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Informist, Wednesday, Jul. 29, 2026

 

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--Torrent Pharma: Net-debt-to-EBITDA ratio at 2.7 times as on Jun 30
--Context: Comments from Torrent Pharma's mgmt in post-earnings analyst call
--Torrent Pharma: Expect to resume supply of Semalix by end of August
--Torrent Pharma: Expect incremental improvement in margins throughout FY27
--Torrent Pharma: Expect revenue synergy from JB Chem integration next year
--Torrent Pharma: Expect double-digit generic semaglutide mkt share in Brazil
--Torrent Pharma: Saw higher-than-expected  Q1 volume growth in semaglutide
--Torrent Pharma: Expect US ops to be profitable going forward
--Torrent Pharma: Gross margin up to 77% sustainable in FY27
--Torrent Pharma: Expect to reduce medical representatives count to 9,000

 

By Eshitva Prakash and Diksha Tripathy

 

MUMBAI – Torrent Pharmaceuticals Ltd. expects to resume by the end of August supplies of the Semalix dosages that were withdrawn earlier this month following an issue with an active pharmaceutical ingredient. Supplies of certain batches of the generic semaglutide injectables were disrupted after an API-related issue with Dr. Reddy's Laboratories Ltd. After resuming supply, Torrent Pharma hopes to quickly regain its dominant market share in the injectable semaglutide segment, the management told analysts in a post-earnings conference call Thursday.

 

"We have already secured an alternate supply source for the product and are hopeful that all Semalix SKUs (stock-keeping units) should be back in the market by the end of August," the management said. The company is in a manufacturing partnership for Semalix injection with Dr. Reddy's and MSN Laboratories. "We remain hopeful that we should be able to recover our market share quickly due to the early established brand equity," the management added.

 

Earlier in July, Torrent Pharmaceuticals voluntarily recalled 2 milligram and 4 milligram doses of Semalix injection manufactured by Dr. Reddy's after the latter said commercial supplies of its anti-diabetic drug would be delayed after certain batches failed quality specification tests. Oral drugs made by Torrent Pharma, the 8 milligram Semalix injection manufactured by MSN Laboratories, and the Sembolic injection made by Zydus Lifesciences Ltd. are unaffected and continue to be available in the market.

 

"While there will be loss of sales from these SKUs (stock-keeping units) in July and most of August, we remain hopeful that we should be able to recover our market share quickly due to the early established brand equity," the company's management said. It holds a domestic semaglutide market share of 36%, including both oral and injectable products. It has a dominant position in the oral semaglutide segment, recording a market share of around 94% by the end of June. "The recent unforeseen supply-related issue with our manufacturing partner for the injectable product is an unfortunate temporary setback," the management said.

 

For the June quarter, Torrent Pharma reported a consolidated net profit of INR 5.66 billion, up over 3% on year. Its consolidated revenue for the June quarter was up over 54% on year at INR 49.21 billion.

 

While the company expects to regain market share in the injectable segment, it is no longer certain it can deliver on its earlier annual sales guidance of INR 2.50 billion for semaglutide products in India. "Now that we are faced with the (supply disruption) situation, that's definitely not going to be possible, but we would rather wait for another quarter to see how our relaunch of the lost SKUs, how quickly they can regain share, and then we can get back with what the annual number could be," a senior company official said.

 

The company is still waiting for approval from Brazil's health regulator to sell semaglutide but is optimistic that the regulator will "consider our application favourably". Torrent Pharma expects to capture double-digit market share for the drug in Brazil despite the likelihood of facing intense competition. "Given our historical strength in Brazil and our position, especially in the chronic and cardiac diabetes segment, we would have been keen to have the first-mover advantage, but unfortunately, that's lost, and we admit that that's a bit of a miss from our side," an official said.

 

On the strong rise in semaglutide market share in the June quarter, the management said volume growth for the drug was higher than it had expected. In contrast to the opinions of some sector analysts, the company's management does not see semaglutide demand plateauing. In fact, it is confident that demand for the drug will recover in upcoming quarters.

 

Torrent Pharma's management expects to sustain up to 77% gross margin for its base business. Its gross margin was 76.4% in the June quarter, aided by a strong showing in India and price hikes by the company in April. "I can say definitely if last year (gross margin) was 76-76.5%, anything up to 77% is looking definitely sustainable, beyond that... there are other factors which have played out, which is contributing to the incremental growth margin," an official said. The company also expects to incrementally improve its operating earnings before interest, tax, depreciation, and amortisation margin every quarter.

 

The company had integrated the pharmaceutical business of JB Chemicals & Pharmaceutical Ltd. by purchasing a controlling stake of 48.80% in January. The company had earlier guided for a sales synergy of more than INR 900 million, but now it expects the synergy figure to be far higher. However, a bulk of synergy benefits from the integration will start next year, Torrent Pharma's management said. For the contract development and manufacturing segment of JB Chemicals, the management does not see a need for further integration. Consequently, it expects the segment's revenue to increase by a high single digit to low double digits in constant currency terms for the financial year 2026-27 (Apr-Mar).

 

The expensive acquisition led to the company reporting a net-debt-to-EBITDA ratio of 2.7 times in the June quarter. Torrent Pharma will continue to look at more inorganic growth opportunities, but not ones that will push the leverage ratio beyond 3.5 times. Additionally, the company's medical representative count after the integration has grown to 9,300, which Torrent Pharma's management expects to reduce to 9,000 by the end of the September quarter.

 

Speaking of its branded generics-dominant US market, the management said, "(The) US has been stable, and this year we would be a profitable entity in the US, which was unlike what it has been in the last five years." Revenue growth in the US is on a stable trajectory and "it will only get better from here, both in terms of top line and in terms of bottom line contribution to Torrent (Pharma)," the management said.

 

Torrent Pharma reported its June quarter earnings after market hours Thursday. Its shares ended almost unchanged from Wednesday at INR 4,872.10 apiece on the National Stock Exchange.  End

 

Edited by Rajeev Pai

 

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