Indoco Remedies Limited — Q4 FY26 earnings call

Our 4th Quarter performance, if you see, in terms of exports to reg market, which is overall up by close to about 28%-29%. Out of that, emerging market growth is about -- significant growth, I would say, in a 4th Quarter, where we have longer receivables, I would say, as compared to domestic business and API business. So, that is the primary reason of receivables, which are number of days of receivables, which are going up.

Management explained the reason for elongated receivables, attributing it to the strong growth in international and emerging markets which typically have longer credit periods.

Asked by Sajal Kapoor

Yes, there has been some, where we have not paid suppliers on time given some of the cash flow situation we had. But I am confident within a week we should be able to settle this.

Management acknowledged delays in supplier payments due to cash flow issues and committed to resolving them quickly, addressing a key working capital concern.

Asked by Sajal Kapoor

if you are seeing an Rx performance now, then your IQVIA should follow after that and unless there is too much stock in the market, your primary should automatically get corrected. However, your concern about if we are really generating demand, what if our products are getting either substituted or not available? For that, this year, in particular, we are undertaking a major exercise to reach out to the stockists who stock our products and the retailers.

Management clarified the discrepancy between strong prescription growth and muted primary sales in India, citing seasonal stockist behavior and ongoing efforts to improve product availability at the retail level.

Asked by Nirmam

Absolutely not. It is a very small division. At primary level for internal sales, for the year we have clocked INR 37 crores in India. And we have to recognize that we are the 13th player in this market where companies like Entod, Sunways, even very small organizations are able to get a lead on us. Obviously, because for them it is a very, very fundamentally core area of business. So, they approach it differently.

Management explicitly denied that the ophthal business hive-off was for liquidity reasons, stating it was a strategic decision to focus on core areas given the division's small size and competitive landscape.

Asked by Nirmam

this quarter exchange loss itself on a foreign currency loan, ECB loan is substantial. Almost half a portion of this finance cost is towards the exchange. ... INR 24 crore impact.

Management provided a specific figure for the forex impact (INR 24 crore) on interest costs, clarifying a significant component of the increased finance expenses.

Asked by Nirmam

FPP as Pramod explained, we were impacted with some extraordinary costs which were taken at end of this quarter on expired products etc. which is why it has seen a hit. Almost INR 4 crore was the impact seen, but also the product mix. So, we actually looked into this because the COGS on the Q4 sales of FPP have been extraordinarily high because some of our products are not...We do have a few products in our market which don't get very good margins and when we sell more of that or when we have to do a shelf stock adjustment or things like that, in that quarter you see a hit.

Management detailed the reasons for FPP's negative net worth and profitability hit, including extraordinary costs, product mix issues, and shelf stock adjustments, providing transparency on this segment's performance.

Asked by Kenil Mehta

It is the API plant as I said where we have both capital expenditure done, we also have operating expenses because we are doing validations of products there. But these validations are not resulting into sales right now because those products are not yet approved out of that site and that is putting pressure on the entire Warren Remedies numbers. ... it will take us one more year to get reg market approval.

Management clarified that the API plant's validation process is impacting Warren Remedies' financials by preventing sales of validated products, outlining a timeline for regulatory approval and its expected positive impact.

Asked by Kenil Mehta

for the reg markets, of course, the Europe business of base contract manufacturing will continue to grow but more than top line growth that business is likely to give us better margins in the coming year because it could be manufactured in plants which have completed all its MMP scale ups and all those things. In U.S. while historically we were only dependent more on sterile, we have now added a substantial solid oral base and that is also doing very well. In this year both in Europe and U.S. we intent to launch our liquid orals which is not as crowded as space as other solids, and we expect to do well here also.

Management outlined specific growth strategies for regulated markets, including margin improvement in Europe contract manufacturing and new liquid oral launches in both Europe and the US, indicating future revenue and margin drivers.

Asked by Maulik