Operator: 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. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Sudhir Menon, Executive Director of Finance and CFO. Thank you, and over to you, sir.
Sudhir Menon: Thank you. Good evening, and welcome to Q2 FY 2027 earnings call of Torrent Pharma. Consolidated revenues for Q2 were INR 4,979 crores, up by 51%, while operating EBITDA at INR 1,666 crores was up by 54%. Operating EBITDA margin for the quarter stood at 33.5%. During the quarter, R&D spend increased to 4.2% of the revenue compared to 3.5% in the previous quarter. As highlighted in the previous call, following the merger of JB with Torrent Pharma, with effect from 8 July, 2026, we had undertaken business-level integration during this quarter. As guided earlier, there was some transient impact on JB business top-line performance during the quarter. During the quarter, the underlying JB business reported revenues of INR 1,086, which was largely flat year-on-year. JB India branded business grew at 7% for the quarter. International business were down by 7%.
Sudhir Menon: Torrent-based business continued its strong growth momentum, with revenues growing 18% for the quarter. The base India business with 20% growth continued to outperform IPM, while Brazil revenues were up 38%. On the generic side, US delivered strong 24% growth while Germany revenues were down by 7%. The overall leverage, that is net debt to EBITDA, now stands at 1.8x. I will now hand over the call to Aman for an update on India business.
Aman Mehta: Thanks, Sudhir. I will first talk about the JB integration update. Post the completion of merger in July 2026, we had initiated the next stage of integration activities, which involved merging of divisions and field force in the India business. We believe this has been executed well and as per expectations. Despite the nature of integration activities, the India business of JB delivered robust underlying growth, which provides comfort in the long-term growth prospects of the business post-recovery. JB's international operations saw an impact from, again, the integration around plant network optimization and alignment of manufacturing and quality control systems. This led to postponement of deliveries in certain markets, and we see a gradual path to recovery in the subsequent quarters. We believe the impact is transient due to one-time nature of integration requirements, which were unavoidable.
Aman Mehta: The objective here was to harmonize Torrent and JB systems, reduce redundancies, and enable long-term utilization and gross margin efficiencies. On overall cost synergies, we are tracking well ahead of our plan, which can also be seen from the EBITDA margins during this quarter. Sequentially, the JB business EBITDA margins have improved despite the transient impact on sales. Moving on to the base business, Torrent's India revenues for Q2 were INR 2,181 crores, registering a growth of 20% versus the IPM growth of 12%, as per the Pharmarack dataset. 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 Curatio business continued its strong growth trajectory, growing at 34% in Q2 and also in H1, driven by OTC ad spends and field force expansion.
Aman Mehta: We are hopeful that this business should continue with a similar high growth trajectory for the rest of the year. Our combined field force strength at the end of Q2 for Torrent plus JB, the combined entity, is now 9,100 in the India business. On semaglutide, our India franchise recorded Q2 market share of 32% for the oral and injectable combined, as per the Pharmarack dataset. For the oral segment, we continue to maintain more than 90% share within the generic players. In the injectable semaglutide segment, following the supply disruption, we were able to onboard a new manufacturing partner and fully restored market supplies by September. Due to being out of the market for nearly two months, we did see some minor market share loss in the injectable space.
Aman Mehta: However, the September month relaunch and sales recovery provide confidence that a large part of this loss should be recovered in the coming months. Our focus during H2 FY 2027 will be to continue improving our market share in focused therapies, improving field force productivity in expanded divisions, and continuing the scale-up of the Curatio business. I will now hand over to Mr. Sanjay Gupta for the international business.
Sanjay Gupta: Thanks, Aman. We will start with the branded generics market of Brazil. Based on internal sales, Q2 constant currency revenues were at BRL 436 million, registering a 21% year-on-year growth. IQVIA data shows Q2 market growth at 5.7%, with Torrent growing at 26%. This is aided by the strong performance of our top brands, our recent launches, as well as the strong growth in the generics division. In Brazil, Torrent has a rich pipeline of 53 molecules under Anvisa review, and we expect approval in the next three years. In the US, we registered constant currency revenues of $44 million, up by 13%. Growth is coming from our new launches where we have achieved or exceeded our target market share.
Sanjay Gupta: In Germany, our business registered a constant currency revenue of EUR 26 million, down by 13%. The growth continues to be impacted by the loss of high-value tenders and disruption at third-party suppliers. With that, I would like to conclude the opening comments and open the call up for questions.
Operator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. 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 is from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria: Yeah, thanks for taking my question. My first question is on JB. Given the disruption of the impact on growth because of disruption, if you could give us some color in terms of how we should think about the recovery, both in the India business. Also, I think you mentioned some postponement of supplies in certain markets. Would that take slightly longer to recover? Just wondering, the flat growth that we have seen, should we continue to see similar trends in the near term, or we start seeing improvement here?
Aman Mehta: On the India side, we had guided in the earlier quarter that this would be the kind of impact that would be estimated. It has been pretty much in line with how Q1 was at 13%, Q2 was at 7%. So it is more or less been as expected, and we think this will recover gradually quarter on quarter from here. If H1 is at 10% growth for the India branded business, I would expect that H2 should be perhaps higher than that.
Aman Mehta: On the international front, yes, there are definitely some one-time challenges that we faced, and it was part of the integration that we have taken a call to take these decisions. These are all one time in nature. So while the actions have been taken, the recovery may take slightly longer in the international business. But overall, we still feel that in H2, the overall JV growth should be double digit. While India would be higher than double digit, we believe the total JV business growth should recover to double digit in H2.
Neha Manpuria: Okay. That is good to know. My second question is, you mentioned cost synergies are running ahead of expectation. I think our estimate was about INR 450 crore. It seems like pretty much half of that is already reflected in margins. Would that be a fair assumption? Given that, Sudhir, is there an upside to our cost synergy number that we are expecting over the next 3 years?
Aman Mehta: Neha, I think you are right when you say we are tracking higher than what we had initially guided, and possibly when you say half of that seems to getting realized in this year, I think it is fair to assume that. Having said that, we believe most of it could come through by the next year.
Neha Manpuria: Therefore, do you see upside from a 3-year perspective? Some of the synergies that you were thinking probably will take up later, probably on the revenue side, et cetera, does that come forward or revenue synergies will still take some more time outside of the cost?
Aman Mehta: No, I would think we will maintain the current synergy view on INR 450 crores. Perhaps next year, if there is a more concrete reason to believe there is further upside, we can comment, say by Q1, Q2 next year. Revenue synergies will continue to be, or rather, we believe they should be on track for next year as well on the India business first and then followed by the international.
Neha Manpuria: Okay. That is helpful. Thank you so much.
Operator: Thank you. Next question is from the line of Damayanti Kerai from HSBC. Please go ahead.
Damayanti Kerai: Hi. Thank you for the opportunity. My question is again on JB. You mentioned sequentially, despite the transient impact on the business, it reported higher EBITDA margins. Just wanted to understand what has led that sequential improvement, whether it was more on, say, the gross margin part, or it was more on rationalization of other operating expenses. How should we look at the JB EBITDA margin in coming quarters? That is my first question.
Aman Mehta: I would say large part of it was driven from the field force merger that has taken place. The savings are realized now, though the actions were taken from January. After the merger also, there were further steps taken. It is largely driven from the India field force divisional merger that has been implemented. Also, there has been further improvement in procurement savings as well. But that is a small part of it, overall sequential improvement. From Q1 to Q2, the biggest component is the field force savings.
Damayanti Kerai: Got it. How should we look at the margin trajectory for JB in H2 of this year?
Aman Mehta: I would say it should continue gradual improvement from here as well. Difficult to give an exact number, but directionally, it has already improved substantially from Q4 last year to Q1, and now from Q1 to Q2, it has been more gradual. I would expect quarter on quarter, this same run rate of improvement can continue maybe for the next two, three quarters.
Damayanti Kerai: Sure. My second question is clarity on your MR headcount after the merger. You mentioned 9,100. Whether this is a level which we are looking to maintain or there is some more room to optimize this number further. Where do you like to have your MR count in optimum situation?
Aman Mehta: Yes. This year it will be maintained. By the end of this financial year, we do not expect any change. We will review this maybe in a couple of months. We expect potentially some expansion may be required in the base business, say maybe by 500 MRs or so. But we are not fully certain on what the next year's picture looks like. But it could be, say, something between 9,500 to 9,600.
Damayanti Kerai: Got it. My last question is on your overall guidance, which you mentioned, 33.5 kind of number we are doing. Should we assume there is more room to improve from current level or it will be more steady, considering all the synergies et cetera, which will come from the merger part?
Aman Mehta: I think there should be a gradual increase in the EBITDA margin. But I think we are not guiding on the number part. But at least definitely we feel H2 should be little higher than 33.5.
Damayanti Kerai: Got it. Thank you. That is helpful. I will get back in the queue.
Operator: Thank you. Next question is from the line of Dr. Kunal Dhamesha from Macquarie Capital. Please go ahead.
Kunal Dhamesha: Hi. Thank you for taking my question. First one on the JB EBITDA margin, which we suggested that there will be continued improvement from here as well for the next two, three quarters. So once that is done, would it be fair to say that JB's India business profitability would be very similar to Torrent's India business?
Aman Mehta: Yes, that could be fair to assume. Torrent's India-based business versus JB-based business. Yeah, that's correct.
Kunal Dhamesha: Sure. On JB EBITDA margin this quarter, could you quantify the improvement on a sequential basis?
Aman Mehta: No, that is something which we are not guiding for.
Kunal Dhamesha: Okay. Would it be meaningful, like 100 basis point plus or?
Aman Mehta: See, I think there are two data points which I can give. One data point which I can give you, right? I mean, what we have said is the R&D expenses versus Q1 has gone up by 0.7%. Q1 EBITDA margin was 33.8%, and this time it is 33.5%. That is one data point which I would like to give you. Having said, the increase in R&D which has come in Q2, we believe it will continue for the rest of the quarters as well.
Kunal Dhamesha: Sure. Thanks for that. Lastly, on the synergies part, cost synergies or initial guidance will be realized by INR 580 crore is what my understanding is, what you commented. If I am wrong, please correct me. Without quantifying, beyond next year, what are some of the levers that you would have identified which is not part of your INR 450 crore guidance? Secondly, you suggested the revenue synergies part for the next year. If you could quantify the impact of the revenue synergies and some of the levers.
Aman Mehta: Nothing incrementally new in terms of buckets that have been identified for cost synergies. Perhaps it is more of a quantum of costs that were estimated before and after, where there may be some variation. That is where we feel it is still premature to comment whether there is any higher scope of cost synergies compared to the INR 450 crore number. But directionally, yes, we have been able to achieve that much faster. Instead of 3 years, I think we should be able to get there in 2 years' time. Any upside to that, I think we would wait for at least a couple more quarters. On the revenue synergy side, again, the same view.
Aman Mehta: We believe that the India business, now that the large part of the integration is done, the revenue synergy should start gradually coming through from cross-selling from new territories where JB brands are added to Torrent divisions and so on. These things normally take 6 to 12 months depending on the brand and the competitive intensity. I think next year should see a reasonable improvement in the top line growth through revenue synergies.
Aman Mehta: Difficult to quantify at this stage, but if things go as per plan and as we expect them, then I think gradually year on year, there should be acceleration in top line growth in the India business. On the international side, it will be a slightly longer journey for that to get achieved because the product filings take slightly longer in most markets that we are looking at. If say we are looking at JB territories to add some existing products that we have, those would take, say, 2 to 3 years to materialize. That is why the timeline may be longer.
Kunal Dhamesha: That is extremely helpful. Thank you, and all the best.
Operator: Thank you. Ladies and gentlemen, before we take the next question, a reminder to all the participants, anyone who wishes to ask a question, may press star and one. We will take our next question from the line of Binu from Elara Capital. Please go ahead.
Bino Pathiparampil: Deal that JB Chem has done with Novartis on the ophthalmology franchise. This was done, I think, about a couple of years back.
Operator: I am so sorry to interrupt, Mr. Binu.
Bino Pathiparampil: Hello.
Operator: Can you repeat your question, please?
Bino Pathiparampil: Hello. Can you hear me well now?
Operator: Yeah, we can hear you now. Please go ahead.
Bino Pathiparampil: Okay. Just a question on the ophthalmology portfolio deal that JB Chem had done with Novartis a couple of years back. Is there any risk to that deal given the changes happening in Novartis India?
Aman Mehta: No, the contract is quite clear. I doubt there will be that possibility.
Bino Pathiparampil: Okay. If I remember correctly, there is a second tranche of payment of about INR 950, INR 960 crores that is pending. Would that be due anytime soon?
Aman Mehta: That would be in December of this year. Yes, that's right.
Bino Pathiparampil: Okay. Okay, great. Thank you.
Operator: Thank you. Next question is from the line of Nithin Agarwal from DAM Capital. Please go ahead.
Nitin Agarwal: Thanks for taking my question, sir. On the increased R&D spends, you said this is going to be sustainable from here on at these levels. Any new avenues where we are looking to invest larger amounts than before from a priority perspective?
Aman Mehta: No, this is in line with what we had shared earlier that we are looking at increasing our filings in the US, which are very low single digits right now to maybe high single digits for some years to recover some of the lost time in the last couple of years due to our operational issues. In that sense, it is more of a temporary spend that would be required for a couple of years, 2 to 3 years. But in percentage spends right now this quarter is about 4.2% of revenues. We believe that the range should not exceed, say, between 4% to 4.5% even in the following year.
Nitin Agarwal: Got it. Secondly, on the export business, Brazil's business has done well. Germany still struggled. Any more color that you want to provide us in terms of the outlook for these two markets?
Aman Mehta: Brazil, we are optimistic it will continue to grow double-digit mid-teens or in that range because we have strong momentum from our new launches as well as from our other businesses. We have four business units in Brazil, cardio and diabetes, CNS, generics, and non-retail. All four business units seem to be doing well. Again, a high level of optimism on Brazil. On Germany, I would say that we are struggling because there has been quite a lot of factors which have impacted us from supply-related issues to government-mandated price decreases, which have severely impacted our non-retail business. I really cannot give guidance today. Best case, I would say a slight decline in the coming quarters and eventually some stability after maybe 3 or 4 quarters.
Nitin Agarwal: Okay. On the other markets, so the ROW markets or the non-Brazilian branded markets, any broad color on how last 3, 4 quarters, any meaningful changes in the size, scale of business and maybe these businesses?
Aman Mehta: Yeah. The rest of the world markets for us are examples are Philippines, Mexico, Russia, South Africa now. All these markets are growing high single digits or double digits. Underlying business is pretty strong in the ROW markets. Let us say conservatively you can take 6% to 9% growth, not JV total.
Nitin Agarwal: Lastly on any color around the GLP-1 sema launches in Brazil, where are we in terms of what the timeline is, our outlook on approvals and launches?
Aman Mehta: There is one true generic launch in Brazil, which is by a local very large player. It has been three months since they have launched. They have activated the go-to-market. Optimistically, we expect to launch in the next six to nine months.
Nitin Agarwal: Thank you so much.
Operator: Thank you. Next question is from the line of Saion Mukherjee from Nomura. Please go ahead.
Saion Mukherjee: Yeah. Thank you for taking my question. Can you share how large Curatio is now as part of your domestic business? Because it has been growing pretty rapidly since you have acquired. Can you give some color and how should we think about the growth here, given all the initiatives going ahead, please?
Aman Mehta: I think this should be now between, say, 7% to 8% of the total base India business without JB. When we acquired it was about, I think, 4% to 5% contribution. So the contribution of the Curatio portfolio has increased quite a bit in the last 2, 3 years. From where things are and the kind of strength that the brands have developed over the last couple of years through the additional marketing impetus, I think it should be possible to sustain high growth for at least a couple of years. Difficult to say what range, but whether 30% growth can be sustained beyond, say, 3 to 5 years, that is difficult to say. But definitely it seems that this is a trend, which is the demand is real, and the trend is likely to continue for the foreseeable future.
Saion Mukherjee: Great. Thank you. My other question was on the US. We have seen some improvement with new product launches. How do you see the outlook? I think last time you mentioned there are not many large high-value launches. If you can just update on that for this year and next year, please. Any comment you would like to make on pricing environment, market dynamics in general.
Aman Mehta: On the second part of your question, no major change in US market dynamics. They continue as before. We have had a few good launches in the US. Our market share, as you can consult in IQVIA, are actually above our expectations. So which is why we are showing high rates of growth. The good part is that our filings are so far improved in the US. Year-to-date, we filed already 4 products, and we think we can file 4 to 5 at least more before this fiscal year ends. So there is optimism in terms of new product launches. I cannot give you color on the scale of these new launches. It will depend upon the number of competitors when these come to market, but they would keep up the momentum of new product launches, which is the most important factor for US growth.
Aman Mehta: I expect some new competitors on our recent launches in H2. So there would be a pricing pressure increase in H2, which is not atypical in the US market, right? There is always new people coming with existing molecules, and this leads to price erosion. But price erosion accompanied by volume growth and new launches should keep us in the positive territory as far as growth is concerned.
Saion Mukherjee: Right. Thank you very much.
Operator: Thank you. Next question is from the line of Tushar Manudhane from Motilal Oswal Financial Services Limited. Please go ahead.
Tushar Manudhane: Sir, thanks for the opportunity. Sir, firstly, on semaglutide industry outlook, how do you see the growth in this molecule at industry level?
Aman Mehta: Well, I think it has been stabilized now, the demand levels of generic semaglutide. What I recall is that we had estimated a market size of generic sema at somewhere around INR 800 crore for the first year. So it seems that it is on track to get there. And after that, it should be in line with some of the earlier new launches, how they have grown, which is a very high growth in the first couple of years of the market, followed by stabilization in, say, third or fourth year.
Aman Mehta: If you just take the past reference of, say, sitagliptin, where there is a shift happening from, say, an earlier gen molecule to something new, which is what we expect to happen here as well. So it is again, still very early to say what the market size may appear to be in four to five years' time. But there is definitely a lot more room for market expansion from here as well.
Tushar Manudhane: So even if it grows, let us say by 25%, let us say next year it is INR 1,000, and then grow further lowering down. So broadly INR 2,000, INR 2,500 crore market is what you are expecting over next three to four years. Is that right in sense?
Aman Mehta: Yeah, that should be possible. At least three to five years, that number is not out of range.
Tushar Manudhane: Secondly, on the India industry itself, the IPM growth has been on uptrend even inside USID. PSA related base effect of the past year. How do you read this industry growth, and what do you think the growth would be for, let us say, next 12 to 15 months at the industry level?
Aman Mehta: Definitely the H1 this year has been far higher market growth than what we have seen in the couple of preceding years. 12% is the market growth this year so far. We think this market growth is likely to sustain for the rest of the year. Perhaps from next year, it may drop a little bit, say 1%, 2%, but minimum 10% is what we think should continue from here on as well, at least for the next financial year. This year may be potentially a one-off case, an increase in IPM growth to this extent, but below 10% is, in our view, not looking likely at this stage.
Tushar Manudhane: This is relatively much better compared to earlier years. Any factors you would like to call out, which would drive this higher growth for the industry?
Aman Mehta: I think it is very difficult to pinpoint still. In our case, there are multiple factors that are also contributing to our growth, like sema launch and field force expansion. A large part of our growth difference can be explained through those, but what is causing the higher, say, 2%, 3% market delta is still difficult to pinpoint exactly.
Tushar Manudhane: Okay. Thirdly, just on Brazil, how much of the growth in the Q2 would have come from new launches and how much from existing brands, that drove that growth of 20%?
Aman Mehta: Correct. So broadly speaking, it is one-third, one-third, one-third. One-third on price, one-third on volume, and one-third on new launches.
Tushar Manudhane: Got it. Lastly, any new products that have been launched in the OTC segment and you see the scale-up happening the way we have seen for Shelcal?
Aman Mehta: Yeah, there are many brand extensions launched in the OTC space, which are, I would say, reasonable in size. They are not very big, but the idea is to launch multiple of these where they can create a sizable base in two, three years. Those are always part of our new product planning part of the OTC business. Has there been any completely new product launch that which is not an extension? Probably not in the last six to eight months. I believe these are spaces where entering completely new is very challenging, so we do keep a lookout for acquisitions wherever possible to bolt onto our OTC platform.
Tushar Manudhane: Got it. Lastly, if I may, with respect to the marketing expense within India for OTC and for prescription, any broad breakdown you could give either as a percentage of total spend or absolute, whichever is convenient.
Aman Mehta: No, Tushar, we don't have the numbers separately.
Tushar Manudhane: Okay, sir. That's it from me, sir. Thanks a lot.
Operator: Thank you. Next question is from the line of BaNiharika Agarwal from Nirmalng. Please go ahead.
Niharika Agarwal: Hello. Thank you for the opportunity. I wanted to understand about the 13% constant currency growth we saw in the US. How much of this growth is coming from products with durable competitive advantage versus products where price erosion could accelerate as competition enters?
Aman Mehta: Unfortunately, I do not know how to answer that question because in the off-patent business, there is no such thing as a durable competitive advantage. It really depends upon the number of competitors and how quickly they come to market. New customers are very finite, right? Because we operate in the retail channel with three customers or four customers accounting for 90% of the market. Any new player has to call upon the same customers, and usually the way to penetrate is to offer a better price. Hence, I would say that I am not sure how to tell you what is a durable competitive advantage generic product in the US. However,
Niharika Agarwal: Got it.
Aman Mehta: That said, we are constantly working on improving our costs. That is one way in which we are able to maintain a base business. Our base business generally has been flat. The growth is coming from new products, but our base business, the price and the volume, et cetera, kind of neutralize each other. I would say it is a decent result for mature products.
Niharika Agarwal: Could we see this growth rate sustaining going forward or, as the launches normalize, we will see some moderation?
Aman Mehta: We have new launches planned, but again, when we forecast new launches revenue, we build scenarios based on the number of competitors. Honestly, before we launch, we are not 100% sure as to how many people will show up at the opening. What I said earlier in the call is that we so far year to date already filed four products in the US, and then we think we can file at least four to five more for the remaining of this fiscal year. These, let's say, 9, 10 products would be higher than what we have filed in several previous years. Hence, this kind of gives me a positive optimism for future growth.
Niharika Agarwal: Okay, thank you. Just one quick question on sema. As the competition is increasing, what matters more for your economics? Will we focus more towards defending our market share, or will we focus on maintaining realization per patient? On the share as well, can we expect to sustain the share even as profitability per unit declines?
Aman Mehta: This is assuming about the India business. We have launched sema only in India so far. Our objective would be to endeavor to expand the market as much as possible. That would also mean that we would need to defend our share at the same time. I think we are seeing good traction there on that front in the last couple of months. I do not think there will be any change in pricing per patient or pricing per product because these are all branded businesses, so there is no real price erosion in that sense. In fact, the price would only be stable or gradually increase over the next couple of years.
Niharika Agarwal: Okay, thank you. Just one last question on the Brazil business. We have approximately 53 products, right, that are waiting Anvisa approval. How meaningful could these launches be to growth over the next two years per se, and what kind of growth can we expect for this geography? Any rough number?
Aman Mehta: Yeah, I think that it should be at least superior to 10%, probably to 15% growth in the coming years.
Niharika Agarwal: Okay. What is the key constraint for this geography? Would you say approval timelines or commercial execution? What is the key challenge over here?
Aman Mehta: I would say both, because approval timelines with Anvisa are taking at least two years, so that's a long process. Then in terms of commercial challenges, of course, we are competing with at least a very strong local company who are entrenched in the Brazilian market with a much larger people's footprint than we have. There also has started to be a trend in the last two, three years about price competition, which was historically quite benign, but it has become much more, I would say, aggressive and competitive in the last two, three years.
Niharika Agarwal: Okay. Makes sense. Okay. Thank you for giving me the opportunity. This is all from me.
Operator: Thank you. Next question is from the line of Madhav Marda from MLC. Please go ahead.
Madhav Marda: Hi, good evening. I just had one question. For our combined business, including India Torrent base business and JB Chemicals, could you give any outlook on the EBITDA margin over the next maybe two to three years? Given JB has the ophthalmology portfolio, cadence, et cetera, lined up. If you could just share on the businesses and including JB, how that could play. Thank you.
Aman Mehta: As a policy, we do not share geography-wise EBITDA.
Madhav Marda: No, just combined business. Any outlook on the EBITDA margins from 33.5%, how that could track over the next two, three years?
Aman Mehta: That is what I called out earlier, that Q2 33.5. For rest of the two quarters, it can improve a little bit for this year.
Madhav Marda: Okay. Over FY28 and 2029, is there any outlook? Do you see any improvement measures lined up?
Aman Mehta: No, we are not giving any guidance for FY28.
Madhav Marda: Okay.
Aman Mehta: We are just waiting for the full-year base to come in, then probably next year, Q1, we will guide it.
Madhav Marda: Got it. Okay. Thank you.
Operator: Thank you. Next question is from the line of Dr. Kunal Dhamesha from Macquarie Capital. Please go ahead.
Kunal Dhamesha: Hi, thank you for the follow-up. On JB's international business disruption, could you localize in which segment the disruption was maximum? Was it ROW? Was it US? Was it CDMO?
Aman Mehta: JB international business, I would say the disruption, if I was to say, it was across the board because it was linked to issues which are not particular or peculiar to any one geography. It was linked to issues like software integration, accounting integration, merger of the companies, change of processes. Then you will also recall, we had some quality issues linked to one product in the US for which we had a recall. So it was, I would say, outside of the US recall, it was generalized across geographies. I won't point the finger towards one more than the other. We're talking about back-office issues. We're not talking about front office or customer-facing issues.
Kunal Dhamesha: Sure. Thank you. Second question on, while you have given out some outlook on Indian pharma market that the strong growth would continue. What has caused the sudden spike? Let's say if I look at GLP-1s, I think the impact would probably not be more than 100 basis points in terms of growth acceleration. Right? Is it a shift from market share shift happening, some of the smaller companies which were earlier operating, they are not operating anymore, or the focus from other players on trade generic has gone down or general should be there is less friction. What is driving this sudden spike?
Aman Mehta: That is exactly the question that was asked earlier, but we are not too sure on how to pinpoint or break up the spike in IPM growth by, say, this 2%, 3% difference in this year. It could be a factor of all of these, as you mentioned. But one indication at least that we have is that our trade generic business has not really slowed down materially. So our business is pretty small right now.
Aman Mehta: But if that was some indication, we would have got a sense through that. So it is not really the trade generic that is slowing down and shifting to brand either. It seems that both segments are growing. But again, because there are so many factors at play, it is difficult to pinpoint. What we did mention is that we believe perhaps it may not be able to continue next year, but certainly our view is that it should not go below double digits, the IPM growth.
Kunal Dhamesha: Sure. Thank you, and all the best.
Operator: Thank you. Ladies and gentlemen, as there are no further questions from the participants, I would now like to hand it back to the management for closing comments.
Aman Mehta: Thank you for participating today. With that, we conclude today's call. Thank you.
Operator: Thank you very much. On behalf of Torrent Pharma Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.
