note that all participants' lines will be in listen only mode, and there will be an opportunity for you to ask questions after management's opening remarks. Should you need any assistance during the conference call, please raise your hand from the participant tab on the screen. While asking questions, please identify yourself and your company. Please note that this conference is being recorded. I now hand over the call to mister Rajiv Menon. Thank you, and over to you, sir. Thank you, Andit. Good evening, and welcome everyone to Natco's conference call discussing our earnings result for the second quarter of FY twenty seven. I'm Rajiv Menon, lead investor relations at Natco. We hope you have received the earnings presentation and press release that was sent out earlier.

1:16 Let me draw your attention to the fact

1:19 that on this call, we may be making certain forward looking statements, which are not necessarily historical facts. And anything said on this call, which reflects our outlook for the future, might be reviewed in conjunction with the risk that the company faces. We undertake no obligations to update these forward looking statements. I would like to state that the material of the call, except for participant questions, is a property of NATCO and cannot be recorded or rebroadcasted without NATCO's expressed written permission. We'll begin with the financial highlights and then follow with an interactive q and a session. With that, I I request our CFO, Amit Farik, to discuss the financial highlights. Over to you, sir. Thank you, Vinay.

2:07 Greetings to everyone, and thank you once again for joining us in today's earning call. The company recorded consolidated total revenues of 1,019.4 crores in quarter two FY twenty seven compared to rupees $7.94 crores in quarter one of FY twenty seven and $14.63 crores in the corresponding quarter of the previous year. The quarter on quarter increase was primarily driven by the strong performance of our international formulation business. The Y o Y decline was likely attributable to lower lenalidomide revenue during the quarter, which was partially offset by the growth in the base business, which also includes our subsidiaries. EBITDA, including other income, for the quarter stood at 310 crores with EBITDA margin of 30.4%.

2:59 Consolidated profit after tax stood at rupees 202.6 crores compared to rupees 206.5 crores in quarter one FY twenty seven.

3:11 With regards to our associate company, ADCOPHARM Holding Limited, South Africa, The revenue for the quarter stood at 1,344 crores and profit after tax at 80.5 crores. In July 2026, we acquired additional 13.25% stake in ADCOPH Ingram Holding Limited, taking our total holdings to 49%.

3:36 This further strengthens our strategic position in South African market and enhances our participation in the performance of ADCOPHARM. Share of profit based on 49% holding as on 09/30/2026 was 29.2 crores after adjustment relating to purchase price allocation. Our domestic formulation business revenue stood at rupees $1.45 crore. We also saw strong growth in our Brazil business. Revenue from Brazil stood at $1.21 crore, representing the growth of 66%. Thank you all. With this, we'll take question and answer. Over to you,.

4:23 Thank you, sir. We will now open the call for q and a session. We will wait for a few minutes until the queue assembles. We request participants to restrict to two questions and then return to the queue for a... For more questions. Requesting to please introduce yourself and your company before asking the question.

4:43 Please raise your hand from the participant tab on the screen to ask a question. We will wait for couple of minutes to...

5:29 For part... Participant to raise their hand and ask the question. The first question is from Sheikhar Jain.

5:47 Hello. Can you hear me?

5:50 Yes, Sheikhar. You're alright, please. Yeah. I am an individual investor. So I had two questions. In March, when we announced that we have first to file status for pomalidomide. I was hoping for a bit of a bump. So, what happened with the pomalidomide first to file status and the second question is what do we plan to do with the rights issue proceeds? Any color on that will be very helpful. Thank you. Thank you, Shwikar. First question was on pomelanomide. We did get the first to file, Shwikar. I think we did, but it's a shared first to file. I don't remember the exact number of generic competitors. I think about five to six generic competitors came in the first way.

6:39 And because we're five and six competitors, the price erosion is... Was quite steep. So even though we had one eighty days, it didn't... The earning bump was not to... In a... You know, which was, you

6:52 know, substantial that could move the earnings. It is the way that sets the nature of our business. The second question on the rights, so I think we have multiple end use requirements. I think primarily it's it's to reduce the debt that we have for our deal raised for ad hoc. And also, we're also keeping some money for the possible acquisition. We're looking at various acquisitions. So that's the the end use expectation. Okay. Thank you. Thank you, sir. Next caller, please. The next question is from Bhubanesh Bhubi. Sir, am I audible? Yeah.

7:42 Please go ahead. My name is Bhunesh. I'm a... I'm an individual investor. So I think as of now, Revlimid sales is exhausted. So what's the next big shot drug is in our pipeline?

7:59 Next big... I think we have few launches that are coming up in the next few quarters. For one is definitely launch is that it is coming up in the next few quarters and and of which ones can be our first to find sixty mg shared vertical first to find. And then we have traffic today in coming up, which is smaller product, but we are the one among the two first to find. And then we have... These are two major ones in The US. And then we have... We're expecting launch of Olaparibol in the next few quarters in Brazil and Canada. So these are the major launches coming up. Nefkani, if you could, subject to launch and.

8:48 Yeah. And, sir, what's the plan about spinning off our agree, you know, agreed agri fertilizer business going forward?

9:00 Yeah. Hi, Gunish. This is Rajesh. So I'll answer that. See, as you are aware, we did a rights issue, which basically what it does also the the cap structure is now changed a bit. Because of that, we have to resubmit the file to SEBI. So it pushes out by four to six months from the original plan. So we're looking at, you know, maybe by mid year, calendar year next year is when we hope to get the demerger done. Okay? Yeah. Thank you, sir. Thank you. Thank

9:37 you. Next caller, please. Yeah. Thank you. The next question is from Ramakrishnan. Please do it, sir Hello? You're on mute. Yeah. Yeah. What what are the plans regarding the QIP? We have done the rights issue, mister Ankusha. So right... We're not done QIP. So we already completed our rights issue. Yeah. And, essentially, we use the funds to reduce some debt that we have, and we kept some money for some working capital payments and for an... A possible acquisition that we are looking at. But the QIP makes the... I mean, equity diluted. You know?

10:29 It's already done, mister Amish. It's already done. Rights is already done. So I think this this was done last month, so it was already completed. There's a dilution. Yes. There was a dilution, but we gave opportunity for all the shareholders to participate. But that's was dilution of a... Yeah. Sorry. So sorry. Does VIP bring more dilution?

10:49 It is already done. The the dilution is done. We've done a 10 dilution overall. It's already done. My next question is as come... I mean, this is related to the stock performance. What is happening is PE is still quite low as compared to the equal or maybe less

11:10 market capitalization companies in this segment. What steps you are taking? I mean, some general observation is communication, broad market communication is still not up to the mark. Are you making any steps like appointing a separate person exclusively for corporate communication so that positive things will be communicated to the market, so the market takes in the right spirit. But what is happening is,

11:39 I have been observing last, I mean, if you look at five, six years, returns are practically nil or negative. So the important factor for any company to grow is to take care of the investors' interests also. That is the only way. When you want to increase the capital, when you want to go for further expansion or acquisition, the only possibility is,

12:02 I mean, proper value to the shares, then the dilution will be low. So what steps you are taking? I think you need to apply mine more seriously on this subject as you have been doing on the products. Mister, I like to defer with you on this. I think if you look at our model, it is... It's a high risk, high return model.

12:25 So if you look at our earnings in the last five years, we... I think we had probably the best earnings in the industry. If you look at the top 10 earnings in the company and among the pharma listed space. And... But there is a lumpiness in our earnings, and I think which has been always communicated to our shareholders. No. You you are... So sorry to Listen, Ankishya, you you asked a question. I... Let me answer your last question. No. You you... I gave you our opportunity. Let me do this. Yeah. So so there's a certain amount of lumpiness that is there. And I think

12:56 what we try to do with our investors and when we engage, we have a dedicated IR team that we engage and we mention what upsides we're looking at and what are we chasing. And we have done that in a in a regular fashion. And if you look at whatever is there in first files or our investments in eGensis, for example, which has done the first kidney transplant in human being from a pig. So these are all very, you know, exciting high risk areas. And there's an amount of lumpiness. And regarding p ratios, right, by... This is what my personal opinion because last period is. I think the market appreciates more steady earnings, which are low risk. And they give a higher multiple for that. And I think our market is unwilling to, you know, appreciate high risk, high return sort of ideas. And I think our job is only to communicate what we're doing. And so we... I don't look at stock price. We look at the logic of it as a company. We look at our earnings in the last four or five years. I think the part of our earnings has been substantially larger than a company which has a higher fee. I think just look at the math.

14:04 I think we have done well. And this is the nature of our business. I think our job is to really tell you what we do, and I think I I don't control stock prices. So I think our our strategy is this way, and this is how we run off. See, but, ultimately, the return on investment is also equally See, return is also important. Governance is important. Strategy is important. I think all these communications are done in a fair manner. And in the end, I think you just have to... This risk appetite is based on the investor's perception. So I think that I can't. Okay? That's the best I can. Thank you. Next caller. Thank you. The next question is from Rashmi Shetty. Hello?

14:51 Am I audible? Yeah. Yes, sir. Please go ahead. Congratulations on good set of numbers, sir. Sir, just wanted to reconfirm that whatever guidance you gave in last quarter that FY 'twenty seven revenue should be in the range of INR34 billion to INR35 billion and Patch should be nearly INR700 crores to INR750 crores.

15:12 Do you still hold that? And you feel because in the first half, we have done around the 400 crores of that. I think we can do better, Rashmi. I think where things are going right now, I think we'll probably be a little less than 800 crores of that. I think we'd like to bump it up a little bit. I think it'll be between $7.75 to 800 is what I see. Q three also looks good. I think q four is a little weak, but at least from what I can see. But for the year, I think we should do, I think, a little less than 800. So I I think we'll probably do better than what you start to hear.

15:44 And this will be largely driven by which of these segments? If you can talk on, you know, domestic business, even Brazil earlier you mentioned that you will be able to achieve sales of 55 to $60,000,000 this year. But I think in this quarter itself, we have done. So how much, if you can give some breakup, you know, in first half, what we have done in the subsidiary that is Brazil, Canada, rest of the world, US? And then how should we look at it for the full year?

16:13 So I think, see, in terms of Brazil and all, for the half year, I think we've done nearly 300 crores of revenue in Brazil. We don't do a geographical split for Brazil. Think we're doing with the. In terms of, like, the earnings itself has not come concentrated manner like the way it used to come in in previous financial years, I think it is fairly diversified. I think a good portion has come from South Africa, a good portion has come from Brazil, good portions come from a base US business. And this has come even without lenalidomide being

16:44 in the numbers. So I think it's... That way it's a more well diversified earnings. I think in the past, the challenge has been that the earnings have been so considered by lenalidomide. Anything else that used to do well also would pale in comparison to lenalidomide. I think that change you could see in other things. I think it's relatively more diverse.

17:04 So, sir, in your base US business, you have seen better traction in the volumes as well as pricing, or you're seeing a better pricing and that is, you know, driving the entire growth? US is a tough bet, Raj. I think US is the most important market in our genetics business, and you have... You cannot ignore it. But at the same time, we also need to see that sometimes you will be in a product and you can make a lot of money. And sometimes when there are more competitors, there is, you know, obviously no margin. But you are to run the basket game, and you just have to be patient. There's always opportunities that come. But US still, in my personal view,

17:49 is always a good business if you have limited competition. It's it's not a great business when you have a lot of competitors. And that's been the case, and you just have to be patient to that business. But, overall, I think relatively, rest of the world is a more stable business compared to US, but you can't ignore US. I think that's that's all.

18:08 Understood. And just last question on the operating margin front. This is the kind of margin which is sustainable, right, whatever we have done in first quarter and in second quarter? I think so, Rashmi. I think where things are going, I think, yeah, this is a sustainable basis. Absolutely. Okay. Okay. Thank you, sir. That's it from my side. That's it. Thank you so much. Yeah. Next call, please. Thank you. The next question is from Rahul Chaudhary. Hi. Good evening, sir. Hey, Ray. I was looking at the cash flow, but there's a dip from associate 78. Has that come from ATCOPHARM? Sorry. What's your question? Can you repeat? He said profit from associates. I think first quarter, it's 80 crores it came from the Yeah.

18:57 You are right. It's come from ATCOPHARM. Yes. Can go on with the next question, Rahul, or you go to the next call. Okay. We'll go to the next call. Thank you. Thank you. The next question is from Abdul Kedar. Yeah. Hi. Thank you for the opportunity. So my first question is with regards to your quarterly run rate in India. I know that has been growing quite well. So wanted to understand, you know, whether it is entirely driven by semaglutide. And in terms of this Onco price cut, you know, how do we see that getting impacted our India growth ahead?

19:48 The Onco price cut itself is not impacting our sales too much because a lot of the distributor margin has been shrunk. So it's not affecting the company. So I don't see much impact. There could be a small margin impact, but it'll take... It'll be more than made up by the volume. And the first question you had was what I I just forgot. What was it? On the run rate front, is it mainly driven by some of the On the run rate, I mean, we had some stocking quantity of semaglutide to our partners. That's the reason why it's a little bit higher. Domestic is like, I would say about a 130 to a 135 would probably be the the base domestic is what probably we're running at.

20:34 Particular was 145, but I think there's a little bit of stocking of some agglutide, which it's not gonna be repeatable. So I think one thirty one thirty five is the base domestic now. I think that's the sense based on the present portfolio. Okay. Yep. And and there's a second question I had with regards to your r and d spend. So this quarter, if I see your other expenses has gone up, so safe to assume it would be mainly because of r and d? And if you could quantify that amount for this quarter versus what you're doing last year for f I twenty six, it would be helpful. So, Abdul, largely, the reasons are primarily r and d spend itself.

21:21 But there are a couple of other spends as well, like, you know, annual FDA facility fees and program fees are also there, And there are some legal expenses, etcetera. But large a large portion of the increase is r and d. That's how I put it. Okay. Okay. Know, r and d is very unpredictable. You know, quarter on quarter, it depends on the milestone what we achieved in the program and etcetera. So compared to last quarter, this quarter, the R and spend has been substantially higher. Yeah. So what I was trying to understand basically is that from a full year perspective, are we seeing that trend increasing in terms of what we, you know, in terms of the run rate, what we were at last last year and, you know, in terms of, say, some additional products entering into the pipeline or into development that is fueling this increase?

22:13 So I think the run rate... So overall, r and d spend, the way we look at it and most of the pharma looks at it as a percentage of this sales. Last year, obviously, our r and d spend was more than 400 crore. This year, overall, it would be eight to 10% of our top line. So we may end up around 300 to $3.50 crore depending on how the program runs. So, yes, there will be... Like, quarter one was a little lower spend. Quarter two is high. Even I think I'm expecting quarter three to be a little higher in r and d, but other spend will be moderate. So... And quarter four would be okay. So this is how I look at it. So that's... I hope I've answered your question. Yes, sir. That helps. And, sir, I had a couple of more, if I may.

22:58 Just one on, you know, your profit share from from ADCOPHARM. So if we look at the annualized run rate versus this particular quarter, you know, the run rate looks a little lower. So I went through the press release. It talks about certain provisions. So if you could, you know, quantify and help us understand what can be the steady state run rate. Right. Sure. So there are two reasons for lower number in the quarter. One is quarter one profits from Natco was very high, and that is a seasonal effect. There was a flu season in South Africa because of which... Quarter one is the highest quarter for the South Africa companies, and that's the reason the major portion came in from there. This quarter, obviously, we had the additional acquisition of thirteen point seven five purse... 13.25%, and we had to purchase price allocation.

23:50 There's a one off amortization because of that allocation, which is around 6.5 crores. And plus, there was also a bit of a VRS in one of the facilities. So that also there's a one time charge. The way you wanna think of it is it's probably a 12,000,000 per pack panel setup. I think 12 to 14,000,000 depending on the seasonality of the quarters. Yeah. But I think 12,000,000 seems about right. Think that's You get 49% of And you get a 50... 49 of it and a little bit of amortization. So before four, five course amortization. Yeah. So you should... If it does about 12,000,000, I will pay 6,000,000 pickup out that 6,000,000, maybe 4 or 5 crore amortization. So 55 to 60 crore sort of consolidation should, you know, you know.

24:37 Understood. No. No. Very helpful. Sir, last one, if I may. This is with regards to your investment in eGenesis. So I believe, you know, there is some additional investment being done. So now what is our stake currently? And in terms of if we look at the trial data, you know, after the phase three trial, you know, what... How do we plan to commercialize this opportunity, whether it would be kind of a out licensing deal which can happen or you might look for a partner to to kind of, you know, take that ahead? Regarding stake percentage, I'm not supposed to disclose. It's a substantial single digit stake, so that's all I can say. And in terms of... You know, we have put about 20... Little less than $25,000,000 into the entity.

25:30 And in terms of how do we expect to monetize, I think there are multiple ways. One is we're asking for a license for the India market. So that discussions are ongoing. So if we get a license, that would be one way of, you know, monetizing the asset. Second, obviously, is, you know, the company were to go IPO. So that was another way of monetizing the asset. I think a lot of it will revolve around how the asset does in the clinical trial. I think we have one patient who's approaching almost one year now with our dialysis. And if that readout looks good, and then we have more patients coming in, then I think we are sitting on a, you know, jackpot. So we'll... Let's see how things work.

26:15 These things are, again, very high risk, high return. So we just have to be patient how things go. But I think next twelve months, I think we'll have clarity on the data. But so far, so good. I think that's alright. And next call. Got it, sir. Thank you. Take care. Thank you. The next question is from. Hello? Am I all good? Yeah, please. Yes. Yeah. So my question is around what is the volume share that we are... Natco is looking for, the semi group line market? In the India market, you're saying, would you? Sorry? In the India market, how much share we have in yours? Yeah. Yeah. India semi to 10 market. I think Penn has not done so great. The vial has done better. I think even in terms of volume, I'm just making an estimate. I mean, my... It's an educated guess. Right?

27:10 I would say we have probably about five to 6% share in terms of volume. In value, maybe we only have, like, 3% share. So I think that's my estimation, but I think, again, I'm going by, you know, approximate Yeah. And can you give up a percentage split between the vials and the pens? I'm sorry. Say that again. Can you give up a percentage split between the vials and the pens? Percentage split, I can't recollect. I think the brand does, like, 1.5 to 2 crores a month depending on the month. I would say Okay. $40.50 lakhs comes from the the pen, and I think about one and a... 1.2 to 1.5 comes from the device. So while it's obviously much cheaper, so I think, obviously, the more volume we get from there. So I think that's all. And given the number of generic entrants that we've had, what is the percentage of patient once that we've seen a change in... Utilization per patient?

28:09 It's been pretty crappy, actually. I think it's not been great, honestly. I... It's a... Is it... I think everybody's trying to get market share, so this... The pricing has been really bad. I think everybody's hoping that you just stick in there and then hope get, like, you know, that five, 6% share and just hope that the wave gets better over a period of time the next two, three years. And then as a market size or someone new that increases, you keep keep... You keep your market share, and then, you know, as the size increases, you benefit from it. I think that is the hypothesis all of us are working on. I think I'm no different. So I think we made a dent. I think we're there, but it's not... Is it profitable? No. And do I see any profits coming in the near future? No. In the long run, maybe I think it should do well as the size of semi increases.

29:00 Yeah. Okay. Got it. Thanks. Bye. Thank you. We will wait for a few minutes until the queue assembles. Raise your hand from the participant tab on the screen to ask the question. Next question is from Gagan Khareja. Good evening. So the first question is, on your working capital and tax rate. Yeah. I think if it would help, if you could give the working capital in their sales and enumerate the inventory letters and, you know, the payables, and what could be these sustainable tax rate going ahead?

29:54 Let's take that question. He's asked to... First question was on the tax rate, and second is, what what did you... Doesn't... Your voice was very soft, so we couldn't pick up what you said. So I just do it. And then can you re... Can I ask Yeah? You want data, as you said? Yeah. I want the working capital. I believe working capital has increased year on year in in days sales. So can you give the the number in in days sales for working capital? Oh, I do. Right? Right. I'll I'll take that. So I think our tax rate for the quarter is around 27% in India. And overall, I think it's around... On console level, it's around 29%. So we expect... And this variation comes because of the subsidiary profitability mix.

30:45 We expected overall level on a full year basis, our stand alone tax rate would be around 27 to 27.2. And at console level, it may be ranging between 29 to 20%. Coming to the working capital, yes, I think, you know, it's a mix of... If we just look at from our India business perspective, I think the DSO would be between ninety to one twenty days. And that is a range we expect to continue. Next caller, please. I Hello? Yeah. Yeah. Please go ahead. Please ask. Yeah. Yeah. So I have one more question, and I I think you gave some commentary on Canada, but can you also...

31:32 Sorry. Gave some commentary on Brazil. Can you also give some flavor of how Canada and the other ROW markets have done for you in the in the first half of this year? And how do you expect, you know, the other geographies in ROW to pan out for the balance of the year? I think ROW business, especially the MENA region, has done well. And Canada has been stable. It's not increased, but we have some big launches coming up in 2027. So we expect '27 will be of lower tier in Canada. And Brazil also continues to do that, and I think that we had almost 80% growth in Brazil based business this year. And we expect that it will continue to do well next year. So I think Brazil, Middle East, and Canada will drive out the rest of the world. And, of course, The US --. Are also there, so that will also help us.

32:25 Thank you. Next caller, please. Next caller, please. Yes. That you can... I have one more if I can go ahead or Okay. Fine. Yeah. No. I just give... Yeah. You can come back again if you don't mind. Yeah. Okay. Thanks. Okay. Alright. Thank you. Thank you. The next question is from. Thank you for the opportunity again. You gave some commentary on the semaglutide market in India which was very helpful. Can you comment on the semaglutide market in the rest of the world and if we are looking to expand to rest of the world?

33:16 That's one question. And the second question is about our upcoming launch on Carfilzimumab. I'm a bit confused because different companies seem to have different... Seem to have sole exclusivity status for different strengths. Why does that happen? I'll I'll explain. I'll explain. Let's start with cartulosement. So so there are three strengths in cartulosement. So majority sale is the sixty mg. So the sixty mg, there's thirty mg, and there's ten mg. Mhmm. So sixty mg has... I think I don't remember exactly about six filers, I think, or multiple filers. I can't remember the exact number of filers, but there's multiple filers. So even though we have one eighty days, it has multiple filers. The value of it will not be that exciting.

34:11 On the lowest strengths, one strength, we have sole f tier. So that's the one that we intend will do it. Other strength, don't have expertise, so launch will be later after the first wave of launch. So that's how it is. Yeah. So my confusion is why doesn't the company apply for FTF in all the strengths when it does the application? No idea. There was a quote there. What happened was 16 g was the first product that was launched. So everybody applied on NC minus one date when that product was filed. But 30 and and then got approved much later. So then because it got up... Approved much later, it was... Anybody could have filed. There's no date limiting. No. Whoever files first will get it. So then it was a race to the single winner.

35:01 NC minus one, what happens is if everybody files on day one and everybody gets That's good by thirty 10 was later. Because it was later, that's the reason why there's no multiple FTS on 3010. Okay. Thanks. And any comments on the global semaglutide market? Is it as Yeah. Not... Like the way our contract is written. We are not focusing on our. Our is primarily on US and the regulated market. The US filing, are answering the queries, so we can't give any insight about our approval. But I think, at this time, you know,

35:38 we are continuing to pursue our regulatory queries. So I have no insight to give at this at this time. Thank you. That's helpful. Thank you. Next caller, please. Thank you. The next question is from.

35:56 Yeah. Hi. Good afternoon, Rajiv. Adeev, you said your domestic base business is around 01:35 a quarter. Right? Till last year, I I understand it was around $100,110 a quarter. So is this a sustainable number, and what has driven this?

36:13 Could not have done well. I think Mali's samanglutide has helped Getting, you know, $6.07 crores of semaglutide, and the rest of plan has done well. So that is also helping us. And, overall, our base business has done much better. So I think we've seen a good 20% bump bump in our domestics. And even if we remove the one offs of, you know, some of your type stocking quality, I think as as a whole, our domestic business has improved dramatically. So, yes, you are... You're seeing the value. You're seeing now. That's good to hear. And what do you think of sustainable growth rate going forward? I think the main internal target is based on what we have planned. We we feel we can compound another 15, 20% next year also. Oh, wow. That's that's good. That's good to hear.

37:00 Secondly, I think... Apologies if you've answered this. See, your... There was almost a 200 increase in, you know, international business. Is there an element of tender or one off or anything in this? Yeah. Yeah. Yeah. Window. Yeah. The base is around 800, Kunal. Then the one time... That was a onetime

37:20 sale. Yes. No. Sorry. Unit 660. Right? $6.68 in the quarter. Right? No. I'm saying console numbers. Console numbers are about thousand. Okay. So what I'm saying is that base is around $88.50, and then we always get these one times. That... That's why it's up to those. Base is around $85,900. I think that's what it is. Got it. Got it. And just one more time, Susan. So obviously, you shared the Cross Health fans revenue contribution, but in terms of EBITDA, the loss quantum, if you can. And secondly, are we on track for the demerger by the end of this question? Kunal, can you say that again? I did tackle everything you said. I didn't repeat the names. Apologies. Yeah. So I I I was asking you about the agrican business.

38:05 What will be the EBITDA contribution? We're done for the half year. Okay. Paajesh, you can answer that question. Yeah. So in fact, so this quarter, just have a slight marginal profitability. Okay? So so that's the word to me, but they tell you from a segmental perspective, we're 10 lakh profit on that. So that's what we have. So compared to Q1, this is a positive quarter for us. But having said that, again, are multiple things.

38:40 We are also battling a few other credit related provisions that we have taken. So from a business perspective, I would say last year to this year, about 15 to 17% growth. But our aspirations were even much higher. And as you know, there's early effects related to that was quite horrendous. So all in all, I'd say the quarter is positive. And looking ahead for the year itself, we are quite positive compared to the last year in terms of maybe around 15, 20% growth. Got it. And then spin off, is it on track for this year end?

39:19 Yeah. I think we mentioned this earlier on because we had the rights issue and then some recapitalizations happened. So we are going back to SEBI for the filing, and then there's an NCRT process. So we are estimating mid year calendar year '27 for the demerger. Got it. Got it. Thanks. Thank you. All the best. Yep. Thanks. Thank you. Anyone who wishes to ask the question, please raise your hand from the participant tab on the screen. The next question is from Shabar Gupta. Hi, Subhash. Requesting you to unmute yourself. We'll go to the next caller. The next question is from Rahul Chaudhry.

40:15 Hi. Am I audible? Yeah. Please speak up a little bit, Rahul. Yeah. I just wanted to know something about our Parafore pipeline. I'm sorry. I might have missed it earlier. With regarding to Ozempic, and we have settled with the innovator, but have we got everything else from the regulator so that whenever we are

40:42 Rahul, I think... Yeah. We don't have an approval yet, Rahul. So we're answering some queries from the FDA. So subject to us answering the queries and getting the clarity from the FDA, then we can speak about our exclusivity. But at this time, we don't have approval. And what about in IMBRUVICA? They're also... It continues to be listed in our in our presentation, but there also there is a... We've hit a hurdle, isn't it? No. No. No. It's done now. Settled. Okay. Okay. It is settled, and we got it approved in thirty months. So we... Exclusivity is we believe the exclusivity is there, so no problem there. That is sorted. That's covered. So I just also was looking at the cash flow statement of h two. So there

41:43 Right, sir. And so just a broad based question. I mean, you had always told us that 2627 is going to be a very low key year. And the market is still, I think, valuing us as 19 to 20 price to earning. But anyway, leaving that aside, so what's the outlook for 2728? Do we have any big launches coming up which you may not be able to see?

42:07 Think we mentioned that. No, Robin. I think we mentioned about... I think the coming few quarters, expect a lot of the products, Carthel, Travectedin, and Vola Palette. So these are the major launches. So based on how they do, think that will drive the revenues. So my last query was Yeah. Sure. Yeah. With regard to this South Africa company, now that we have acquired, are we moving ahead with launching anything in the African market to We are working on it. So we have actually filed multiple products. It's been about one year since we bought this company. We made multiple filings. Regulatory approval takes about two years, two two, three years. So I think we will see the value of of our portfolio

42:57 coming in in the next one and a half, two years. But now that regulatory approval process is on, so we believe, I think we'll see the value in the next two weeks. So any new paraphore thing that we have filed or we're waiting, how does that happen, sir? Because r and d is happening... Happening continuously. So I think now we are targeting some paraphors, so an FTS. So we are targeting something. So hopefully, in the next few quarters, we get the position, and we'll we'll clear it. But as of now, I have nothing to do. Okay. Thank you, sir. That's all. Thank you.

43:32 The next question is from. Yeah, hi, thanks for the opportunity. So, just wanted a couple of specific clarifications. First is, we have announced a dividend. So, I just wanted to understand the rationale behind the dividend given that we'll just raise funds. And second, that our debt is coming up in 100 crore tranches every quarter, I think. So, do we plan to prepay it upfront or are we planning to prepay it every quarter as and when it comes due? And the third question is on the acquisition. So what would be the price to earnings or some flavor of the value of acquisition that we plan to do given that purchase based funds?

44:22 So let me answer your first question, the dividend question. We've been given steady dividend, the equations. This is no different from what policy we had in the past. And I I don't think we have really... Raising the funds is not any way linked with the dividend. The steady income that we've given to shareholders, and that's... We continue to do that. And regarding acquisition and all, I mean, you're looking at different assets. Hopefully, we'll able to close something. But we look for, you know, value for money, so we can't... Mean, you don't have a target fee that you can talk about, but but we look for value for money, and we are not in haste to do a transaction. And you have another question. Think I agree.

45:07 Go ahead. So in terms of the loan, yes, as of September 30, we did have room. But once we raise the funds, we have repaid the entire loan. So as of today, we don't have any loans right

45:22 Sure. Thank you. So the PAC guidance that we've given, that would include the interest saving and the demerger, which which would be probably paid dilutive right now, like a loss at the PAC level. Right? The merger is not gonna happen this financial year. So the loss of the the agrochemical business will be in the earnings. So we expect that the agro business will lose about 20 crores of EBITDA. So that is already embedded in the earnings. So when we give a bad guidance, the loss of the agro is part of the bad guidance. And the interest income is also included Yeah. Of the money that we have discussed. Sure. Thank you. Next caller, please. Thank you.

46:11 Next question is from Arjun Krishnan. Hi, Arjun. Are we audible? Yeah. I think there is some audio issues with Arjun. The next question is from. Hello. Yes. So thanks for the follow-up. I I just wanted to get some idea from you regarding your ROW outlook for the next year. This year would be a strong one clearly.

46:57 But how how do you foresee FY '28 for ROW? And, also, I mean, based on the launch pipeline in US, what what sort of growth can we can we size in US for next year?

47:16 I think overall, we believe that our business should grow. I think we're giving... I don't wanna give a guidance for March 28 yet. I I think I wanna wait till end of the year, we expect to grow around 10 to 15%. I think that's our expectation. But I think with more precise guidance, we'll give, I think, closer to the end of the financial year. And it'll be driven by our ROW and, you know, our US business. But I think we'll give you more clarity at the close of the time.

47:43 Yeah. If I refer back to your commentary at the start of this financial year, you indicated that FY '28 and '29 could be strong years for Natco post '27. Right. So if if you're targeting, you know, 15%, you know, top line growth, is there potential for margin improvements which lead you, I mean, to believe that these two years could be strong? I think the challenge here is that, like, seeing... Does that... That's driven by the base business. And I think all the upsides of our investments that we made or the that we made that we we could possibly monetize are more than above that. So I think that that is not included in that because those are all very uncertain. So I think that we're not interested. We're just driven by the certain outcomes we are giving guidance on.

48:34 But any one times or exclusivity or any upsides from the investments that we're not in. And it's tough to judge, and I'll be very honest with you. I'd like to give guidance for the future years. I think you can have more clarity only when you're closer to the year. We can only make a, you know, a positive judgment of that that is the the... You're going to particular map. I prefer to talk about it closer to the end of the financial year. Right? At this time, I think I'll have more clarity, so it will be easier for me to charge. K?

49:09 Thanks. Thank you. Caller, please. The next question is from Rajat Srivastava. Yeah. Hi. Am I audible? Yes. Yeah. Please go ahead. Yeah. Hi, Rajiv. Rajiv, just one question. In the cash flow statement, I can see that there is some 300 crore CapEx already done in the first half, which looks quite high if I compare it to last year. Can you tell us where is this CapEx going, and if you could just share the CapEx guidance guidance for full year?

49:48 I think we target about 400% of the CapEx every year. So I think most of CapEx is going at... We are upgrading at Chennai and make good our API facilities. Our API new blocks we have built, so that has taken away about most of the cash. And we're also upgrading our formulation facilities. We added a new oncology line in our Nanajin side just coming to market. We just started production now. And also, we're setting up a a cartridge line to make someone go dry internally. So that is... That CapEx is also ongoing. That line will get ready next financial year. And general basic maintenance CapEx, so our mandate is around 400 a year. I think that'll... Typically, we spend about $3.50 to 400.

50:38 This year, we spend a little more in the half year, but, yeah, that's mostly how we do things here. Sure. Thanks. Okay. Thank you. The next question is from Aman Hasan. Hello? Am I audible?

50:59 Yes, Am I. Please go ahead. Sir, my question is regarding our associate appointed a new CEO. So what are the strategy? Can you tell us? Say say that again. I I don't understand. Can you repeat that question one word? Our associate at Coke appointed new CEO. Oh, yes. Of course. Of course. Yes. Yes. Yes. About that?

51:25 So so what is the upcoming strategy I want to know? He's mister Gulani. So he has been appointed recently. He is... Comes from very good experience in in a... Innovator pharma. Is... I think he was with Pfizer. I think it was his last job before he joined us. So he's he's a good person, and I think he has a lot of experience in prescription business, which has been the weakness of PADDCOPHARM. So I think after we came in, I think we've seen a lot of uptick in... And also other colleagues who have been recruited recently. I think they've been... We've seen an uptick in the prescription business. So I think that's the strength that they have. So we are happy with how things are going. Yes. And my second question, I had read a news regarding ad coker shutting down its plans because of because of nonprofit product.

52:23 They have laid off some people recently in one of the lines. I think the... Because... And that one time charge is already reflected in Natco. Yes. Yes. This one particular factory has happened. Yes. That's correct. Yes. And my last question is how big we take acquisition? How is big? Right now, position is that we own 49% of our account, and I think that's our position. And what is the cash in our book? As of today, after the rights issue... Amit can answer. Yeah. As of today, if we consider the right issue inflows, we are around 2,250 crore, two two five zero points. Net cash. Net cash.

53:08 Net cash. And how busy... And how big is transaction which we acquire? New acquisition. Even the ad cost, 13% or future acquisition? No. No. No. Upcoming upcoming acquisition. We don't know. I mean, we're we're shopping for different transactions, so we expect to use some some portion of this cash to to do this transaction. Okay. Good. Thank you. Thanks. Thank you. Please raise your hand from the participant tab on the screen to ask the question. The next question is from Subhash Gupta. Good afternoon.

53:56 Can you throw some light on the commercialization of n r c two six nine four? Any timeline to it as well as provide As of now, no, Subhash. I think we are still trying to redo the strategy. So we've done some phase one data. So I think now we're trying to see what the right strategy is in terms of what our phase two strategy should be. At this time, I have nothing to do with it. And my second question is with respect to the performance in this quarter. If you look at the performance excluding the associates, there has been substantial improvement in profit before tax. It has almost doubled over the previous quarter. Is this sustainable? I think so much our business has cycles and it has, you know, you know, different territories do well in different times, and there's also an element of one time orders that you get, ten minutes that you get. So when we give a guidance, I... We give it for the whole group.

54:58 I don't give it for one particular entity. Like, sometimes India does well, sometimes, you know, Canada does well, sometimes Brazil does well, sometimes USA does well. So generally, when we give a guidance, we don't, you know, try to capture, you know, volatility that happens in each market. So when we give a guidance, it is netting off all the ups and downs that we have. So I wouldn't want to look at it on a quarter to quarter and then by entity basis. You should look at the whole year to get a better understanding of that. And my final question is with respect to acquisitions. Are we thinking of concluding any acquisitions in the current financial year, whether in India or abroad? We're trying so much. We're trying one transaction.

55:43 We're running it, I think, quite seriously. Hopefully, we'll be able to close it. But, again, it's all subject to, you know, all the regulatory and all all the agreements getting that. But we are against... We're actually trying trying to do one more transaction. Thanks a lot. Thank you. This will be the last call. Thank you. You. The last question is from the. Yeah. Sorry for coming back in the queue, but I just wanted some clarity that you just mentioned about the activity thing. So prior to the rights, did we have any bankers bankers set up for doing a m and a transaction, or are we doing it after the rights closure? Or, like, how is that timeline going? We have always, again, transaction thing, which is just more like... Nothing is linked with rights.

56:35 Right? So the panels process and then the the the engagement for transaction is a pile... Parallel process. I think we... I mean, we spent... You look at it in the last two years, different transactions we spent last four or five years, we're taking through Natco, we spent nearly 3005% acquisitions. This has helped us set up a front end in The US. We are able to build a reasonable front end in South Africa. So obviously, South Africa being the biggest chunk of that money. So I think this is always an ongoing process. You will get multiple transactions, but in the end, you only consummate one or two. So that's how it's So just a thought of the acquisition. Why not purchase the entire stake of ad book? Like, we have 51 pending there. That seems like a target that we can directly acquire right now. I I I would love to think with it. At this time, only 49 was at office, so that's why we are here.

57:32 But, hopefully, I mean, if the major shareholder chooses to do it, then we'll... At this time, it's not at play. But that certainly, I think if they are interested, we are also interested. At this time, only 49 is at play, so what's working? What's Okay. Think the asset is so valuable that that 49 also is very meaningful. That's why we took it. Sure. So we have the first right of refusal right there. So Absolutely. That up. Sure. Thanks. At this at this, I'll end the call. Yeah. Again, thank you very much. Thanks for your questions. Thank you. Passing the call to mister Rajiv Manan for the closing remarks. Thank you, everyone, for joining today. If there is any question unanswered, please reach out to the investor relations team. Thank you. Thank you very much to Natco's management team.

58:20 Ladies and gentlemen, on behalf of Natco Private Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your line and exit the webinar. Thank you.