Torrent Pharmaceuticals Ltd (BOM:500420) Q2 2025 Earnings Call Highlights: Strong Growth in ...

• Total Revenue: INR2,889 crores, up by 9%.

• Operating EBITDA: INR939 crores, up by 14%.

• Operating EBITDA Margin: 32.5%.

• India Revenue: INR1,632 crores, growth of 13%.

• Brazil Revenue (Constant Currency): BRL174 million, growth of 17%.

• Germany Revenue (Constant Currency): EUR31 million, growth of 6%.

• US Revenue (Constant Currency): USD32 million, growth of 7%.

• Net Debt to EBITDA: Less than 0.5x.

• Outlets Coverage: Expanded to 72,000 outlets from 68,000 in Q1.

• Field Force: Increased to 6,000 from 5,700 in the previous quarter.

• Warning! GuruFocus has detected 2 Warning Signs with BOM:541301.

Release Date: October 25, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

• Torrent Pharmaceuticals Ltd (BOM:500420) reported a strong performance in its branded businesses, which accounted for 74% of the overall revenue this quarter.

• The India business grew by 13% this quarter, outperforming the Indian Pharmaceutical Market (IPM) growth of 8%.

• The company's operating EBITDA increased by 14% to INR939 crores, with an operating EBITDA margin of 32.5%.

• The Brazil business showed a robust 17% growth in constant currency terms, driven by new product launches.

• The company has expanded its consumer health business coverage to 72,000 outlets, up from 68,000 in the previous quarter, indicating a strategic focus on market penetration.

• Insulin revenues were impacted due to a facility shutdown for maintenance, leading to a shortfall of INR40 crores this quarter.

• The US business remains stable but is not expected to ramp up significantly in the short term due to older product filings.

• The company faced a Forex loss included in other income, impacting overall financial performance.

• The US FDA issued a Form 483 with one observation at the Pithampur manufacturing facility, indicating regulatory challenges.

• The volume growth in the India market remains muted, with low single-digit contributions, raising concerns about future growth sustainability.

Q: Is the manufacturing disruption a temporary issue, and will it be resolved soon? A: Sudhir Menon, Chief Financial Officer, confirmed that the manufacturing disruption is temporary. The facility is expected to resume operations in December, and the shortfall will be recovered by the fourth quarter, ensuring no impact on the full-year revenue.

Q: What is driving the consistent improvement in gross margins, and can these levels be sustained? A: Sudhir Menon explained that the improvement in gross margins is due to a higher branded mix in the overall revenue base. The margins are expected to hold at current levels, given the stable branded mix.