Tushar Manudhane: Okay. Because second quarter PSAI revenue was INR960 crores with 13% gross margin and now it is INR1,013 and the gross margin has improved to almost 22%.
Erez Israeli: Yes, it’s a combination again of the mix and the combination of the more sales. And there is nothing unusual in that. It’s just a type of growth.
Tushar Manudhane: Okay. And just lastly, considering the launches and the filings and the markets have gained for the existing products, if you would like to share outlook for the U.S business for FY ’25, so I think could you share some color on that.
Erez Israeli: We are not getting guidance, but we are supposed to continue to do well in all the levers. So far it looks healthy for both commercial products, service to the customer, price environment. and the unemployment is going to continue to diminish, so all the levers should continue to work well also in the next coming quarters.
Tushar Manudhane: Sure sir. Thank you.
Operator: Thank you. The next question is from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria: Thank you so much for taking my question. If I were to look at the SG&A spending increase that we have seen in the quarter or even if I were to look at it over a three-year period. I know you’ve mentioned that we’ve been investing in Horizon-2 products, a project that you talk about. But from a monetization point of view, when should we start seeing this contributing to revenue? I’m just trying to understand when should we start seeing operating leverage in the higher spend and do you think this number continues to trend up from where we are?
Erez Israeli: Yes. So part of it which is related to the investment we put now in certain brands in India will give the results already in FY ’25, because we’re good to make sure we begin. So part of it is related to investment that will take more time as we are putting the money into building products that will be launched in FY ’26, ’25, ’26, and then ’27. So likely that this level at least on the value wise will continue to be a bit higher, but I do see more growth in revenue. So overall, it should be in the same environment as it used to be in the past before the COVID. But let’s say to your questions, half of it will be already in FY ’25 and half of it will be in FY ’26 and so on.
Neha Manpuria: And if I were to dig a little deeper on the points on the launches, I know in your analyst meet you’ve mentioned certain areas that you’re working on. But out of the 2025 launches that you talk about in the U.S., can we try to understand as to how many of these could be, the bread and butter launches that we need to offset the business? And how many of these could be meaningful products, some color there would be helpful?
Erez Israeli: Yes. So we have all the own about 26 products that can be launched with this approval. Winning all the [indiscernible] in the market that can be launched, and I’m talking about products that can be meaningful investment for means, probably in tens of millions and more than that. This is what let’s say for the second discussion. The question is what combination of that will actually get to the market and what will be the sale, that’s of course I don’t know, but we are building on that to offset the period after the new development. And in addition to that, we are planning to add the growth in the other levels as well as the potential digital, so the combination of those is supposed to lead in a positive direction.
Neha Manpuria: And just to follow up on that, the 26 products would be, over the next two years, three years; how should I look at the timeline for that?
Erez Israeli: So potentially, with all the courses about this kind of product, I refer to products that are supposed to be in the next two years, ’25 and ’26, if it’s going to ’27, there are more products. Of course, subject to approval, subject of course and subject to all the normal challenges that you have been put up to the market, but let’s say it’s an healthy list of tough to make, tough to develop products..
Neha Manpuria: Understood. And my last question on the biosimilars pipeline. Could we talk about how many products we are developing for the U.S. and European market? And when should we start expecting, some sort of a timeline or let’s say a progress update on the pipeline that we’re looking at for biosimilars?
Erez Israeli: Yes. So we are talking about six products by effort, again, subject to receiving approval in this timeline, but in subject to patent cases, but the cases is what we are aiming for. If you recall at the time when we had the change that we made after the arrangement of whether time with the next ceremony, we decided to skip a couple of years and to move the products that we have to transfer across the market, which is the strategy. The first product should come in the calendar, the beginning of calendar 2027, and then the rest of the product by FY ’30. And of course, we have a bunch of products that we come in between ’30 and FY 31, FY ’35. So that’s right now the case that we are planning for.
