Shyam Srinivasan

Shyam Srinivasan asked for a breakdown of the NRT business growth, specifically the constant currency growth, and how its profitability has evolved. He also questioned Novo Nordisk's strategy in Canada regarding their own generic brands for Semaglutide.

Answer

CFO M V Narasimham stated that the NRT business grew 8% year-over-year in constant currency, with the rest attributed to currency changes. He noted that profitability (EBITDA percentage) is currently higher than the 25% initially projected. CEO Erez Israeli commented that Novo Nordisk's strategy likely aims to protect market share, but he had no data on potential cross-border slippage to the U.S.

Shyam Srinivasan inquired about the constant currency growth and steady-state growth expectations for the NRT business, its profitability evolution, and Dr. Reddy's understanding of Novo Nordisk's strategy in Canada regarding Semaglutide.

Answer

CFO M V Narasimham reported NRT's constant currency growth at 8% year-over-year, with the rest attributed to favorable forex. CEO Erez Israeli noted an upside to the initial single-digit growth model, potentially reaching double digits, and confirmed profitability is currently above 25% EBITDA, with 25% being a fair long-term assumption. Erez Israeli commented that Novo Nordisk's strategy likely aims to protect market share, but he had no data on potential cross-border slippage to the U.S.

Shyam Srinivasan of Goldman Sachs inquired about the full-year CapEx outlook, plans for deploying the company's cash surplus, and the strategy for sustaining growth in the India business.

Answer

CFO M V Narasimham guided for full-year CapEx of ₹2,100-2,700 crores, similar to last year, with investments focused on peptides and biosimilars. CEO Erez Israeli added that the company has $2-2.5 billion in financial capacity (including debt) for business development and is actively pursuing opportunities. For the India business, he stated growth will be driven by launching innovative products through in-licensing, rather than focusing on branded generics, to consistently outpace the market and achieve double-digit growth.

Shyam Srinivasan of Goldman Sachs asked about the company's capital allocation strategy given its significant cash balance and strong cash flow, specifically focusing on investment priorities and its M&A philosophy for the Indian market amid high valuations.

Answer

CEO Erez Israeli stated the company has about $2.5 billion in inorganic investment capacity and will focus on collaborations and licensing across its four key areas: B2B generics, innovation, consumer care, and biologics. Regarding India, he affirmed it remains a priority market but emphasized that the company will not pursue deals where the cost of capital exceeds the potential return, avoiding overpaying for EBITDA in the current high-interest environment.