Nature of the Disclosure

This document is the transcript of the first Analysts'/Institutional Investors' Call held by the new management of Novartis India Limited (NIL or the Company) post the acquisition of a 70.68% controlling stake by ChrysCapital. The call was held on September 11, 2026, and this transcript was submitted to the BSE in compliance with SEBI Listing Regulations (Regulation 30 read with Part A of Schedule III and Regulation 46(2)).

Key Strategic Updates and Business Overview

Company Context: The Company has a 79-year history and has been listed for 27 years. Its performance over the last four years has been flat in terms of both revenue and Profit After Tax (PAT), despite housing well-known, market-leading brands like Voveran (pain relief), Methergin (women's health), Calcium Sandoz (injectable calcium), and Tegrital (epilepsy). The Company has a strong cash balance.

New Business Strategy: The new management, led by CEO Dr. Vikas Gupta, outlined a strategy to transform NIL into a growth company focused exclusively on the Indian pharmaceutical market. The strategy is built on six anchor therapy areas: Cardiology, Pain Management, Women's Health, Central Nervous System (CNS), Transplant, and Ophthalmology. These areas represent 40-50% of the incremental value added annually to the Indian pharma market.

Commercial Reset and Operational Changes: A fundamental shift involves bringing promotional control in-house. The previous model involved arm's-length partnerships for promotion, which led to stagnation. The new plan includes:

  • Building a dedicated field force of ~900 medical representatives to cover 150,000 healthcare practitioners.
  • Expanding the distribution network significantly from 4 C&Fs (Carrying & Forwarding agents) to 25 C&Fs to achieve pan-India reach.
  • Focusing on lifecycle management and brand extensions for existing large brands.
  • Using the established platform to launch new products in the chosen chronic therapy areas.

Financial Impact of Reset: The commercial reset will incur significant near-term costs. The historical quarterly cost run-rate was INR 10-15 crores. The incremental investment for team-building, marketing, and activities is expected to be INR 40-50 crores per quarter, effective from Q2 FY27 onwards. Management expects the team to be fully operational by the end of Q3 FY27 (around December 2026), with the full financial impact of these costs visible in Q4 FY27. This investment is expected to cause a dip in profitability in the short to medium term, with a return to margins upwards of 20% expected in a 2-3 year timeframe.

Mergers & Acquisitions (M&A) Activity

M&A is stated to be an integral part of the growth strategy, with a focus on disciplined capital deployment and achieving returns above a hurdle rate of ~12.5% with a target payback period of 8-9 years post-synergies.

1. Minipress XL Acquisition:

  • Date Closed: September 9, 2026 (Monday of the call week).
  • Acquired From: Pfizer Inc., US.
  • Asset: Trademark for Minipress XL.
  • Business: Leader in the alpha-blocker category (antihypertensive, BPH) with a 55-60% market share.
  • Financials: Reported MAT July '26 revenue was INR 228 crores, growing at a CAGR of 6.5%. The acquisition price was INR 1,250 crores. The brand contributes an estimated EBITDA of ~INR 90 crores.
  • Rationale: Provides a strong platform for entering the cardiology therapy area. Bridging stock is in place, and the supply chain has been secured. The Company did not inherit any sales force from Pfizer.
  • Funding: The acquisition was debt-funded. The Board has exploratory approval to repay this debt, and the Company is evaluating various capital-raising options with an aim to significantly repay it before the end of the current financial year.

2. Ophthalmology Portfolio In-licensing:

  • Date Closed: September 10, 2026 (Tuesday of the call week).
  • Licensed From: NHPL.
  • Assets: Brands Pagenax (under patent, only brand in its category) and Accentrix.
  • Indications: Diabetes Macular Edema and Wet AMD.
  • Financials: The total portfolio is valued at over INR 100 crores. An upfront fee of INR 10 crores was paid to the innovator. The arrangement is an exclusive in-licensing/distribution model with a transfer price structure; there are no future royalty payments.
  • Rationale: Provides a platform to build an ophthalmology franchise and offers distribution synergies.

Capital Structure and Ownership

  • Ownership: ChrysCapital holds a 70.68% stake in the company following a successful open offer.
  • Open Offer Price: The open offer price was INR 860.64 per share. The tender period was from June 11 to June 24, 2026, with minimal shares tendered by public investors.

Governance and Management

  • New Board: Comprises new independent directors with strong corporate backgrounds, including a Chairperson who is the ex-MD of 3M India.
  • New Management Team: A completely new team has been put in place, including a CEO & MD, CFO, Commercial Head, Supply Chain Head, CHRO, and Head of M&A/BD/IR. All team members have extensive industry experience.
  • Name Change: The Company plans to seek shareholder approval for a change of name to reflect the new strategy and identity, though product brand names will remain unchanged.

Financial Guidance and Outlook

  • Revenue Target: Management aspires to double the company's revenue organically over the next 4-5 years. The annualized run rate for FY27, including recent acquisitions, is approximately INR 650 crores.
  • Margin Outlook: Near-term margins will be pressured due to the commercial reset costs. profitability is expected to improve thereafter, with a goal to return to margins above 20% in 2-3 years.

Contingent Liabilities and Legacy Issues

  • NPPA Pricing Dispute: Contingent liabilities exist related to NPPA pricing disputes for brands Voveran and Tegretal dating back to 2014. There has been no hearing or movement on this litigation for the last 7-8 years. The Company believes it was compliant.
  • Income Tax Liability: A provision of approximately INR 300 crores has already been made in the books for a specific income tax liability.
  • Dr. Reddy's Agreement Termination: The financial impact of terminating a previous promotional agreement with Dr. Reddy's is still being worked out and is not quantified in this disclosure. specifics are expected to be clearer after Q2 FY27 results.