Alembic Pharmaceuticals Ltd
NSE:APLLTD
Alembic Pharmaceuticals Ltd
NSE:APLLTD
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Ladies and gentlemen, good day, and welcome to the Alembic Pharmaceuticals Limited Q4 and Annual FY '22 Financial Results. From the management, we have with us, Mr. Pranav Amin, Managing Director; Mr. Shaunak Amin, Managing Director; Mr. R.K. Baheti, Director, Finance and CFO; Mr. Mitanshu Shah, Head Finance; Mr. Jesal Shah, Head Strategy; and Mr. Ajay Kumar Desai, Senior VP Finance. [Operator Instructions] Please note, this conference is being recorded.
I now hand the conference over to Mr. R.K. Baheti, Director Finance and CFO. Thank you. And over to you, sir.
Thank you everyone for joining this conference call where we are presenting our Q4 FY -- Q4 annual results for FY '22. I'm sure most of you have received our results. But let me briefly take you through the financial numbers.
Operationally, Q4 was a good quarter for us. Both India business and U.S. generic verticals performed well. And Shaunak and Pranav will be talking about it in detail in their presentations. During the quarter, our total revenue is up by 11% to INR 1,416 crores, EBITDA was INR 164 crores, profit before tax and profit after tax is down to INR 34 crores and INR 35 crores, respectively, just because of onetime nonrecurring expense charged by Aleor. Had Aleor followed the previous year practice, APLs consolidated profit before tax would have been higher by INR 188 crores at INR 222 crores, and net profit after tax would have been higher by INR 145 crores at INR 180 crores.
EBITDA on a likewise basis would have been INR 286 crores, which is 20% of sales. EPS for the quarter is INR [ 1.80 ] per share for the quarter. It would have been INR 9.16 on likewise basis versus INR 12.75 in the corresponding quarter in the previous year. During the full year '22, our total revenue was INR 5,306 crores, EBITDA was INR 955 crores, which is 18% of sales. Profit before tax and profit after tax was INR 650 crores and INR 546 crores, respectively. EBITDA likewise would have been INR 1,078 crores, which was 30% of sales. EPS for full year was INR 37.76 per share, INR 35.11 on likewise basis versus INR 60.81 in the corresponding financial year 2021. The company declared a dividend of INR 10 per share, that is 500%, corresponding to INR 14 per share or 700% in the previous year.
As you are aware, the company acquired from Orbicular Pharmaceutical, a joint venture partner in Aleor Dermaceuticals, the balance 40% stake in Aleor. Pursuant to share acquisition, Aleor becomes a wholly owned subsidiary of the company.
Looking at the current market situations in the U.S. generics business, Aleor, the wholly owned subsidiary of the company, carried out a detailed review of its [ internal structure ] of R&D expenses -- R&D development expenses and decided to expense out and reduce INR 188 crores in the current quarter [ last year ]. The breakup of the INR 188 crores is the charge of INR 65 crores in higher amortization expenses and the balance in various debts of R&D expenses that is employee benefits, material costs and other expenses.
Borrowings, the gross borrowing at consolidated revenue is INR 630 crores versus INR 500 crores in March 2021, and the company has INR 61 crores in cash on hand versus INR 285 crores in March '21. Net debt to equity stands at 0.11.
I will now hand over the presentation to Pranav for his presentation of international business.
Thank you, Mr. Baheti. The U.S. business witnessed a good quarter with sales at 75 million. This is due to a couple of reasons, such as increased market share in some products as well as some onetime opportunities and some destocking of the distributor pipeline. It gives us confidence in the business moving forward. We also launched our first inhalation product in the U.S. market Formoterol in April. We continue to remain focused on the long term of the U.S. business backed by 15-plus launches in the next year in FY '23 and consolidating market share in existing products as well.
As Mr. Baheti mentioned, Aleor is now a wholly owned subsidiary of APL. We will get full control of strategy, operations and marketing of the entire dermaceutical portfolio, resulting into efficiencies and improvement in overall business outlook. Ex-U.S. formulation business as well as the API business have both come off a very high base of last year; hence, growth was muted. However, we are confident on both these verticals moving forward as well.
R&D expense at INR 350 crores in the quarter. Ex of Aleor's revised charge-off -- Aleor -- in order to compare for this last year, the R&D was INR 152 crores, which is 11 percentage of sales. We filed 11 ANDAs during the quarter. We also received 8 approvals in the quarter, including 3 tentative. We cumulatively have 160 ANDA approvals, including 22 tentative. We launched one product in the U.S. during the quarter and 13 during the full year, and we plan to launch about 15 products in the next financial year.
FDA inspections, we are working hard to address the observations issued by the FDA at our F-3 injectable facility located at Karakhadi. Remediation measures are underway, and we are in touch with the FDA to move towards full compliance.
Then to the numbers, the U.S. generics grew at 17% to INR 557 crores for the quarter. The ex-U.S. generics degrew by 19% to INR 188 crores for the quarter. The API business grew by 4% to INR 222 crores for the quarter.
I will now hand over to Shaunak to take you through the India branded business.
Yes. So good afternoon, everybody. The India business, I think, for another quarter, I think our ability to show a continued buildup and momentum in the business continues. A large part of this growth was spread over, not just on [ narrow ] part of the portfolio, which had some tailwinds this quarter due to the COVID, but it was pretty much across the product -- key product therapies as well as our key focus on the portfolios. And we expect this trend to continue going forward. Hopefully with some more further strategic [ that we mentioned ] we expect to strategically accelerate this pace of growth.
If I were to comment on the growth numbers, I think the India business grew by 25% to INR 449 crores and by 29% to INR 1,926 crores in '22 on a year-to-year basis and a quarter-to-quarter basis. As per the industry, the market grew by 18% in Q4. Alembic reflected a growth of 23% in IMS, whereas the internal growth -- the primary growth of sales growth is 29%. Across our key segments, both acute and specialty, we recorded a [ mark and market ] growth. In the specialty side, the market grew by 7%, whereas internally, we grew by 13%. And a majority of it is driven by our key product therapeutic areas of gastroenterology, gynecology and diabetes.
At the acute level, the industry recorded a growth of 25%, whereas Alembic recorded a growth of 60% by IMS and 57% growth internally. Anti-infectives, which had a strong tailwind this quarter, the industry showed a growth of 23%, whereas Alembic internal growth was 59% and the market reflection of 75%. Cough and cold, which is the second key segment in the acute business, industry showed a growth of 66%, whereas Alembic recorded internal growth of 54%. Our animal healthcare continues to still grow at a very robust high double-digit pace with all our interventions and that grew by 16% in Q4. For the financial year, the industry grew by 18%, whereas Alembic showed a growth of 29% internally. And this is spread over both acute at the chronic side of it.
The PCPM for financial year '22 is at INR 3.58 lakhs for the business. And for the whole year, the animal healthcare grew by 26% over a higher base of last year also. So that will [ lay ] the positive upside for the performance. I would like to open the floor for further questions and answers, please.
[Operator Instructions] The first question is from the line of Prakash Agarwal from Axis Capital.
Question on the U.S., so good recovery. You mentioned 3 points. So how much of it is sustainable? And how much of it is onetime and stocking related?
So I had given a guidance, so I said earlier that I think about 55 million or so would be our base business. So I would say, 55 million or so should be our base business moving forward. I still stick to that. I think apart from that, we had some stocking because we're moving our distributors. So there were some -- maybe there's some stocking, couple of weeks of extra material we supplied. And there were some onetime buy opportunities. As it's still continuing in this quarter, we'll wait till end of the quarters.
So I was trying to understand, we had 13 launches during the year. So they should have started picking up some share. Last quarter, you did 53 and the understanding would have been that these would increase market share plus some more new launches. So 55 million seems a very conservative number as a base business.
Yes. I think with what's happened to us last year and how we had some price erosions, so that's a number that I'm comfortable with. But yes, ideally, it is a conservative number, but let's see how it goes.
Okay. Fair enough. And secondly, on the Aleor business, in one of the presentation slides, you have given the -- with and without Aleor numbers. So Aleor is currently, despite some high single-digit launches, zero sales, I could not understand that piece.
Yes. So there is sales, Prakash, and there is sales of INR 35 crores for the year actually. So maybe because in large millions you may not be able to see that, but there is sales in current year.
Okay. No, I can see this slide. I don't know, there's no slide number. So it says, Q4 financial -- it says INR 14.16 billion, with and without Aleor. So both are -- and impact is 0.
So because that is considering both consolidated numbers than what we need to compare it between the standalone and consol, then you'll be able to see that. But I'm giving you the figure.
Okay. So that is about INR 36 lakhs.
No, crores.
Crores, okay. And given the cost base, that would be -- I would presume it is loss-making at the moment.
Yes.
Okay. Fair enough. And the second question was on the R&D side, since now it's a part -- subsidiary. What is our R&D guidance for the year?
So if you see on the R&D side, the total #1 [ game ], now without the one-offs, this year, we ended up at about INR 640 crores one-off. So it's INR 640 crore standalone Alembic R&D. Next year, guidance should be about INR 700 crores. That would include Aleor R&D as well, not the onetime [ virus ] because it's just the pure R&D evaluation.
We will also start charging off the entire R&D of Aleor P&L item. So we will stop this practice of capitalizing it and then amortizing it subsequently.
Yes, fair enough. And as a percentage to sales, that number then would look lower, right? I mean...
That depends on the sales, no?
Yes. So I mean, assuming India double-digit growth and U.S., you are saying already recovering...
So we don't really guide for the percentage of sales as it's an absolute amount I'm giving, so then I think, yes, if India grows, everything grows, then, yes, the percentage will come down.
Okay, perfect. And lastly, if you could share some broad level guidance for the India business? Because we had a high base Q1 last year?
Yes. So I think I wanted to maintain, I think, whatever the IPM growth is for the quarter, we should expect a few basis points higher than the IPM growth. Last year -- okay, I'll answer in 2 pieces. Yes, there's a large impact of last year's April and May stocking that happened due to the COVID phenomena. I think as long as the market stays robust, I think we should be able to grow a little bit faster than the market. So that being said, Azithral or Azithromycin oral solid did have extremely large tailwinds in May and June -- sorry, April and May of '21-'22. So yes, that would be a drag on the sales. The ex of these 2 products, we expect the portfolio to perform pretty decently.
The next question is from the line of Damayanti Kerai from HSBC Securities and Capital Markets.
I just wanted to understand Aleor-related costs better. So Baheti sir mentioned now all R&D will be expensed. So first, like how much of Aleor R&D has been capitalized so far? And going ahead, you mentioned like R&D will move up from around INR 640 crores to INR 700 crores for next year. So similarly, what kind of incremental costs we are expecting above EBITDA ex-R&D due to this ownership change for Aleor? So that's my first question.
So relatively Aleor accumulated R&D expense which was capitalized at CWIP [indiscernible] crores. We have expensed out INR 180 crores in this year, March '22. That's question one. Question two is that annual R&D expense as of now is about INR 50 crores, which we will -- we have charged off in '21-'22, and we charge it off from '22-'23 almost fully.
Sir, you said INR 50 crore R&D will be additional coming off from FY '23 [ fourth ] quarter, right?
That's correct.
Okay. And sir, I just missed like how much you said total R&D capitalized for Aleor?
About INR [ 350 ]-plus crores.
INR 350 crores, okay. And my next question is on India business. So obviously, you mentioned like traction has been very strong. So can you clarify a bit like what factors have helped us in achieving such industry-leading growth? And for FY '23, what are your expectation on growth contribution from the volume growth as well as from the price increase part?
Yes. So I think in terms of the India business, like I've been saying it now for quite a few calls, we've done significant corrections across the board in terms of our business, and it's hard for me to get into all the things we've done over the last 4 years, 5 years to get to this. But if I could just simply put it through, I think the transitioning of the product portfolio to a more high growth profile, for sure, is a big one that's helped us. I think along with that extremely robust and rigorous efforts that we put into our supply chain in the market to optimize that and that has given us strong results and along with that, I think a large amount of correct [ mining ] in the business and trenching of the right kind of profile of manpower. I think these would be the 3 very [ natural ] reasons.
Going forward, I think there's no guidance as such that I can give, but I think what I can say is that whatever the market performance, I expect us to do a certain amount of basis points significantly better than the market growth on any given quarter. And that's what we are working to at this point in time. And if over the next couple of quarters, we can establish this trend line, we'd probably give a guidance at the end of the year to see if we can look at a far more higher percentage of growth over the IPM.
Sure. Just a clarity, the [ NLPM ] hike, which was allowed from April 1, is that all like taken...
So on the volume and the product -- on the volume versus price growth, I think approximately -- Ajay, what's the guidance that we're giving on this?
It should be anywhere between a 70-30 split, 70% on volume and 30% on price.
Okay. So 70% contribution from the volume growth and rest 30% from the pricing hikes.
Yes.
The next question is from the line of Yash Gupta from Angel One Limited.
So sir, first of all, this INR 35 crores of annual business is for the complete in FY '22 or the quarter?
Full year.
Sorry, not audible. Can you please repeat, sir?
Full year.
Oh, the full year. We had 13 launches in FY '22. How much of the 17% growth is attributable to the new launches? And any thoughts on the price erosion in FY '23?
So we don't give a breakup of how much of the growth came from the new launches. But strategically, what Alembic does, as you know, whenever there's a market, we slowly pick up market share. We don't get market share right away. So we gradually pick up market share in our products. And as we get more confidence, as the buyers get more confidence in our supply chain abilities, we gradually pick up share. So we don't give a breakup of from where we got it. And number two, what was your second part of the question?
Price erosion.
It's tough to say because they're coming off a high base of last year. So I think if you look at it sequentially, I would say about -- I would say, 5%, 10% or something like that.
Okay. For the Indian business, sir, have we taken the price hikes in the April month related to the [ NLPM ] and any numbers that would you like to give?
So I think at the moment, we are still -- we've taken certain parts of the portfolio, we've taken a price increase, but we don't expect that to play out immediately as there is some amount of manufactured inventory that we have in our warehouses. So by the time we extinguish that inventory, it will play out maybe in a month or 2 in terms of pricing hikes.
The next question is from the line of Tarang from Old Bridge Capital.
Just a couple of questions on some key products. Read about a special settlement with the innovator. When could we see this launch happening?
For which one?
Desipramine.
So actually, we are not disclosing products which are under settlement, but you are right. The product has been settled, and we hope to launch at the time of market formation.
And when is that likely to be?
It's not like -- we are not able to give exact date at this time because of confidentiality provisions, but it's not in the near term.
Okay. Got it. Second, given that Lacosamide is -- it [ synthesized ] how is the market formation, because I see there's a lot of players there? And how big could this opportunity be?
I think, it's still early days. We did launch a product. I think it's a lot of competition. So I don't expect it to be a very large and meaningful launch for most people. Obviously, early days, we're just waiting to see what happens. We picked up some shares. But we haven't gone after any of the big accounts.
Got it. And the last, there's a product for which you've received tentative approval in January. It's called Vortioxetine. Could you just give us a sense what's happening there in terms of litigation with the innovator?
Okay. So Vortioxetine, I think in the public domain, you will see that there was a litigation going on. So we generally expect the launches to happen only after [ compound ] expiry.
The next question is from the line of Vaibhav Badjatya from Honesty and Integrity Investment.
I have 2, 3 questions from a longer-term perspective. So firstly, we have been repeatedly highlighting that we have a very nimble supply chain and whenever there are opportunities that arise due to market dislocation, we are in right position to capture that quite fast. So what exactly we have done to be in this good position that we are able to capture the opportunity? Like, is it like we generally have more inventory as compared to competitors? Or is it like our manufacturing equipment are more flexible to quickly shift between the different kind of production? So what are exactly the 3, 4 things that enables us to be in this good position?
Thanks, yes, I think that's one of the focus areas that we wanted to build on for the U.S. business because it's an important area we realized. So -- and you mentioned some of them. And so a few things that we do and I don't know compared to the competition, but what we do internally is, if we do pick up an account share, we do carry extra inventory. We carry extra always starting from the API or the intermediates to the finished products. So we carry some extra inventory. We have multipurpose plants, so it helps us to be more nimble. We try to leave some capacity idle so that helps us scale up very fast if there's a market share buildup. And I think all the way from the front end to the back end, there's been very good communication and everyone is aligned towards that, and that's what helps us.
Got it. Got it. And secondly, on the international U.S. business particularly, even if we exclude the onetime benefits that we get in different forms at different point of time, even our normal international business seems to be generating a reasonable sum of money. So in spite of it being a lot of products have been commoditized and it is well known that there are more than 6, 7 competitors for these kind of products. And in spite of that, not only you, but a couple of other competitors are also making a reasonable amount of money. So why it is that still this is a reasonably attractive business side of more of being -- I mean, excluding the onetime opportunity, most of the products have been commoditized, in spite of that, we have continued to return good money. So what, in your view, is the reason behind that?
It's -- listen, I think that -- and I've always said that one of the reasons why the U.S. market is attractive, not just for Alembic, but for everybody else, it's a large market, right? And while India is a very steady market, and you can grow at market or there's like -- as Shaunak mentioned earlier in the call, that there is a market share growth and you have to either do better than that or less than that. But you get restricted with that band. But for the U.S. business, there's a big opportunity to add business very fast. And obviously, classic example is Alembic and we've grown at -- up until last year, we were at CAGR of 25% in a 5-year period. So you can add a lot of business. And that's why the U.S. business is still attractive. Onetime buys always help you with helping your margins and therefore the profit. But long term, in terms of supply, steady supply, it's a good market to be in. There has been more price erosion as everybody else, all our peers in the market has said. So it's been a little less attractive. But our long-term view is it's still an interesting market, and we're still focused on it.
But generally, I know, think nobody [ has faced ] this number, but ROCE on the international business would obviously be lower than domestic, but [ dp ] we think it's still in the range of, say, 15% to 20% or it's below that?
So the ROCE on domestic business is very high, primarily because the investment needed for domestic business is negative, and we get a high possibility of profit. As far as international business is concerned, as we said, till '20, '21, we were making a decent ROCE even on the international basis. Two things has pulled down our ROCE in recent time. One is investment, which we have done, which has not started contributing revenues. And the second is some profits have been chipped off. So as of now, that's -- as a company, we are still good on ROCE, particularly, if you exclude the projects-related CapEx, because again they are still not revenue-generative.
Okay. So still -- I mean, if I exclude the CWIP or the projects that have not contributed to revenue, international business still have reasonable ROCE. That's what you say in FY '22 as well?
[ Nobody is in the state of mind ] and nobody is -- there is no definition, but we still have good positive ROCE.
[Operator Instructions] The next question is from the line of Ranvir Singh from Sunidhi Securities.
Just wanted a clarity on U.S. business. So in this quarter, we had better than the normal run rate -- that average run rate we had. So what was the reason that, that particular launch of respiratory products, that was the only contributor?
No. So as I mentioned earlier in my opening statement that one of the reasons why the U.S. did well is we picked up market share in our existing portfolio. So we've -- and I think I've been saying it for the last 2, 3 quarters, that we're gradually picking up share in some of our products. So that is one reason. Number two, there were some onetime opportunities that we saw in the U.S. market, some short term, so that had kicked up the sales. And third is we moved distributors in the U.S., still some inventory restocking at the distributor level. We carried some extra inventory at the distributor level to make the transitions smoother.
So of that, 10 million to 12 million would have been in the nature of exceptional upside, right?
I wouldn't like to give a breakup, we can start to say, but they've been high because of all 3 because part of it was increased market share and part of it onetime-wise.
Okay. Fine. And secondly, just on integration of Aleor, what was the operating cost related to Aleor in this quarter or for a year, if you can give?
So we have R&D cost of around -- between INR 40 crores to INR 50 crores, and the plant is very efficient. It runs around less than INR 40 crore.
So of that INR 188 crores, excluding that INR 65 crore is in amortization, the remaining INR 123 crore, of that INR 123 crore, which is above EBITDA, so that is...
What we can do is, we can take this question offline and you can call me and we'll discuss this.
Okay. Sure, sure, sir. So just last on another side, that on CapEx, what, in FY '23, we can expect?
CapEx of [ INR 450 ] crores. That would include the preoperating expenses for the plants.
Including preoperating, you're saying.
Including.
The next question is from the line of Ashwini Agarwal from Ashmore Investment.
On Aleor, in response to a previous question, you said that the capitalized R&D was INR 355 crores, of which INR 180 crores has been expensed off as a one-off. Is there a plan to expense off the remaining INR 175 crores as well?
Yes. So as I said, the -- actually, Aleor, I mean, as of now, it still remains a separate company though we plan to amalgamate it. They have decided to accelerate the amortization. So I believe the rest of the accumulated balance will get amortized in '23.
Okay. So INR 175 crores will appear as a one-off in fiscal '23.
INR 150 crores -- about [ INR 155 ] crores or so.
Okay. And sir, obviously, this business is incurring a fairly substantial loss at this point in time, and we have a number of filings in there. Could you help us build a picture about how we should look at Aleor over the next 3 to 5 years? I mean, you acquired the minority stake of 40% in this and you're amalgamating it in the holdco. I mean how do we think about this business from a 3- to 5-year perspective?
So in my opinion, the best way to look at it is -- it's separated now but I think moving forward, it's just going to be amalgamated into Alembic and there's not much to see, right? Because even on the R&D side, as I mentioned, the ongoing R&D cost will be INR 50 crores a year compared to about INR 650 crores that we have in Alembic. So it's a small fraction. We filed a bunch of products, about 30-odd products that they've got, and they will just get amalgamated with Alembic. Plant is running quite efficiently. And moving forward after the amalgamation, I don't think you should look at it separately, but it's just like a derm portfolio for us, because cost-wise, there's not going to be any major issue for us.
No, no. That's not the point. The point is that last year, you had revenue of roughly about INR 33 crores, right, against which you had an R&D expense of about INR 50 crores and plant operating expenses, if I got the number right, [ INR 30 ] crores or so. Correct?
Look, all booked together was INR 80 crores. So plant would be -- yes, I mean, around INR 30 crores, INR 40 crores.
INR 30 crores, INR 40 crores, so I mean it's a straight loss of about INR 50 crores. I mean obviously, while it will be a division and it will be a number that will get hidden away in the big picture of things, but I just wanted to understand the rationale for acquiring the minority stake. And what do you expect this business to contribute over a period of time? And the fact that it will be small is not relevant, right? The fact is that...
So the rationale is -- it's the same as it is for the rest of the U.S. business, right? We are still excited about the U.S. business, and this is a good portfolio to have. There are some opportunities in derma. And I do see the sales also ramping up significantly with a lot of approvals that will be coming in this plant. It's also -- as a plant, it's a very efficient plant. So I think it's going with our U.S. strategy, right, that we're excited in the U.S. business, and this one, too, is -- will aid to that, and sales and profit, everything will go up with this.
And if I recall right, the total capitalized value of Aleor as of 31st March '21 was of the order of INR 800 crores. Am I right? And out of which, let's say, INR 355 crores gets written down as R&D, so that leaves you with something like INR 500 crores ballpark. Would that be correct?
Yes.
And would it be reasonable to expect that over a period of time, this INR 500 crores can turn out an ROCE of double digits? Or would that be too aggressive?
I think over a period of time, it's expected to have double digit ROCE moving forward.
The next question is from the line of Saion Mukherjee from Nomura.
Just on the U.S. market, probably -- so this quarter seemed to have created certain opportunity. So what is driving it? Is it the China-related shutdown? Why are distributors talking more? And why are those opportunities coming back? Is there any structural shift? Or this is just...
No. So Saion, there's no structural shift per se in the market. I think for the last 3 quarters, I've been saying that with the erosion rate, we're looking at building up more market share in some products. So we've had that. That's one aspect of it where we've gained market share in some products. Number two is there were onetime -- certain onetime buy opportunities. I don't think they were China-related. It was just [ big picture ] whatever the reason the market was short on these products. That is the second one. And third, as I mentioned, the distributor, I think that is more only for us because we are moving our [ 3PL ], our third-party distributor to a new distributor on -- we moved on the 1st of April. Hence, we wanted to stock up some more material to ensure there's a smooth transition. So that's all. But structurally, there's no shift in the market per se. I don't think China disruption is something that we've seen so far on the formulation side in the U.S.
Okay. And the second question is, I mean, when you think slightly long term in the U.S., you mentioned it's a market which you feel excited about. But it appears that most of these opportunities are very much sort of one-off in nature, which is very unpredictable. So how do you make capital allocation decisions based on such sort of uncertainty?
So yes, I think -- but what we've seen historically with the U.S. market is while this moves up and down, there are opportunities always. And as I said earlier, it's like a massive market size. While the returns have come down considering what we thought initially, but we're being mindful of it. That's why if you see R&D -- what I said earlier that the R&D also for next year, we're going to keep R&D flat for next year. And there are -- if you do your job well, remain compliant, you will get opportunities as we've seen there from time to time.
Okay. And any other new areas that you are looking at for the U.S. market? I know your topicals, injectables, oral solids, anything else you want to sort of...
No, I think, as of now, our hands are full with what we've got, I think our first priority is to ensure the injectable plant is compliant. So we will resubmit our response to the FDA. We're undergoing remediation right now and we've got consultants. So that's the first aspect, because once that comes then automatically you've got ophthalmic and the regular injectables, people challenges, the long-acting injectables, everything then kicks into play.
Okay. Okay. And just one final question from my side. On the cost front, sir, if you can just throw some light on how the raw material, logistic and other overhead sort of costs are trending. I just want to know where we are versus, let's say, what we had seen maybe pre-pandemic levels, just to get a sense on how elevated the costs are for...
Yes. So this year, the logistics have been a big hit for everyone, I guess, in the industry, because all their shipping rates, not just air, but even sea has gone up. I think we moved a lot of our shipments from air to sea but in spite of that, we've seen a higher logistics cost. Mitaji, you have a sort of number on that?
Yes. I think on material costs, we are stable. So there is no significant change in quarters. I mean pre-pandemic is an old story, so I couldn't even remember the number. But tell me...
Yes. I mean material costs, some intermediates, some chemicals have gone up. Rest are -- rest I think is okay.
Is it possible to give a number like so many crores, let's say...
Saion, can we take this offline, like you call me and we'll discuss the numbers?
Okay, sure.
The next question is from the line of Prakash Agarwal from Axis Capital.
Yes. Am I audible?
Yes, you are, sir.
Okay. Just one question, like since Aleor is loss-making and derms are little bit kind of getting commoditized. Was there a thought process of selling our stake rather than buying the other stake?
No, I don't think that -- as I mentioned, I think it's an interesting market. So I didn't want to sell our stake. I think it's a FDA compliant plant, inspected 4 times. There's a nice portfolio, and it's a good basket of products. So I was quite keen to pick up the balance 40%.
Okay. And what's the pipeline like? I mean how many filed and how many pending?
We have total 45 products that we are working on at this point in time. There are others under consideration but 45. We filed 30 of that actually, and we have 17 approvals, and we have launched 11 products.
Okay. And these several products are currently giving us $5 million?
Yes.
Okay. And these would be just launched, right? I mean there is a chance of them becoming little larger, right?
Yes.
Okay. And secondly, on India business, since growth is across the board and more so acute, but things will normalize. Just trying to understand, I mean, in the past, we have invested or the capital allocation is higher in the export business. Having done that now, is there an M&A strategy for India? Any thought process there?
Yes. So on the India piece, I think on the M&A side, like I said, we keep, not scouting, but we keep a check of what's going on. I think at this point in time, looking at the last valuation with the last few transactions in the India business that have happened, including the veterinary ones, I think at this point, we see limited value or rather we see limited long-term value in any M&A strategy, at this point in time to pick up an entire portfolio. I think what we are constantly trying to do is we are trying to augment the portfolio. And I think we have certain slots in certain divisions or certain therapeutic areas where we can look at acquiring a one-off trend and those transactions are quite slow and long drawn and success rates are very low. But that is what we are looking at. But as of now, I think jumping in the fray for any M&A asset that comes up in India, I think that's not something we feel is a proven strategy for an Indian company like us.
We will continue to invest in our R&D growth…
Yes. So I think on the -- and the reason why I say this is I think, where we are, I think we've been able to demonstrate now it's been quite a few quarters, we've been able to show sustainable predictability and decent growth numbers. I think there are plenty of ideas and there are plenty of things at an organic level where we want to actualize that. So I mean, from a resource allocation point, yes, we have stepped up resource allocations a little bit compared to what we have done 2, 3 years ago. But there are a lot of ideas. I think there's a lot of clarity in terms of what can give us this additional incremental growth in the India business over and above what they do at this point in time. Hopefully, we can execute these in this year and some of that should start showing at the end of the year.
And lastly, on -- I mean, was there a comment on our partnership with Rhizen, I mean on Umbralisib, where are we? What are the next steps? If you could just give us the year-end overview and going forward, how...
Yes. So no, there was no comment on it. And it's a disappointing news that we saw and maybe some saw that the FDA has taken a very different view towards all PI3 kinase products in the market. And TG, they didn't -- or they'd volunteered out of that [ Kotak ] meeting. So what we know is in the public domain of TG. We will start discussions with them on what we've seen. But what we know in the public domain of TG is that they are not going to pursue oncology as much. They don't want to pursue oncology in the future. So when we talk to them, let's see how it goes, it is indeed disappointing because it was at the last leg. And FDA took this call, not for this particular product but all PI3 kinase inhibitors.
Yes. And then you have the chance to go and scout for another partner? Or how does these things happen?
So it's, as I said, in my discussions with TG. So let's see what happens. But we are in talks with them. So the next couple of weeks, we'll get an idea.
Okay. And is there any near-term milestone that was pending?
No, nothing is pending.
The next question is from the line of Bharat Celly from Equirus.
So sir, just wanted to understand on the domestic part, we're considering -- our product as it sounds like crossed the INR 450 crore mark. So do you think going forward for at least next 1 year, our growth could be in double digit for the Indian market? Or do you believe it could be less than10% in that case?
Yes. Sorry, my connection was bad. Can you just repeat the question?
Yes. Actually, I was asking, since our product [ EBITDA ] has crossed INR 450 crore mark for this year, which could actually normalize going forward, considering the COVID cases as well as all the [ infections ] have come down drastically. So do you believe we can grow in double digits even going forward in FY '23?
Yes. So I think this year, like I mentioned, I think, with some amount of a higher base this year, I think growing at a double digit for this current year -- sorry, '23 -- '22-'23, I think, would be a bit of a challenge. But I think going forward, I think '23 onwards, we should come back to historical growth number that we used to be -- we've been giving pre-COVID which is anywhere from a low to a mid-level double-digit growth based on market growth numbers.
Sure. So I just wanted to understand on the U.S. part as well, considering we have got additional set of queries for the new facilities. So how do we look at the U.S. market from FY '23 perspective in the absence of new plants, considering that the new product approvals, which we have seen is having a [indiscernible] of around $25 million, $30 million. So in the absence of new facilities coming through, how do we look at the U.S. market for FY '23?
There's 2 parts to it, right? So I think we are still going ahead launching. As I mentioned, we will launch about 15-odd products in the U.S. in FY '23. So that will help the growth as well as what we saw in Q4 that we picked up share with some existing products as well. So 15 products is pretty good. And I think we should be able to get growth on these products. In the next 6 months, 9 months, depends how long it takes with the FDA, we'll get an idea about the new facility as well. But growth will continue because we have non-injectable portfolio as well.
All right. And I just wanted to understand one part. So considering our overall -- we haven't got a settlement for Revlimid. So when that launch is scheduled? Are we going to get the -- at the time of market formation in the second, third wave, how it is going to be?
Sorry, is -- the question was on Revlimid?
Yes.
Yes. So Revlimid, I think, what's in public domain is that we are in litigation with the client, the innovator. And that's all we can say. At this stage it's pretty early stage in litigation. So we'll see how that progresses.
Oh, okay. So we have not yet settled it, right?
No, we have not yet settled it.
Right. And last question. So you said 15 launches. Out of that, how many are going to be the ones which we had got already approval in FY '22 and will be launching in FY '23?
I've been saying 15, that's what I expect to launch. So based on some old -- see, there's always -- we don't launch. We sometimes take some time to launch the products, there'll be same market formation where we wait, it's an opportunity. But we will launch 15, some maybe from this last year, some may be pending with us for a while. It depends on the situation.
Ladies and gentlemen, due to time constraint, this was the last question. I now hand the conference over to Mr. R.K. Baheti for his closing comments. Over to you, sir.
Yes. Thank you. There's a couple of pending questions [indiscernible]. We have some other schedule. So you can get in touch with anybody, whose questions were not responded to, including Jesal, Mitanshu or Ajay. We will be happy to share the information. And thank you very much, everyone, for joining this call and it's always interesting to interact with you. And look forward to seeing you again next quarter. Thank you.
Thank you. Thank you, members of the management. Ladies and gentlemen, on behalf of Alembic Pharmaceuticals Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.