Earnings Review
Torrent Pharma consol PAT up as sales grow in key mkts
This story was originally published at 22:54 IST on 23 July 2024
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By Alina Geogy
MUMBAI – Torrent Pharmaceuticals Ltd's key earnings metrics improved on year in the June quarter due to strong growth in its key branded markets Brazil and India. The drugmaker today reported a near 21% on-year increase in consolidated net profit for Apr-Jun at 4.57 bln rupees, slightly lower than analysts' average estimate of 4.70 bln rupees.
Total revenue from operations for the quarter rose over 10% on year to 28.59 bln rupees, compared to analysts' estimate of 29.02 bln rupees. On a sequential basis, the net profit rose nearly 2%, while revenue rose over 4%.
KEY MARKETS
The company's revenue from India operations grew 15% on year to 16.35 bln rupees in Apr-Jun. "We expect the India business to continue outperforming the market growth," the management said in a post-earnings conference call. "Our focus during the year will remain on improving our market share in chronic therapies, new launches, improving field force productivity and expanded divisions and regions, and continuing the scale up of the consumer health portfolio."
Revenue from its operations in Brazil grew 3% on year to 1.96 bln rupees, while revenue from Germany rose 10% to 2.84 bln rupees. Secondary sales in the Brazilian market continued to grow in double digits, but primary sales were impacted, the company said. Currency depreciation of around 5% during the quarter was another factor that affected sales in Brazil, the company said. Meanwhile, in Germany, the company's overall share in the generics market is increasing steadily on-quarter, with Torrent ranked fifth in the overall generics business in the country, the company said.
Revenue from the US market fell 12% on year to 2.59 bln rupees in Apr-Jun. The on-year decline is a result of a high base from a year ago, the company said. Sequentially, the business delivered stable revenues, backed by new contracts.
The company said it would focus on deepening its presence in branded generic markets such as Brazil and Mexico, while continuing to grow in Germany and returning to profitable growth in the US.
SALES DRIVERS
The company's chronic segment business grew 14%, driven by a strong revival in cardiac divisions and continued traction in new launches of anti-diabetes medications, the company said. The company's brand 'Kabvie' for marketing drug Vonoprazan was the first licensed product to be launched in the market, and the initial response of the molecule seems quite promising, the company said. In June, Torrent had signed a non-exclusive licensing agreement with Takeda Pharmaceuticals Co Ltd to commercialise Vonoprazan, which is used for the treatment of gastroesophageal reflux disease.
In the post-earnings call, the company said it was looking to add another product in its consumer health segment towards the end of this year. The company currently has four key brands in this segment – Shelcal, Tedibar, Ahaglow, and Unienzyme. "Our focus during the year will remain on improving our market share in chronic therapies, new launches, improving field force productivity and expanded divisions and regions, and continuing the scale up of the consumer health portfolio", the company said.
The company's earnings were also aided by high growth traction in its Curatio portfolio, which has now been fully integrated. In November 2022, the company acquired Curatio Healthcare Pvt Ltd, which held a strong portfolio in cosmetic dermatology.
In the June quarter, the company's other income fell to 240 mln rupees from 340 mln rupees a year ago. The total expenditure, including finance cost, rose to 22.27 bln rupees in the quarter, from 20.94 bln rupees a year ago. Finance costs declined to 750 mln rupees from 1.03 bln rupees a year ago. The company's tax outgo for the June quarter rose to 1.99 bln rupees from 1.53 bln rupees a year ago.
Today, shares of Torrent Pharmaceuticals closed 3.6% higher at 3,138.70 rupees on the National Stock Exchange. End
US$1 = 83.69 rupees
Edited by Avishek Dutta
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