During the quarter, your revenue from operations rose 25% YoY to Rs 2,607 crore. Help us understand the factors that led to this kind of growth.
Rajeev Juneja: Our strong revenue growth this quarter was driven by robust performance across key business segments and an expanded presence across multiple channels. A major factor was the 20% growth seen in the domestic business, led by 1.3x faster growth in chronic therapies compared to the rest of the Indian pharmaceutical market.

Critical chronic treatments, such as cardiac and anti-diabetes, experienced growth rates of 16.7% and 13.4%, respectively. Additionally, the quarter saw a recovery in acute therapies (due to delayed season) as anti-infectives and gastro segments grew 13.8% and 12.8% respectively against IPM growth of 9.5% and 9.3%. Driving volumes across therapies was very strong growth in modern trade and hospital channels, which is not captured by IQVIA in their value growth (likely to stabilise next year).

Adjusting for this faster growth in non-chemist channels, domestic formulation secondary growth would also have shown significant increase. Additionally, our exports business grew 118%. In summary, the strong revenue expansion in Q3 resulted from broad-based growth across the portfolio and successful penetration into new channels.

Your gross margin dropped 120 bps on a quarter-on-quarter basis. Can you help us understand the reasons behind the dip? What is the guidance going ahead?
Rajeev Juneja: Firstly, we had to make some inventory related accruals during the quarter on account of slow moving and non-moving stock. This negatively impacted the overall gross margins. Secondly, there was some under-utilisation of production capacities at our Sikkim manufacturing facility due to shutdowns caused by floods in the region. This led to reduction in the gross margins on QonQ basis

As indicated previously, we are committed to maintaining EBITDA margins in the range of 24% to 26% for FY24. Our focus continues to remain on further improving profitability through a favourable product mix including higher chronic sales share, better capacity utilisation and opportunistic price increases wherever feasible.Your export business saw a growth of 118% YoY due to one-off opportunities in the US. Do you see more such opportunities coming in? Are you looking at increasing the revenue mix in favour of exports?
Rajeev Juneja: While we remain open to such profitable opportunities, our core focus continues to be growing and strengthening our domestic business which accounts for over 90% of revenues.

That said, we have been increasing efforts on expanding our international presence in regulated and emerging markets. We have a healthy pipeline of filings and new product launches lined up for the US and other markets which will drive steady base growth going ahead.The consumer healthcare business was down 5% YoY on inventory correction. What makes you confident of a turnaround in FY25?
Rajeev Juneja: This was an outcome of the deliberate corrective actions we took over the last few quarters towards optimising channel inventory, facilitating stockist consolidation and implementing IT systems. While this temporarily impacted primary sales and revenues in the short term, we continue to see very robust growth trends in secondary sales across our key consumer healthcare brands. This is already resulting in consistent market share gains across categories.

Going into FY25, we have completed the transition and initiatives around distribution and technological upgrades. From a business perspective, the demand for our pre-established consumer brands continues to be strong, as reflected in our market share growth. Further, the strategic focus is also on increasing rural penetration, especially with flagship brands like Prega News and Gas-O-Fast, which will expand our user base.

Given the heavy lifting around channel consolidation is already done with, we remain upbeat on the consumer healthcare business regaining its historical growth momentum in double digits from FY25 onwards. The strong underlying brand fundamentals coupled with this expanded reach is what gives us the confidence in a satisfactory turnaround going forward. We have also been working on products premiumization and line extensions, new launches etc which will further support our growth.

Mankind’s market share in key chronic therapies such as cardiac and anti-diabetic has reached all-time high levels. Which segments do you see most of the incremental gains coming in for the next 2-3 years?
Rajeev Juneja: We are quite pleased with the consistent market share growth we have seen in core chronic therapies. Going forward over the next 2-3 years, a couple of key chronic segments are likely to drive a lion’s share of our incremental market share gains.

We are consistently outperforming in Chronic market and increasing our MS % but we are still under-indexed (Cardiac 11% vs 13% IPM in FY23, Anti Diabetic 8% vs 9%) in key chronic therapies like Anti-diabetics and Cardiac and we are working to improve our market share and propel our growth by tapping white spaces, improving our penetration in launches done in last few years and by pursuing new launches via organic and Inorganic route. We are also working on strengthening our other chronic specialities.