Torrent Pharmaceuticals (NSE:TORNTPHARM) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q1 FY 'twenty seven Earnings Conference Call of Torrent Pharma Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Sudhir Menon, Executive Director of Finance and CFO. Thank you, and over to you, sir. Thank you. Good evening, and welcome to quarter one FY 'twenty seven earnings call of Torrent Pharma.

0:46 Consolidated revenues were INR 4,921 crores, up by 55%, while operating EBITDA at INR $16.64 crores was up by 61%. Operating EBITDA for the quarter stood at 33.8%. The merger of JP with Torrent Pharma has been completed with effect from July 8, appointed date being 01/21/2026. During the quarter, the underlying JV business reported revenues of INR $120.01 crores, up by 10% Y o Y, with operating EBITDA of INR $4.24 crores and EBITDA margin of 35.3, registering an improvement of more than 6%. JV India branded business grew at 13% for the quarter.

1:32 International business grew by 12%. Torrent based business revenue grew by 17% for the quarter. Operating EBITDA for the quarter was INR $12.40 crores, up 20%, with margins now at 33.3%. India business reported strong growth of 19%, while Brazil revenues grew up by 27%. On the generic business side, U. S. Business grew by 36%, which includes certain onetime opportunities, while Germany revenues were up by 3%. Leverage that is net debt to EBITDA stands at 2.07%, considering underlying EBITDA of the combined company. I will now hand over the call to Aman for update on India business. Thanks, Sudip.

2:18 I'll actually first start with JD. Following the operational reset executed in Q4, we have seen a healthy recovery in business performance during Q1 FY 'twenty seven, with the India Rx business growing at 13% and the international business, including CDMO growing at 12%. The overall business integration is progressing well with policies and practices now largely aligned with that of the base business in all territories. With the completion of the merger process in July, we have now already initiated the next set of integration activities. While this will not have an impact anything close to what was seen in Q4, There could be a minor and transient impact in revenues in some territories until the integration is completed over the next two to three quarters.

3:05 For instance, we have started merging certain brands and divisions in the India business from JV to Torrent post the merger. Usually, this process takes a few months to complete, after which the sales trajectory returns back to normal if executed well. In the international business, we are evaluating portfolio rationalization in certain territories of lower margin and lower priority products, similar conceptually to what we did with the India trade generic business in order to help enable further network optimization. We believe for the full year FY 'twenty seven, double digit revenue growth for India's JV's India Rx business should still be possible, given the robust underlying trends seen in Q1 of an uninterrupted quarter, and the international business should also recover post the changes implemented.

3:57 The JV CDMO business continues to do well, and there is no further integration involved here. Consequently, we believe that high single digit to low double digit constant currency growth for the full year should be possible. Overall, cost synergy realizations are tracking ahead of plan, and the realization should further increase quarter on quarter from here, which should help offset any potential revenue weakness that we may see due to the explained reasons. And hence, there should not be any impact at the EBITDA level for the JV business for this year. Most importantly, I would like to highlight that we have not cut any essential costs whatsoever that can hinder business growth. Moving on to the base business. Torrent's India based business revenues for Q1 were INR 2,157 crores, registering a growth of 19% versus the IPN growth of 12% as per the AISC PharmaTrack data set.

4:52 The high growth was delivered as a result of an overall increase in IPM growth, new launch performance and volume growth acceleration from field force expansion. The Curetio business continued its strong growth trajectory, growing at 34% in Q1, driven by OTC ad spends and field force expansion. We are undertaking further field force expansion in this curation business in this financial year, given the positive outcome. We are hopeful that the business should continue with a similar high growth trajectory for the rest of the year. On the chronic front, Torrent continues its market outperformance and has achieved a significant milestone in the cardiac segment as Torrent with JV now ranks first in the cardiac market. The cardiac market is the largest and amongst the fastest growing markets in the IPM.

5:40 Our combined field force strength at the end of Q1 was 9,400 with base business strength at 7,200 and JV strength at 2,200. The combined PCPM stands at just over 10 lakhs, which scope for further improvement from here on as well. JV's field force attrition is now down to 16% in the month of June compared to nearly 30% pre acquisition. On semaglutide. Following the strong start, our semaglutide franchise in India recorded Q1 market share of 36% of the oral and injectable combined as per the PharmaTrack data set. Even with one more competitor entering the oral market, we were able to hold on to 94% market share in the month of June.

6:27 The recent unforeseen supply related issue with our manufacturing partner for the injectable product is an unfortunate temporary setback. However, we have already secured an alternate supply source for the product and are hopeful that all Simulix SKUs should be back in the market by the end of August. While there will be lots of sales from these SKUs in July and most of August, we remain hopeful that we should be able to recover our market share quickly due to the early established brand equity. Further, this has no impact on our oral brands or the reusable SKU. With INR 50 crores of combined sales registered in Q1, we were well on track to achieve our INR $2.50 crores target for the year in absence of the supply issue. And while this setback will affect our near term sales, we believe it should not materially derail the overall leadership trajectory of the brand for the rest of the year.

7:19 We would, however, like to wait for one more quarter to provide a revised objective for the franchise after observing the recovery trajectory. Going forward, we expect our overall India based business to continue outperforming the market growth. Our focus during FY 'twenty seven will be to continue improving our market share in focus therapies, improving field force productivity in the expanded divisions and continued scaling up of the curation business. I'll now hand over to Mr. Sanjay Gupta for an international update on the international business. Thank you, Oman. We'll start with our branded generic market of Brazil. Based on internal sales, Q4 constant currency revenues were at BRL 147,000,000, registering a 3% year on year growth. IQVIA data show Q1 market growth at 4% with Torrent growing at 19%.

8:07 This was aided by the strong performance of top brands and recent launches, primarily rosuvastatin and elicimeric. The generics division of Torrent was also contributing to strong growth and represents about 22 of sales in this quarter. During the quarter, we undertook a onetime channel inventory reduction in response to channel request for extended credit period amid rising interest rate costs, which led to a primary sale, which is inferior to our growth of our secondary sales. Secondary sales continue to reflect underlying demand momentum as reflected in the IQVIA data. In The U. S, we registered constant currency revenues of INR 44,000,000, up by 23%. Growth is coming from our new launches where we have achieved our target market share as well as certain onetime opportunities.

8:56 In Germany, our business registered a constant currency revenue of EUR 29,000,000, down by 9%. The growth continued to be impacted by supply disruption at third party supplier and lower tender offtake during the quarter. With that, I would like to conclude the opening comments and open the call up for questions. Thank you very much. We will now begin the question and answer session. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from Kunal Damesha from Macquarie.

9:49 Congratulations on good set of numbers. First one on the profitability of JB Pharma business, which is coming out to be exceptionally strong. So is it largely the function of the cost synergies that we we were envisaging? Or there is some, let's say, because the CDMO business is up meaningfully, there is some operating leverage also kicking in. And from a full year perspective, how should this 35% -plus number look like for GB Pharma? Yes. Would say the margin improvement is largely because of the cost synergies being implemented sooner than expected.

10:36 Maybe a minor part of it could be because of the operating leverage, but it's largely because of the cost synergies. And then sorry, for the rest of the year, I think margins from here because the steps that we took for the cost synergy realization, they were started in Q4, continued in Q1. So this is just the beginning of the realization that's happening. So I think every quarter, there should be some incremental improvement. I can't comment on how much because we're also reinvesting some part of it into the business niche territory. But certainly, the margin trajectory should improve from here. So and sir, then, Benoit, our first year synergy target of INR 90 crore, it seems that we are well ahead of the tracking ahead of this target, right? So would you like to update the target for us?

11:30 We can't share what the exact number may look like, but certainly, yes, it's going to be above 90. It's definitely going to be above 100. But because, as we mentioned, there are going to be some changes further in some territories, don't know what the top line impact is going to be. It's not going to be significant. But as a result, we'd rather refrain from giving that exact synergy number for the year. But certainly, yes, it's much higher than the 90 crores. Sure. And second question on Brazil. I mean, we mentioned that there is some channel inventory correction. And I might have missed it. Have we shared the what's the exact impact in this quarter? And do we expect that to come back in quarter two? Like should we be back to the normalized growth rate in terms of constant currency in quarter two?

12:17 Correct. So we expect the normalized growth rate to come back to, again, mid teens level growth as reflected in the IQVIA data. And this impact, I mean, without the internal inventory correction, our constant currency sales would have grown by between 15% to 18. 15% to 18%. Okay. So there is a meaningful impact. And lastly, any update on our semaglutide filing in Brazil? Yes, it is still with the regulator. So we the regulator has taken upon itself to expedite all semaglutide approval and we recently saw five approvals come day before yesterday. So we are optimistic that the regulator will also consider our application favorably, but I don't have any precise guidance to give you.

13:07 So there's nothing pending from regulator for us to kind of answer or anything? No, it's an ongoing dialogue, but the regulator has all the options in front of us. So I don't want to tell you how many months it will take, but I would guess that it will take months and not years, but that's I mean, that's my perception rather than any definite comment from the regulator. Thank you. The next question is from Neha Manturia from Bank of America. Please go ahead. Yeah. Thanks for taking my question. Amir, I think you mentioned that as you integrate the portfolios of JD and Torrent, you know, we could see some impact in, I think, the second and third quarter before they normalize. Could you give us some color in terms of what you're exactly, you know, mentioning here? I think you mentioned cardiac as being one of the areas. If you could just give us some color as to why we should see this impact during the integration process, please?

14:15 Yes. Because if, say, a mid- large sized brand in JD has been built by JV field force and launched by JV over and kind of grown over the years. If you move that to a Torrent division with Torrent reps, the reps would not know all the territories and prescribers and so on immediately. So there's a very robust process that we follow-up the brand transfer, which minimizes any such loss of knowledge transfer. But we've seen in all the past acquisitions that there is usually some kind of transition impact that comes across because of this reason. But it usually is it comes back to the normal growth trajectory very fast. Okay. So our assumption is that by the end of this year, by fourth quarter, we should see normalization of any transition impact?

15:06 That's right. Since we got the merger approval in July, we implemented this immediately in July. We were expecting the merger to probably happen a bit later. So it would happen a bit later. But since, I mean, it's a positive that it's happened right now. So we'd rather get this completed within this year itself. Understood. And an extension of that, as you think about revenue synergies, post this integration is done, etcetera, given that you're already guiding to go double digit growth. Could you throw some light on the likely revenue synergies that we can see as an integrated business in India? And what could be the areas that you could think about from a revenue synergy perspective? Yes. We'd still like to mention that revenue synergies, we are only comfortable starting from next year because there's going to be all these changes happening this year. But we still continue to believe that there is a good potential for revenue synergies because of the cross sell potential, the knowledge transfer and the combination of the field force together, all of that put together.

16:10 It's certainly possible in the cardiac and gastro brands and segments. But we'd rather wait for the full integration to complete and then give a better sense on that. Understood. And my last question is on the margins. Given that we have finished completed the merger six months, nearly six months ahead of plan, Subir, is it fair to assume that this... You know, the three year time line that we had and, you know, we are we are going ahead of plan from the cost synergies, the year three target can actually be achieved in year two itself. And I think we had manufacturing synergies were not included in this number. So could we quantify that if you have a handle on that? No. I think manufacturing is being taken in the second phase, Nia.

16:58 But yes, I mean, the three year picture which we had given you earlier, the synergy realization could be much faster than that, given that we are six months ahead of the initially perceived merger. So things should speed up faster, Neha. Okay. So it's fair to assume that the margin we were expecting for JV in year three is now possible in year two itself. Would that be a fair assumption? I don't know. You'll have to wait for one or two quarters more for me to give you a better guidance. But the way things are moving on, it's looking positive for us, Niya. All right. Okay. Got it. Thank you so much, sir. Thank you. The next question is from Damiani Kerai from HSBC.

17:46 Please go ahead. Hi. Thank you for the opportunity. My first question is on semaglutide for India and Brazil market. So starting with Brazil, while you are waiting for Envisa to come back on your filing, we are seeing, like, some players coming ahead of you. So... And we understand there are more filers for this product. So how do you see this opportunity, whether this will be still meaningful or it will be more competitive than what you initially anticipated? So we are used to competitive launches in Brazil. So I mean, this is kind of a normal phenomenon. And we saw five approvals recently out of which four come out of a single company, right? So it's not very unusual.

18:35 And so what I would say is that as long as we are not very far behind, we are confident that we'll be able to capture, let's say, a double digit market share as we have done and demonstrated many times in the past. But so I can only rely on my track record and my strength with the physician community for which I'm confident. But again, I don't know how many more approvals are coming, right? So I'm just pushing for my approval so that I can launch ASAP. I'd just like to add that, yes, I mean, given our historical strength in Brazil and our position, especially in the chronic and cardiac diabetes segment, we would have been keen to have the first mover advantage, but unfortunately, that's lost. And we admit that's a bit of a miss from our side.

19:27 Sure. And in India, while your supplier has run into some supply issue, and you mentioned this is all transient and everything should be back on track by August. But, nonetheless, when we look at the broader market, which are available through secondary data provider, it seems like the semaglutide market has plateaued now after initial ramp up. So how do you see the overall market moving from here on after the initial big jump? I think there has been some signs of flat to in there. So it's not surprising actually that this has happened. The first month, there was because of all kind of intensity of promotion and the general awareness about semaglutide, probably there was a lot more trials that were happening at the prescription level, which probably would have led to some drop offs, which is not unexpected in such a category being an injectable.

20:32 The product also does come with its side effects unless you are really the right patient for the product, you're likely to discontinue the product as well. And of course, there could have been some element of overstocking that may have happened out of anticipation of the channel for higher demand. Honestly, this is not a concern from here going ahead. I think gradually, it should improve month on month from here is what we believe. We're already seeing that traction in the month of July as well in the market. So and especially in our case, I think the oral has continued to do well, which probably means that the oral drop offs are not as high as what we expected. So as long as we get the injectable back on time, I think we should be in a reasonably strong position as earlier.

21:26 So you mentioned $2.50 crore kind of number for yourself. But at the market level, how big that can be if we look at the current scenario? I would say probably 700 crores, 800 crore type of market, maybe slightly bigger is what it looks like for the first year. Sure. My second my last question is on India business. So 19% growth, and that has been very strong trend. So first, if you can split across the growth drivers, volume, price and new launches? And specifically, how do you see the momentum continuing on the volume and new launches part given we are seeing higher than historical numbers there for the market in general?

22:19 Yes. So the PharmaTrack data shows 19% for the base Torrent business as well for the quarter. The breakup of that is 5.1% volume, 7.7% price and around 6% new products. This is versus 2% volume of the market, 5.8% price of the market and 3.8% new product growth of the market. The IPM growth has picked up this quarter, and I mean, it's likely to continue for the rest of the year, but we can't say exactly what the market growth is going to be. So as long as this market growth continues, I think our trajectory should be similar given I mean, assuming the semaglutide situation is back to the normal trajectory, then it could be similar.

23:13 Just a clarification. We understand the contribution on new product side has largely come from semaglutide, but the volume has also, I guess, gone very meaningfully for Torrent as well as for the IPO in general. So what could be leading to that? It's difficult to pinpoint because it's just a one quarter phenomenon. So if we wait a couple of more months or quarters, we can get a better sense. But certainly, there is a higher than expected uptick in the market volumes. Okay. Thank you. I'll get back in the queue. Thank you. The next question is from Abdul Qadar Puranwala from ICHI Securities.

23:59 Please go ahead. Yes. Thank you for the opportunity. Sir, my first question is with regards to the semaglutide opportunity. You know, so based on our experience in India and in Brazil, if you could, you know, help us understand that in your opinion, how much time would the generic players will take to settle down on their market share? And whether in the next year, you know, three to four months, what is the kind of competition intensity you see in India as well as in Brazil? So just to clarify, we've not launched in Brazil. Obviously, we are tracking what's happening in Brazil, but we have not launched. So it's hard to comment. In India, again, we ourselves ended up facing an unforeseen situation. So it's still when the market forms, things are fairly unpredictable.

24:50 But as long as the supply situation remains the same for us and the competition, there's no additional bottlenecks that come up. My sense is that the market share should not change materially from here. Okay. Okay. Understood. And sir, for the base business, would it be possible share what would be your constant currency growth this quarter? For which country? For Torrent Pharma on a consolidated level, that is excluding J. B, what would be your constant currency growth? We don't look at it from that perspective, but any specific geography you want, we can call that out. Okay. Has already... I can see that in the press release.

25:38 Yes, yes. Sanjay has already called out because if you look at Brazil, Germany, U. S. Put together and add India as well, that contributes almost 85% of our business. So that's the three geographies which Sanjay has indicated. I think Priti should give you the color. Okay. Okay. Sir, anything on the margins we would like to call out in terms of your guidance for the full year? Are we reiterating or any color on margins for the full year? Abdul, as you know, July 8, the merger happened for us. And now there is a system integration, business integration, which has already been triggered. I would like to wait for one more quarter till the combined entity settles before I can try and give you some guidance for the full year.

26:27 Sure, sir. All right. Thank you. Thank you. The next question is from Shyam Srinivasan from Goldman Sachs. Please go ahead. Yes. Thank you for the opportunity. Good evening. Just one again on the semaglutide opportunity in India. I'm not sure whether our earlier guidance was for annualizing INR $2.50 crores. Maybe I thought it was 200 So is there an upgrade? That is one. And when I look at the split of oral versus injectable, has that changed from there, if I recollect that number, 30% oral? Given how well you're doing on oral, has there been an upgrade there in terms of how you look at the relative between the two segments? So we had shared 200 to two fifty last quarter. And what we had mentioned in the opening remarks was that given the trajectory in Q1 before the supply issue of INR 50 crores, and the expectation is that every quarter, it would gradually increase. And hence, it would have been very close to that INR $2.50 crore number.

27:29 But given now that we're faced with the situation, that's definitely not going to be possible. But we would rather wait for another quarter to see how our relaunch of the lost SKUs, how quickly they can regain share, and then we can get back with what the annual number could be. That's helpful. And when we now use these other alternate API source from an injectable perspective, presume, what is our current share? I think the combined share of 36 includes oral plus injectables. So just wanna understand how we are just faring on the injectable part of the on the presentation? And what gives us the confidence that with an alternate API, we'll be still able to maintain our share, let's assume?

28:16 So the brand that is affected and specifically the SKUs that are affected was about 20% of the total monthly contribution. And API is not really the reason why I mean, whether a brand can regain share or not. I think the as long as the API is approved and kind of has gone through the whole trial with the company that's registered the product, it shouldn't really make a difference. Got it. Got it. That's helpful. And just the last question on JB Pharma. We have guided to getting back getting full on a consolidated basis, I think, double digit growth for that. So versus where we are today. So what are the steps that we need to kind of keep monitoring from a perspective? You talked about attrition coming lower on JV. So just want to understand what are the kind of leading or the milestones that we are looking forward to in the next six, nine, twelve months that will help us put on that specific part of higher growth in JV?

29:23 I would say for the next six months, the focus will be largely on ensuring that the merging of the divisions and transfer of brands from J. B. To Torrent goes smoothly. We would want to spend most intensive effort on ensuring that each territory, each rep and each kind of chain of the field force is fully in grip of what's being handed over. And if that's fairly smooth for the rest of the year, then I'm sorry, by the end of the year, after that is when we would start looking at further growth initiatives. You can't really execute both at the same time because that would lead to a bit of over ambition. Got it. Thank you and all the best.

30:13 Thank you. The next question is from Pankaj Tivriwal from Itigai Asset Managers. Please go ahead. Yeah. Good evening. Congratulations, Aman Sudhir, for a great execution once again. My question just always on the international business. So when we look at, for example, The US piece, and please correct me if I'm wrong, the absolute revenue levels are virtually the same as it was in FY 'fourteen in USD terms. How should we see the trajectory going forward for U. S. As we move ahead? And Germany also, we have seen market share loss over the last four, five years from about 7% to 5%. To interrupt you, Pankaj, but your voice is very low. If you're on a hands free request you to use the handset.

31:12 No. I am on the normal phone. Alright. Can you please speak a little louder? Yes. Better. So the second question is on the Germany side, where the market share has declined over the last four, five years. Various challenges have been there. Can you throw some light on how do we see Germany picking up this year and next year? And last question is, you have executed extremely well when we look at acquisitions, Indian markets. What's the vision for the next three years where you think Torrent will focus on incrementally going forward? These are my three questions. Thank you. So I will start with the international business. So essentially, we don't look at like the battle that we fight is by country, right?

32:01 So each country has specific dynamics and specific issues. So on the branded side, which are markets like for us, it's Russia, Philippines, Mexico, Brazil, we are doing very well and much ahead of the underlying market growth. On the generic side, the two big markets we have are U. S. And Germany. U. S. Has been stable. And this year, we would be profitable entity in The U. S, which was unlike what it has been in the last five years. So considerable progress has been made on the bottom line through cost savings and through efforts to bring in more launches, which are still modest. But last, I would say, we've lost 17 products in the last thirty months, and they contribute roughly about 20,000,025 million dollars to sales and which compensates largely the price erosion that has taken place or and so U. S. Is, I would say, on a stable trajectory, and it will only get better from here, both in terms of top line and in terms of bottom line contribution to Torrent. And at least, will not subtract from the bottom line contribution.

33:08 We have challenged the state by in Germany. So the Germany, the challenge is twofold. One is, I would say, linked to the fact that our prominent supplier, which contributes, let's say, about 10% to 15% of our revenue that supplies has been out of business. And so that is hurting us a lot. Secondly, despite making a lot of efforts in saving costs and reducing our costs and making ourselves more competitive, we still find ourselves sometimes outbid by our peers in the tender process. So I would say that journey is not finished. So we have to kind of tighten our belts and work better on cost optimization in order to win more tenders. So I can't say we are out of the woods in Germany. I would say, right now, we are still in the middle of the woods.

33:58 But other than Germany, I would think the rest of the places, we have a clear line of sight. And I would say, if we look at over extended period of time, we've been making progress. Thank you, Sanjay. On the last question. Capital of it's a question of capital allocation from here. I mean, I would say it's still very early days in JV. We're hardly six months into the acquisition. We'd rather wait for at least another twelve months, maybe eighteen months for getting our own comfort that things have gone as per plan and smoothly. And after that, yes, definitely, there'll be opportunities, which we'll start looking at again. And as we will grow in scale, the opportunities also change in nature, and we'll keep evaluating whatever comes our way. And regardless, I think we would not want to be above, say, 3x or 3.5x net debt to EBITDA for whatever opportunity we consider.

34:55 So we will wait for JV to happen, and then we'll see how to look at the next strategic options. Is it fair to say that the next big capital allocation could be international rather than domestic? Our preference is that if we had the same size opportunity in front of us in India versus international, regardless of how big or small, it will always be India first. So I mean, which right now, there's no major kind of opportunity that's on the horizon on the India market side. So in absence of that, yes, we may look at some midsized international acquisitions as well. Thank you, Aman. Thank you, Sudhir. Thank you, Sanjay, and wish you guys all the best. Extremely happy with the execution you guys have done over the last few years.

35:44 Thank you. Thank you. The next question is from Vivek Agarwal from Citigroup. Please go ahead. Yeah. Thanks for the opportunity. Sir, if I look at the gross margins in the base business, so it looks like you have done close to 78% gross margin, which is significantly higher than, I think, your previous trajectory. Just want to understand what has drove the improvement in gross margin at a time when there is some kind of cost inflation as well because of the geopolitics, etcetera. How sustainable this how sustainable that will lead these margins to that? If you can help us at this time. So Vivek, I think last year, we were doing around INR 76 crores, INR 76.5 crores is what I recall as the gross margin for the base business.

36:37 And every year, two factors definitely play out on the improvement of gross margin, which is the price increases, which we take every year, and that starts from typically April. That's point number one. Point number two, India business has exceedingly done well. And overall, the branded business contribution has been higher compared to the previous year at 76% versus 74% historically, which we've had. Plus some amount of ForEx, which is playing positive. I think all three put together, we've improved our margins. So is it sustainable in the base business, 78% kind of gross margin level? So I can say definitely if last year was 76%, 76.5%, anything up to 77% is looking definitely sustainable.

37:35 Beyond that, as I said, there are other factors which have played out, which is contributing to the incremental gross margin. Understood. Now a related question here is that you were able to the overall EBITDA margin again in the base business, down 33.3%, right? So and there's a significant increase in OpEx, around 32% if you put together employee and other expenses. So there, for example, these sharp increase in this expenses going to us? Vivek, again, the ForEx factor plays out on the expenses side also, right? I mean the expenses also looks a little inflated because of the ForEx. That's one. And secondly, yes, quarter one, typically, we in the branded businesses, the spend is higher compared to rest of the quarters.

38:25 And that's the reason why you see quarter spend a little higher. Understood. So how one should look at your EBITDA margin trajectory in the base business from year on, let's say, over the next four quarters? So base business, our guidance since the last two years has been at least a 0.5% improvement, right? So if you look at the improvement, which has happened in quarter one, it's 0.5% to 32.8, which we had registered last year. Understood. Sir, just one more question on revenue synergies. Although you talk about cost synergies and good to see that cost synergies are tracking ahead of guidance. Any possibility that if you can talk about revenue synergies? No. We just mentioned in one of the earlier questions that we'd rather wait for the integration to complete, and then we can get a better sense of the revenue synergies.

39:27 The next question is from Rahul Giovanni from IIFL Capital. Please go ahead. Yeah. Hi, sir. Thanks for taking my question. Sir, on this organic India growth also 19%, if we ex out the CEMA contribution as well, then ex of CEMA, our organic business would have grown roughly 16% for the quarter, which is a significant acceleration from our previous trajectory of around, let's say, 12 and a half, 13% growth. So ex of SEMA, what is helping us to, let's say, drive better growth in the India business? So are there any specific Torrent related factors? Or it is just an acceleration in the overall IPM growth as well?

40:15 Certainly, the IPM growth acceleration has played a big role here, but there are certain Torrent specific factors as well. One being the curation portfolio, which is now a pretty sizable part of the portfolio, and that's growing at 34%. So I don't know the exact numbers, but I'm sure that's adding intimately quite a meaningful way to the overall group profile. And second, it's a culmination of all the expansion done over the last two, three years, which we are continuing to pursue as well. That has led to some of the larger brands grow much faster. And when that happens, the overall growth profile improves. So that those two, factors have led to this performance. Okay. And I was looking at my numbers ex of curation as well. So curation obviously did 34% growth for the quarter. But ex curation, our base organic business, excluding sema, again is showing up 15%, 16% trajectory. So maybe why it's the base brands also, which would have helped to some extent?

41:15 Yes, yes, you're right. Because the top so we now have actually, I believe, 28 brands above INR 100 crores. Apart from three, four of them, which are mature products and growing single digits, all have grown quite well. Some of the top 10 brands have grown 20% -plus. So and then these are all in the expanded divisions and regions. So when the top 10 brands are growing at such a pace, that changes the overall growth profile. Now I don't know how sustainable this is. It's probably an expansion where it could be for the rest of the for the year, it may continue. Will it continue for next year? I don't know yet. But certainly, that's helped us. Sure, sir. And these 10 brands growing north of 20, this we are talking about your own base portfolio ex of JV?

42:06 That's right. Yes. Okay. So sir, and how would, let's say, JV's brands could have grown particularly on the cardiac side for the quarter? As per the usual trajectory, some may have been slightly slower, some slightly faster. So average net growth trajectory has been around the same as earlier of the cardiac, gastro, all of the brands. Okay. And we talked about rep expansion for the curation business. But I think overall India level, let's say, what kind of rep additions we are targeting this year versus this combined number of 9,400 reps? So we will add in the base business strength, but it's not going to be fresh expansion.

42:55 It's going to be restructuring from the JV divisions. And in fact, even with additions in the base business MR trend, the total number of MRs is going to reduce, which already since the integration has started in July, we expect that Q2, the MR spend should be closer to 9,000. Okay. And what do you think this number could be by the end of the year? End of the year, we haven't chartered out yet, but it probably will be around the same, maybe slightly less. Okay. Sure, sir. And sir, last question from my end. Obviously, you are not commenting in terms of how the cost synergy target would do as in in terms of the cost synergy guidance which we had given earlier.

43:45 But if you can just quantify what was the benefit of, let's say, the cost synergy numbers sitting in JV's EBITDA margins this quarter. So out of this 35% margins for JV, what would have been the contribution from the cost synergy number? Rahul, I think a better way for you to calculate yourself is take the base EBITDA number of JV, which was there last year. And then historically, see organically what kind of improvement happens for JV margin. Anything above that is an indication of cost synergy. Okay. Sure, sir. Yes. That's it from my side. Thank you. Thank you.

44:33 Before we take the next question, a reminder to participants that you may press star and one to join the question queue. The next question is from Tishar Manudane from Motilal Oswal Financial Services. Please go ahead. Thanks for the opportunity. First, on the industry level India prescription side growth, last few months, the growth has been encouraging even in the chronic therapies as well as acute therapy. So what's changed you have witnessed if to drive the industry level growth? And so how sustainable that is? It's again, just been a quarter of this kind of increased growth. So let's see how long it sustains, and then we can get a better sense on what's really driving it. Right now, there's multiple factors. We can't tell which one is driving the biggest incremental impact. So maybe next two, three quarters, we can get a better sense.

45:38 Okay. Because it is also driven by volumes and not just, let's say, price and new launches. So existing base portfolio also growing at... By volume. So is it, like, shift from trade and risk to, again, our calculation has not changed much over the last five months. So just trying to understand what is driving the IP and growth? So we'll get a better sense using our own numbers and understanding after we see maybe one more quarter, two more quarters of data. What you mentioned could be one potential reason, but I personally don't think so. So let's see if we will give more feedback on this in the coming quarters. Got it. And just a lot of discussions have happened with respect to some of the trade for Brazil market, but just the way it happens, let's say, in India also, like one can use the marketing authorization of the other company.

46:33 So is that the way possible for Torrent in the Brazil market, while we might have wait for our own approval, but you could use market authorization and start marketing the product? Yes. In theory, it is possible, but so far we've not been successful in finding a suitable partner. So this is called distributor type arrangements where you become a distributor of another company. So as of today, we don't have a concrete proposal. Got it. And again, just one more on this. So is it because of Doctor. Reddy's issue where the approval for us is stuck? No. So we have not never commented upon our partner. And I can tell you that it is not Doctor. Reddy's.

47:22 Thank you very much. We'll take that as the last question. I would now like to hand the conference over to the management team for closing comments. Thank you very much for joining the call today and for following Torrent. IR team stands by to answer any further questions. Thank you. Thank you very much. On behalf of Torrent Pharmaceuticals Limited, that concludes this conference. Thank you for joining us. Ladies and gentlemen, you may now disconnect your lines.