Yogesh Agrawal: Good afternoon, everyone, and welcome to Ajanta Pharma's Q2 earning call. With me, I have today Mr. Rajesh Agrawal, our Joint Managing Director, Mr. Arvind Agrawal, our CFO, Mr. Rajiv Agarwal, our Vice President Finance and Investor Relations. I hope all of you have received the financial results by now. Before we start, here is the order for today. I will cover the group and our international businesses. Our Joint Managing Director will take India, and our CFO will close with the financials and our guidance for the year.
Yogesh Agrawal: Please note that during this call, we may make certain forward-looking statements which are subject to risks and uncertainties. I will start with overall business performance and happy to inform you that we have closed the Q2 on a healthy note. Revenue from operations for the quarter grew by 33% to INR 1,794 crores. EBITDA grew by 47% to INR 543 crores at a margin of 30%, and profit after tax grew by 49% to INR 388 crores. For the H1, revenue grew by 29% to INR 3,420 crores and a profit after tax by 40% to INR 722 crores.
Yogesh Agrawal: Our financial position continued to strengthen with return on capital employed at 41% and return on net worth at 31% as at end of September 2026. These robust returns reaffirm our position among the industry's leading performers. Let me now take you through our key business verticals, starting with branded generic business in Asia and Africa, which contributed 38% to total revenue in the second quarter of the current financial year.
Yogesh Agrawal: We continue investing in new markets and products, which will ensure consistent growth in this part of the business.Starting with Asia branded generics, I am pleased to share that despite the ongoing geopolitical tensions in the Middle East, our proactive efforts to leverage alternative shipping routes have enabled us to ensure the safe and timely delivery of consignments to our respective markets.
Yogesh Agrawal: This has resulted in our Asia branded generic business bouncing back during the quarter with a growth of 18% and a sales of INR 366 crores compared with INR 310 crores in the corresponding quarter last year. In the H1, sales were at INR 621 crores compared with INR 614 crores in the corresponding period last year, representing a growth of 1%. During the H1, we launched four new products in the region and are confident that growth momentum will continue in coming quarters.
Yogesh Agrawal: Moving to our Africa branded generic business, in Q2, it continued to deliver a strong performance with sales increasing by 41% to INR 312 crores compared with INR 221 crores in the corresponding quarter last year. In H1, sales were at INR 607 crores compared with INR 449 crores in the corresponding period last year, representing an excellent growth of 35%.
Yogesh Agrawal: This robust growth in the H1 reflects gains in the market share, new product launches, field force addition over the last two to three years, and a favorable currency movement. During the H1, we launched three new products, further supporting our continued expansion across the region. As can be seen, our conscious call to keep the business well-diversified across markets enables us to keep performing and delivering growth in spite of the challenges. Let us now turn to other two verticals within our international business.
Yogesh Agrawal: Our US generic business continued to deliver a strong performance, contributing 27% to our revenue in Q2. During Q2, revenue grew by 41% to INR 484 crores compared to INR 344 crores in the corresponding quarter last year. For H1, revenue stood at INR 971 crores, registering a growth of 49% over INR 653 crores in the same period last year. The strong growth in Q2 and H1 was partly supported by a lower base in the corresponding periods of the previous year.
Yogesh Agrawal: During H2 of FY 2026, we had few limited competition products which had driven healthy growth. New players have now entered these products, which will moderate our growth momentum during H2 of the year.Taking these factors into consideration, we maintain our full-year revenue growth guidance of high single digits for the US generic business. During H1, we launched 3 products, received 4 final approvals, and filed 1 ANDA. We currently have 17 ANDAs pending approval.
Yogesh Agrawal: Let me now discuss our Africa institution business, which delivered a stronger-than-expected performance during the quarter, contributing 7% to our total revenue. Q2 sales grew by 259% to INR 116 crores compared to INR 32 crores in the corresponding quarter last year. For H1, sales stood at INR 187 crores, registering a growth of 164% over INR 71 crores in the same period last year.
Yogesh Agrawal: As we have consistently highlighted in our earlier communications, procurements by institutional agencies remain unpredictable, both in terms of timing and the value.While we witnessed strong procurement activity during H1 of the year, given the inherent uncertainty in this business, we do not expect the same level of sales to sustain in H2. Now I invite Mr. Rajesh Agrawal, our Joint Managing Director, to brief you on India business. Thank you, and over to you.
Rajesh Agrawal: Thank you. Good afternoon to all of you. Our India business continued to deliver excellent performance in Q2 of the current financial year. The strategic investments we have made in expanding our field force and entering new therapeutic areas have started yielding encouraging results.
Rajesh Agrawal: We remain committed to these investments to drive sustainable growth in the coming quarters and years ahead. Reflecting this progress, I am pleased to share that our overall ranking in the Indian pharmaceutical market has improved to 23rd in September 2026 from 24th in March 2026. According to IQVIA MAT September 2026 data, Ajanta continued to outperform the Indian pharmaceutical market, registering growth of 17% compared to the market growth of 13%.
Rajesh Agrawal: Our volume growth stood at 18% ahead of the overall market, while our growth from new product launches exceeded the market by 70%.Importantly, this performance was broad-based across most of our therapeutic segments, with our growth consistently exceeding the respective segment averages. We remain confident of sustaining this positive momentum in the years ahead. Within our covered market, we continue to rank among the top 10 players across all our core therapeutic segments.
Rajesh Agrawal: Cardiology remained the largest contributor to our India branded sales at 37%, followed by ophthalmology at 28%, dermatology at 22%, and pain management at 10%. Our newer therapeutic areas contributed the remaining 3%, reflecting the gradual progress of our diversification efforts. Coming to our financial performance, the India business contributed 28% to the company's total revenue during Q2. Q2 sales grew by 16% to INR 504 crores compared to INR 432 crores in the corresponding quarter last year.
Rajesh Agrawal: For H1 of the year, sales grew by a healthy 20% to INR 1,013 crores compared to INR 841 crores in the same period last year. Field force productivity measured as PCPM improved to INR 4.5 lakhs in H1 as against INR 3.7 lakhs in FY 2026. This performance was further supported by our continued focus on new product introductions.
Rajesh Agrawal: Our India business also includes the trade generic segment, which contributed INR 56 crores in Q2 and INR 104 crores during H1 of the current financial year. With this, I now invite Mr. Arvind Agrawal, our CFO, to take you through the financial performance. Thank you, and over to you, Arvind.
Arvind Agrawal: Thank you, and good afternoon to all. I will take you through the consolidated financial performance for Q2 and H1 of the current year. Revenue from operations for Q2 grew by a healthy 33% to INR 1,794 crores compared with INR 1,354 crores in the corresponding quarter last year. In H1, revenue grew by 29% to INR 3,420 crores compared with INR 2,656 crores in the corresponding period last year.
Arvind Agrawal: Of this, India contributed 28%, branded generics across Asia and Africa contributed 38%, US generic contributed 27%, and Africa institution 7% during Q2 of the current year. This is an affirmation of our diversified business model supporting consistent growth even in the face of challenges in some of our markets. Our gross margin stood at 79% for Q2 and H1 of the year.The improvement over FY 2026 was primarily due to favorable currency. For the full year, we expect gross margins to remain around 78% with a variation of ±100 basis points.
Arvind Agrawal: Personnel costs remained stable at Q1 level and stood at INR 384 crores in Q2 compared with INR 317 crores in the corresponding quarter last year, representing an increase of 21%. In H1, cost stood at INR 765 crores compared with INR 620 crores in the corresponding period last year, representing an increase of 23%. This increase was mainly attributable to annual increments, field force expansion, and additional manpower at manufacturing facility.
Arvind Agrawal: R&D expenditure, which is included within personnel costs and other expenses, stood at INR 72 crores in Q2 compared with INR 63 crores in corresponding quarter last year.In H1, cost stood at INR 138 crores compared with INR 119 crores in the corresponding period last year. This represented approximately 4% of our total revenue. For the full year, we expect R&D expenditure to be around 5% of revenue, with spending stepping up in the H2.
Arvind Agrawal: Other expenses in Q2 stood at INR 483 crores compared with INR 392 crores in the corresponding quarter last year, representing an increase of 23%. In H1 of the year, expenses were at INR 971 crores compared with INR 765 crores in the corresponding period last year, representing an increase of 27%. H1 other expenses include a foreign exchange loss of INR 26 crores. The increase in other expenses is in line with our business growth and mainly reflects higher selling expenses, international logistics, and manufacturing costs.
Arvind Agrawal: The increase in expenses also reflects our continued strategic investments in products, brand, and people across the branded generic portfolio. We expect other expenses to remain broadly aligned with the current trend. EBITDA for the Q2 was INR 543 crores, up 47% from INR 369 crores in the corresponding quarter last year, at a margin of 30% against 27% last year. There was no foreign exchange loss in the quarter, so reported and adjusted EBITDA are the same.
Arvind Agrawal: For the H1, reported EBITDA was INR 971 crores at a margin of 28%. Excluding the foreign exchange loss of INR 26 crores booked under other expenses, adjusted EBITDA was INR 997 crores, up 34% from INR 745 crores last year, at a margin of 29%.We remain confident of maintaining an EBITDA margin of around 27% with a variation of ±100 basis points while continuing to invest in the development of our markets.
Arvind Agrawal: This implies a lower margin in the H2 than in the H1, as competition in the US builds, institutional sales normalize, and we step up investment in R&D and our field force. During the Q2, other income stood at INR 42 crores, and in H1, it was INR 108 crores. Other income includes gain from foreign exchange of INR 24 crores in Q2 and INR 69 crores in the H1 of the current year. Taken together with a INR 26 crore loss under other expenses, a net foreign exchange effect for the H1 was a gain of INR 43 crores.
Arvind Agrawal: Profit after tax for the Q2 grew by 49% to INR 388 crores compared with INR 260 crores in the corresponding quarter last year, a margin of about 22% of revenue. For the H1, profit after tax grew by 40% to INR 722 crores compared with INR 516 crores in the corresponding period last year. The effective tax rate for the H1 stood at 26.5% and is expected to be around this level for the full year.
Arvind Agrawal: Capital expenditure during the H1 stood at INR 210 crores. For the financial year 2027, we expect capital expenditure to be around INR 400 crores, including around INR 150 crores of maintenance CapEx and the balance for capacity expansion.Coming to the working capital and return ratios, our financial position has strengthened between March 2026 and September 2026, where return on capital employed improved from 33% to 41% and return on net worth from 25% to 31%.
Arvind Agrawal: This was supported by better working capital management, with trade receivable days reducing from 125 to 100 days as there was better collection in the US business. Inventory days also improved from 63 to 52 days as we continue to focus on enhancing working capital efficiency. We closed September 2026 with net cash and investment of INR 574 crores after paying the interim dividend of about INR 400 crores during the quarter. To sum up, there are three things to take away from today. First, a strong H1.
Arvind Agrawal: Revenue from operations up 29% to INR 3,420 crores and profit after tax up 40% to INR 722 crores, with every business growing in Q2. Second, our financial year 2027 guidance is unchanged. Revenue growth in the high teens, which factors in a moderation in the H2 as new competition in the US takes effect and institutional sales normalize. Gross margin of about 78% and EBITDA margin of around 27%, each with a variation of plus or minus 100 basis points.
Arvind Agrawal: R&D at around 5% of revenue, an effective tax rate of about 26.5%, and capital expenditure of around INR 400 crores. Third, our balance sheet keeps getting stronger with return on capital employed at 41% and return on net worth at 31%. Our core branded generic business in India, Asia, and Africa remain the foundation for consistent growth in the years ahead.With this, we now open the floor for question and answer. Thank you.
Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Niharika Aggarwal with Nirmal Bang. Please go ahead.
Niharika Agarwal: Thank you for the opportunity. My question was more towards the US generics. We saw approximately a 49% growth in H1. I wanted to understand what is really driving this growth. Is it the new launches or market share gains in existing products or improving pricing?
Yogesh Agrawal: No, from the last year's H2 onwards, we had a product which had a limited competition situation, and we continued that for H2 of the last year, and currently this first 2 quarters, Q1 and Q2. Because of that, the sales in the US are at elevated levels, which we have seen, and that is what has shown into the 49% growth for the quarter.
Yogesh Agrawal: As we have shared in our opening remarks, the new competition has come in for this product. We are expecting our market share for this product to be reduced, and because of that, the sales will get normalized for the US going forward in the next quarter.
Niharika Agarwal: Thank you. With the 5 to 6 ANDA filings targeted annually, how should we view the US business trajectory for the next 2 to 3 years, more from a long-term view?
Yogesh Agrawal: I think I can only give a strategic direction that we continue to file this product. Like in the H1 also, we launched 3 products. We expect few more approvals during the next 2 quarters, and probably they will bring them to the market as well. We have some good products under the pipeline, subject to the approval from the FDA. We should keep bringing them to the market and launching them. I think we don't share the guidances for the next year, but for the current year, we've had a very good last year.
Yogesh Agrawal: We've had a very good current H2. Next 2 quarters also, with the sales getting normalized, we have still In the beginning of the year, we had given the guidance of the mid-single digit, which we are now revising to the high single digit for the US market.
Yogesh Agrawal: This is the outlook for the current year. Let us see how the situation evolves, how many approvals we get now, how many products we launch this year, Q1. According to that, I think next year we will probably share it at the appropriate right time, maybe in Q4 or the Q1 of the next year.
Niharika Agarwal: Thank you. On the Asia business, we saw an 18% growth in Q2. What is really leading to this growth? Are we seeing improvement in underlying demand, or is it because of product launches, or is it just because of the favorable base?
Yogesh Agrawal: Well, it is a combination of multiple things. The base for the earlier Q1, Q2 was around INR 300 crores. Last quarter, sales was slightly depressed at INR 255, but we have bounced back with INR 366. There were supply chain issues. There were some logistic challenges to get the stocks in the market. That has all ironed out. In the last quarter also, we said that there were some sales which were there in the last quarter which got pushed out last minute. We should see those reflecting in the Q2 and Q3, Q4 as well.
Yogesh Agrawal: I think combination of everything, a lot of things getting streamlined, the logistics, the geopolitical tensions which created the logistic challenges, that is getting streamlined. We are doing well. We are able to increase our market share.
Yogesh Agrawal: Combination of everything, we had ourselves given the guidance for the Asia in the high double digit, sorry, in the mid-teens. We continue to stand by that though for the first quarter, sales was less, but it will catch up in Q3 and Q4. For the whole year, Asia, we are looking to post a mid-teen kind of growth.
Niharika Agarwal: Okay, that is all for me. Thank you for the opportunity.
Yogesh Agrawal: Sure.
Operator: Thank you. Next question comes from the line of Tushar Manudhane with Motilal Oswal Financial Services Limited. Please go ahead.
Tushar Manudhane: Thanks for the opportunity. Sir, first on the step-up on the R&D spend, if you could further elaborate, this is for which geography? Is it just US or the other geographies as well?
Yogesh Agrawal: US is almost 50% is for the US and 50% is for the India and emerging markets. That is our R&D spend classification, approximately I am telling.
Tushar Manudhane: For US, this is like any specific product where we think there is an opportunity for us or these are for multiple products?
Yogesh Agrawal: No, no. We have a program runs on multiple products at a time, our team is developing. As R&D, we are developing not the simple IR products. If you see, more than 50% of our products are delayed release, extended release products. So we primarily focus on the complex products. That is why it takes time, and sometimes we have a good year where we have the good bio marketing.
Yogesh Agrawal: Sometimes the year we do not get that much success. So we are working at a time on multiple products. I think it could be more than 15, 20 products at a time. Our outlook is that we should file 8 to 10 ANDAs every year. Yeah, there are multiple products for any geography, not only for US. For any geography, there is a number of products which are being developed at a time.
Tushar Manudhane: Got it. Just on the EBITDA margin guidance of 27% plus-minus 1%, when we have done almost 29% for H1. By back-of-the-envelope calculation, it seems it is going to be like almost 26% for H2. Is that the way the trajectory of the margin would be, possible now?
Arvind Agrawal: Yes. That is what, because as we mentioned, MD also clarified about that, the US business is going to be a little lower. Even the institutional business is going to be a little down. So both of them getting normalized, I think EBITDA margins will be little lower than the H1.
Tushar Manudhane: Got it. Lastly, for the India business, the cardiology therapy growth has been lower than the IPMs. If you could just highlight in terms of steps you are taking to get either in line or better than the IPM.
Rajesh Agrawal: See, actually, our growth is in line with the IPM, as I mentioned in the presentation also. There is some anomaly in the IQVIA numbers, which we are trying to sort out, but I think it is taking some time. Otherwise, our growth in cardiology is in line with the IPM growth.
Yogesh Agrawal: Yeah, the cardiology growth is slightly better than the covered market. Generally, we are not worried about that.
Tushar Manudhane: Got it. Thank you so much.
Yogesh Agrawal: Yeah.
Operator: Thank you. A reminder to all the participants, dial * and 1 to ask a question. Next question comes from the line of Rashmi Shetty, Dolat Capital. Please go ahead.
Rashmi Shetty: Yeah, thanks for the opportunity and congratulations on good set of numbers. Sir, on the India part, in H1, we have seen growth of around 20%. Even IPM growth is pretty strong, around 12% to 13% for H1. So what we want to understand, and generally what we are seeing that the growth is broad-based only.
Rashmi Shetty: So what has really changed from earlier, where the growth was just 7% to 8%, and now it has more than 11%? What has really changed in the IPM itself, and even for our company, and whether this kind of growth is sustainable in next year also? If you can comment on this.
Rajesh Agrawal: Multiple factors. I think one of them is the penetration of the hospitals that is taking place. The number of beds to patient ratio is improving naturally. Also the fact that multiple government schemes are really helping to drive the prescriptions and the uptake thereby. So that is definitely helping. Insurance coverages, again, large government schemes as well as private insurance coverages improving. So these are all broader factors which are aiding the growth. Of course, this kind of growth was not forecasted until last year.
Rajesh Agrawal: Also, one of the things that is happening perhaps is the slight bit of slowdown in the growth of the generic, unbranded generic segment, which we saw taking off for the last 2, 3 years, has kind of slowed down little bit. So that is adding back to the Rx distribution growth. These are the very broad factors that are aiding. We hope that this trend continues. New product launches really as well.
Rashmi Shetty: Okay. For India business, for Ajanta Pharma, how should we see for the entire year, this growth? Should we still maintain that 13% guidance, or you feel that probably in the H2 also we will be able to do better?
Rajesh Agrawal: Our guidance is mid-teens. We have always maintained that we should be able to grow 20% to 25% faster than the IPM growth and the covered market growth, which is what we are doing. It would be marginally better, but again, it is a bit early. Post Q3, we will have a better understanding of where we expect to land.
Rashmi Shetty: Okay. On the Africa branded generic business, we are seeing growth more than 30%. For the H2, our base is also pretty high. What kind of normalized growth can we expect for the full year?
Yogesh Agrawal: No, Africa, we are having a very good momentum in our favor. The growth is a result of many things. As you would know, we have been expanding our field size in Africa significantly over last two to three years. Now we are seeing those field size are blossoming, and they are becoming more productive. We have also launched some good products, so that also is helping the growth. Of course, we are also taking the market share in our existing products.
Yogesh Agrawal: I think there is also some help which we got from the currency situation, which we have seen, if you see the same-to-same comparable period. Having said that, we have a good momentum. So, we have given the guidance of high double digit for the Africa business, and we are hopeful that to continue the momentum going forward in the Q2 also.
Rashmi Shetty: So, you mean to say that similar kind of momentum in the H2 also, despite the high base in H2 FY2026?
Yogesh Agrawal: More or less. Could be slightly less, but it will be a robust growth.
Rashmi Shetty: Understood. On the working capital cycle, John mentioned that credit receivable days and inventory days have come down. At the end of March 2027, what should we expect? Because these days will be down only compared to March 2026, or it would more or less come similar to the earlier levels?
Arvind Agrawal: I think it will come to a similar level. In receivables, you may see some improvement, but in inventory, we will go back to the March level, because currently, for H1 or quarter end, there was some down, but I think by year end, you can expect the same, like what last year we have closed.
Rashmi Shetty: Understood. Just on the one clarification required for the forex loss. In the consolidated P&L, how much was the forex loss which is sitting in the other expenses for this quarter?
Arvind Agrawal: For the quarter, there was no loss.
Rashmi Shetty: Okay, so nothing is
Arvind Agrawal: For the quarter, there is no loss, only there is gain. But in the H1, there is a loss of INR 26 crores.
Rashmi Shetty: Okay. Got it, sir. Thank you. That is it from my side.
Arvind Agrawal: And there is also gain which is sitting in the other income.
Rashmi Shetty: Other income, yeah, that I am aware. Yeah, sir. Thank you.
Arvind Agrawal: Net-net, we have got INR 43 crores of profit in the H1.
Rashmi Shetty: Okay. Okay, sir.
Arvind Agrawal: Yeah. Thank you.
Rashmi Shetty: Thank you.
Operator: Thank you. A reminder to all the participants that you must press star and 1 to ask a question. Next question comes from the line of Aman Kumar Singh, an individual investor. Please go ahead.
Aman Kumar Singh: Yeah, good afternoon and congratulations for doing a very good result. I would just like to know a little bit more about what we are doing to expand our Asia business. We have seen tremendous amount of growth in India business, in US business, in Africa business, especially the institutional side of Africa business this time. But what is our role, how we are going to expand this Asia business? Because if other business moderate, some of the areas needs to buck up so that we can have a better growth in the next coming quarters.
Yogesh Agrawal: Yeah. I think your question is very broad-based, so very difficult to give a very specific answer. But there are two folds, I will split it in two ways. The existing geographies where we are present, and the existing geographies where we are present, we have a very good product pipeline, which is under registration in the various countries. We have number of good products under development in the R&D. So both, as they come to the market, you see certain percentage of the growth is driven by the new product introduction.
Yogesh Agrawal: So we have a good product pipeline, and that will continue to drive the growth. We are also continuously adding the manpower, because we see there is a gap, there is a void, or as we launch more products, we need more people on the ground. So with that also, we are able to increase the growth momentum continues.Just to share with you, in the current H1 itself, we have added more than 100 people in the emerging markets in the field. We have increased our field size by about 5% for the H1.
Yogesh Agrawal: We have given the guidance that we will be increasing around 7% to 8% in the field size the whole year in the emerging markets. This is the one for the existing geographies. We are on track. The challenges we faced last year and the Q1 was more of a logistics and supply chain, not really the demand or our ability to increase the business or get the market share. As those two challenges are behind us, we are confident that we should be able to post good results in this thing.
Yogesh Agrawal: We are also actively looking at the new markets where we are not present in the Middle East. There are certain markets where we are at a mid-stage, we are not at a very evolved stage. Those also, as they keep blossoming, they also continue to deliver the growth. All in all, there are good engines or growth drivers which are there in Asia also, which have been put to give a sustained growth in the coming year.
Aman Kumar Singh: Okay. Thank you. It was a good answer. Another question I have is, while doing our India business, you said that one of the growth drivers which you are actually seeing is large increase in prescription from the Indian market, especially the government-aided scheme from the government hospital and even the new beds which are getting added in our country. There is also an issue related to recently a lot of drugs being coming under NPPA radar. How that is going to affect our growth or our profit margin while doing business in India?
Yogesh Agrawal: No, soSome of these products that have come under the NLEM are only in oncology segment. Since we do not operate in that segment, it has zero impact on us whatsoever. We continue to operate in normal circumstances.
Aman Kumar Singh: Okay. Thank you. I think I got my answer. Thank you so much.
Operator: Thank you. Next question comes from the line of Harshal Patil with ASK Wealth Advisors. Please go ahead.
Harshal Patil: Thank you, sir, for the opportunity. I have just two questions, and these are more from an understanding perspective. One is, I just wanted to know, just continuing on to the earlier participant's point. While the oncology thing government has taken up, we do have cardiology with us, so that also is something which the hospitals would administer. Let us just build a case wherein something like this comes in.
Harshal Patil: If there is a case where we will also be impacted, maybe we will have to share something with the channel or maybe we will have to revise some prices. Any thoughts, any color if you can provide on this, that will be helpful.
Rajesh Agrawal: No, until we have a specific product list from the government and the specific pricing, till that time, it is not possible to do any working on this. So you would greatly appreciate. Otherwise, it will become too theoretical and
Harshal Patil: Correct
Yogesh Agrawal: there will be multiple.
Rajesh Agrawal: But there is no immediate threat, broadly speaking, in my view.
Harshal Patil: Correct.
Yogesh Agrawal: This is where we are. Yeah.
Harshal Patil: Right.
Yogesh Agrawal: We are not worried.
Harshal Patil: Okay. Okay. That's helpful that you're not very worried. That helps. Second thing is, sir, with respect to the in-licensing semaglutide thing you've done. Anand, just wanted your thoughts on when do you think really we would be seeing the numbers in the revenues? Since we are more centered towards the Africa and the MENA regions, what kind of potential should we see around? Any type of comments, maybe qualitative or something, would also be helpful, sir. I know this is more from a kind of long-term story, but I just wanted to understand it.
Yogesh Agrawal: I think any sales should start coming in in the next year, which is 2027, 2028.
Harshal Patil: Okay.
Yogesh Agrawal: As you know, it takes a lot of time for product registration in various countries. On an average, there's approval lead time around two years, and we've just started to file the last year. So it will trickle in, and since the arrangement is for a large number of countries, which includes small, medium, and large-sized countries, it will start to trickle in. It will not be like a one-product launch of a sizable in one country where you see the full-blown benefit in one go itself.
Yogesh Agrawal: So, it will have a trickle kind of impact. I think we shouldn't factor in too much whatever growth guidance that we keep giving every year. I think that will be including all this in-licensing bias also. That will be folded into the guidance that we are giving.
Harshal Patil: Okay. You are saying that whatever will be the potential, it will be more so included as a part of the guidance as and when it is shared. Is it?
Yogesh Agrawal: Yeah. Yeah. We will keep sharing. Every year, we share the guidance at the beginning of the year. So whenever we share the guidance, it will be encompassing this in-licensing also.
Harshal Patil: Sure. The point that I would be taking is, the lead time for approval is around two years, and we have just about started filing. So, just as a ballpark understanding, I can just have these points, right?
Yogesh Agrawal: Absolutely. You are absolutely right.
Harshal Patil: Perfect. Thank you, sir. That is it from my side, and all the best.
Yogesh Agrawal: Thank you.
Operator: Thank you. Next question comes from the line of Yasser Lakhani with Emkay. Please go ahead.
Yasser Lakhani: Hi. I would probably appreciate it if you could share some commentary on our MR productivity on the India business. Just to build on the India business, when you talk about new launches, what are the sort of portfolio gaps in our existing therapy areas that you feel you need to fill with these launches as well? Secondly, any addition do you believe over the next three to five years we will have to maybe diversify the therapy mix? Any comments on that would be helpful.
Rajesh Agrawal: On the productivity part, as I mentioned in the opening remarks, the H1 productivity stands at INR 4.5 lakhs, as against INR 3.7 lakhs for the entire financial year last year. We have gained substantially in the per man, per month productivity. That is where we stand. What else would you like to know?
Yasser Lakhani: On the existing sort of branded generic portfolio you have, where do you feel you need to, with these new launches, where do you need to sort of fill in those portfolio gaps in the existing therapy? Secondly, any therapies you would like to sort of get into over the next three to five years that we believe on?
Rajesh Agrawal: It is a continuous process within our company to be on top and ahead of the competition in terms of identifying new product opportunities and keep launching them. As and when we feel that it is a sizable market size and there is a gap area, then that is how we do it. We have a rich product pipeline for the remaining year as well as going forward. To answer the last part of your question on the new therapeutic areas, again, we keep evaluating.
Rajesh Agrawal: Last year, we entered into gynecology, which is gaining great momentum for us internally. In that sense, we keep identifying, looking for newer therapeutic areas, and as and when we have a great go-to-market strategy, we will enter those specialties.
Yasser Lakhani: Sure. Thanks for that. Lastly, on our emerging markets branded generic business, what would be our acute chronic mix? Do you even track that? That would be interesting to hear that.
Rajesh Agrawal: Yeah, I think
Yogesh Agrawal: Yeah, we track that, and I think it is quite healthy. We have a good acute chronic ratio. I think I don't have the figures right now, but maybe our investor relations can get in touch.
Yasser Lakhani: Sure. Thanks a lot. Wish your team a happy Diwali. Thanks.
Yogesh Agrawal: Thank you.
Operator: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question comes from the line of Foram Parekh with BOB Capital. Please go ahead.
Foram Parekh: Thank you for the opportunity. My first question is on the emerging markets of Africa and Asia. Sir, if you can give us some specifics, like you have said, we have added 100 people in the emerging market. So if you can give us the MR count separately for Asia and Africa, and the productivity as well.
Yogesh Agrawal: We do not share that granular details, so we just give the overall number. So emerging markets, last year we had 2,400 MR strength, and then we added around 100 people more, so we are at around 2,500.
Foram Parekh: Okay. How should we think about it? Is it equally distributed between Asia and Africa, or some larger part goes into which geography?
Yogesh Agrawal: As I said, we don't give out those details, so it will be difficult for me to comment on that.
Foram Parekh: Okay. If you can give us the productivity number?
Yogesh Agrawal: Productivity in emerging markets stands at around 8 lakhs and above. I think it is about 8 lakhs plus.
Foram Parekh: Okay. Okay. Sir, my second question is on the India business. We did venture into new therapies of nephrology, gynecology, and all. In that, you mentioned about gynecology picking up well. If you can give us some specifics, like how many doctors have we reached and how many MRs are being attributed towards the newer therapies?
Rajesh Agrawal: Again, we are not giving division-wise or specialty-wise MR split. However, if you still would like to kind of reach out to the investor relations team, we will be happy to kind of share whatever best that we can. Broadly speaking, both the specialties are progressing well for us, which is what matters the most. This is like a three to five-year progression that we are looking at. So it will have to continue to build for us.
Foram Parekh: Okay. And sir, my last question is on the US market. We have mentioned about five to seven filings to be done in the US. So if you can just help us, if there are any Para IV filings within this count?
Yogesh Agrawal: I believe no. I think there is no P4 filing.
Foram Parekh: Sure. That is all from my side. Thank you.
Operator: Thank you. A reminder to all the participants that you may press star and 1 to ask a question. Next question comes from the line of Yogesh Soni with Haitong Securities. Please go ahead.
Yogesh Soni: Thanks for the opportunity, sir. My first question is on the US business. Given that you have said that you might see some amount of competition coming in on the products, and the run rate for US would likely be lower in the H2, which would impact margin. Does that imply that our US business profitability is now in line with the corporate level? If you could clarify on this.
Yogesh Agrawal: We do not give out the geography-wise or business vertical-wise margins, but US remains to be healthy for the H1, considering we had some products which was a limited competition. I think we have a constraint in what details we can share, so we do not give out those. As a policy, we do not share those data or the territory-wise GCs or
Yogesh Soni: But, sir, we might have witnessed significant amount of improvement on the profitability front with regards to the US market. Is it so?
Yogesh Agrawal: Yeah, yeah, absolutely. That is what we have seen in the P&L also, with the 49% growth which we have posted on the US. That also shows it has flown down to the EBITDA PAT as well. We have posted a very healthy PAT of 49% growth.
Yogesh Soni: Okay. Sir, one more thing on the emerging markets, given the kind of investments that we have done in the last 2 years, whether it is with regards to adding of the field force or entering new geographies or the new product launches or new therapy areas, do we see that over the next 2 to 3 years, the kind of performance that we are looking to deliver in the emerging markets should be better than what we have previously done, at least in the last 5 years?
Yogesh Agrawal: No, if you see our last previous also, I mean, you leave out year-to-year variations, there are so many factors which go into the play. Like, current last year, it was purely a geopolitical issue. There was nothing related to Ajanta or pharmaceutical companies, and it impacted everyone. So our performance was largely driven by the external factors, most of the times, not so much by the internal things. In most geographies, if you see our Asia and Africa, I think last 3 years, if you see my average CAGR, I think we are doing around 13% to 15% CAGR.
Yogesh Agrawal: We are optimistic that I think Ajanta story is not a quarter story. Ajanta story is not 2-quarter story. It is not 1-year story. It has to be seen in a 3-years horizon and plus.We could have a quarter where the sales are slightly depressed, next quarter elevated, but if you see average over year over year, 3 years trajectory, we have been able to post a good growth. So we remain optimistic. We feel that emerging markets, we have all the growth drivers in place, so we should continue to post good growth.
Yogesh Soni: Okay. Thank you, sir. That's it from my side.
Yogesh Agrawal: Yeah.
Operator: Thank you. Next question comes from the line of Harshal Patil with ASK Wealth Advisors. Please go ahead.
Harshal Patil: Thanks for the follow-up, sir. Sir, just one thing wanted to understand. This is for the India business. We've got our four therapy lines, which are kind of accounting for a major chunk of the growth in India. Recently, the two new have been added. As we've got, we've guided for a mid-teens kind of a growth in 2027.
Harshal Patil: Maybe, is there any comment that you could give as to any specific therapy that would sustain a stronger growth or probably susceptible to some weaknesses or something like that for FY2027? Going ahead over a larger period for 2028 or something, should we assume on a covered market basis, we'll be ahead of the IPM and something like that? If you can share.
Rajesh Agrawal: I will restrict my comments to the current year. If you would have already seen, in the first half or maybe the MAT basis, we are growing much faster than the IPM growth rates in each specialty.
Harshal Patil: Right.
Rajesh Agrawal: So, whether it was ophthal, even though Ajanta is the number one ranked company in ophthalmology, including derma as well as pain. Cardiovascular, we are almost par or just marginally better. So, we are doing well. So it is with gynecology and nephro. However, the base remains very small, so the growth really is not worth talking about. Next year, I think we will come to that maybe in Q4 when we look at the guidance for the FY2028. But so far, current year, we are okay. We will be able to maintain these growth rates hopefully.
Harshal Patil: Okay. That is helpful, sir. Thank you.
Operator: Thank you. A reminder to all the participants, kindly mark the star one to answer question. Next question comes from the line of Foram Parekh with BOB Capital. Please go ahead.
Foram Parekh: Thank you for the follow-up. Sir, if you can just help us with the constant currency growth for the US market.
Yogesh Agrawal: Constant currency growth is about 30% and high. I think it is in the range about 30% to 35%. For the H1 is about 35% odd. For the Q2 is, I think, about between 30% and 35%.
Foram Parekh: Okay. And sir, if you can help us with the CC growth for Asia and Africa as well.
Yogesh Agrawal: I think I do not have those figures right now with me, but you can consider about 4% to 5% is the currency exchange gain which we have seen in the entire export business, whether it is Asia, Africa, or US. It could be slightly higher also. I think about there.
Foram Parekh: Sure. That is helpful. That is it from my side.
Yogesh Agrawal: Sure.
Operator: Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I now hand the conference over to Mr. Yogesh Agrawal for closing comments.
Yogesh Agrawal: Thank you, everyone, for joining us today. In case you have any further questions that remain unanswered, please feel free to reach out to our investor relations team. Thank you.
Operator: Thank you. On behalf of Ajanta Pharma, that concludes this conference. Thank you for joining us. You may now disconnect your line.
