The US revenue was well within the guided range. How much was Spiriva‘s contribution into it and also was it just the flu season that really helped the growth or there is some fundamental recovery at play as well?
Vinita Gupta: Yes, I will just add to that that given the recent launches, Spiriva in particular, your question around market share ramping up pretty well. The last few weeks substitution has ramped up to 30% level. So, I am very optimistic about the product building, both in units as well as revenues in the months and quarters to come. And then added to that, the other product launches, the ophthalmic products, we just launched Prolensa. We have four or five other ophthalmic product launches over the next 12 months. Injectable product launches starting this quarter. We have six injectable product launches. We feel fairly confident of growing our US business into the next fiscal year.
Given the US outlook, would you like to make any changes to the guided dollar revenue run rate of 200 to 215 million?
Vinita Gupta: I would say it will be $200 million plus and on a year over year basis we would expect a single digit growth based on the fact that while we ramp up Spiriva, we are going to see some pressure on products like Suprep that have additional competition coming in. So, we would like to really get to the double digit growth level, which hopefully can happen with some of the products that we are litigating. Right now, there are two or three products, material ones that are under patent litigation that will give us upside opportunities into next year.
You were just talking about the new launches planned in the US markets. Tell us more on that and also, which therapies exactly will they cater to, how big revenue opportunities do you see from those new launches?
Vinita Gupta: The material ones are products like Mirabegron and Slynd, two that we are in active litigation with in the next couple of weeks. So, by March-April we should be in a better position to be able to determine when we can launch them based on the patent litigation outcomes.
The India business growth was very strong as well. What has changed here and does this look sustainable?
Nilesh Gupta: I think it was under the works for a while. So, I think we are just coming to our own in India. We would want to replicate this growth. I think it is a function of the investment that we are making in the market. So, I think we have added close to 1,300 representatives, seven divisions that we have added in the last nine months, 21 new products. Doing very well on new product introductions as well. But, I think clearly as a strategy doubling down on India and we would expect this kind of growth to continue.
Your margin guidance was at 20 to 22 odd percent. Would you do that now?
Ramesh Swaminathan: No, as you can very well see, pivoting to complex products has really helped us in the US and the EU and the like and there is, of course, secular growth across various markets. Gross margins are up, thanks to the sales mix and the like. And, of course, our cost-led initiatives are paying off big time for us. But you would also recognise that there are several moving parts.
Whilst there are a lot of reasons to be optimistic, given our recent trajectory, we would like to take a conservative view. There are positives, as I said, in terms of the portfolio sticking, in terms of the input cost tailwinds, in terms of the productivity, buoyancy across markets and the like. But there are also negatives in terms of Red Sea-led possible disruptions, freight costs and the like and so on. So, I think, maintaining the levels around the 19.5, 20.5 percentage points would be pretty good at this stage. We would like to take it on a quarter-on-quarter basis that way.
The net debt has come down. Any plans to become debt-free or is that the direction you would move into?
Ramesh Swaminathan: As you can see, there is, of course, accruals because of the operating profits itself and we have used that to kind of repay the debts. But having said that, the position right now and the working capital has been optimised tremendously, what used to be about 103, 105 working days has come down to about 96 levels and this is a huge come down from what it was even a year ago.
This optimisation is continuing. And all of this translates to more cash for potential usage, which we use obviously to repay the debts itself. It is around 1,000 crores is what our debt level right now is and we would be virtually debt-free by the end of this quarter or the like. But having said that, it really is a function of, in fact, acquisitions and the like as well. And we are a tremendously acquisitive company. So, it really is going to be dependent on that.
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