Torrent Pharma’s Strategic Focus Powers Domestic Growth in Q3 FY25

Torrent Pharma reinforces its leadership in domestic formulations while focusing on operational efficiency and profitable growth across global markets, despite external challenges.

Torrent Pharmaceuticals (TRP) continues to strengthen its market position, achieving consistent growth in Q3 FY25, led by its robust domestic formulations (DF) business. The company navigated currency-related headwinds in Brazil and subdued activity in the US generics market, showcasing resilience through its strategic focus on profitable growth and market expansion.

Key Highlights of Q3 FY25 Performance
Adjusted PAT witnessed a significant 32% YoY growth, reaching ₹5 billion.
Domestic Formulations Driving Growth
Torrent Pharma reported an 11.7% YoY growth in DF revenue, reaching ₹15.8 billion, which accounted for 56% of total sales. The growth is attributed to:

• Strategic addition of medical representatives (MRs) to enhance market penetration.
• Continued expansion in the consumer health segment, contributing to sustained leadership in branded generics.

Stable International Operations Amid Challenges

• Germany: Sales increased by 4.4% YoY to ₹2.8 billion, supported by incremental tender wins in the European Union.
• US Generics: Stable at ₹2.7 billion (USD 32 million), reflecting consistent performance despite limited approvals, a critical market regulated by the US FDA.
• LATAM: Revenue declined by 6.7% YoY to ₹2.9 billion due to a 17% depreciation in the Brazilian Real (BRL).

Profitability Highlights

• Gross margins improved by 160 basis points (bps) YoY to 76%, driven by a favorable product mix.
• EBITDA margins rose by 70 bps YoY to 32.5%, reflecting effective cost optimization despite increased employee costs.
• Adjusted PAT witnessed a significant 32% YoY growth, reaching ₹5 billion.

Nine-Month Performance Snapshot (9M FY25)
Torrent Pharma’s consistent operational performance is evident in its 9M FY25 results, with:

• Revenue growth of 7.2% YoY to ₹85.6 billion.
• EBITDA growth of 11.8% YoY to ₹27.8 billion.
• PAT growth of 24.6% YoY to ₹14.3 billion.

Management Outlook: Strategic Focus for Q4 FY25

• Insulin Contract Manufacturing Operations (CMO): The delayed dispatch of insulin products will begin in January 2025, adding momentum to Q4 FY25 revenue.
• Brazil Market: Torrent Pharma is optimistic about 20 products under review with ANVISA, paving the way for future LATAM expansion.
• Germany: Expected high-single-digit growth in FY25, supported by recent tender wins.

Future Growth Drivers
Torrent Pharma is strategically positioned for growth, driven by:

1. Leadership in Domestic Formulations: Expanding reach through consumer health and medical representatives reinforces its top position in branded generics.
2. Operational Efficiency: Sustained EBITDA margins highlight the company’s cost management expertise.
3. Inorganic Opportunities: Torrent Pharma’s robust free cash flow (FCF) will reduce leverage and enable future acquisitions.

With a projected CAGR of 15% in revenue, 18% in EBITDA, and 28% in PAT over FY25-FY27, the company is on track for consistent and profitable growth.

Torrent Pharmaceuticals is a leading Indian company specializing in branded generics, with a strong presence in domestic formulations and key international markets like Germany, Brazil, and the US. With a commitment to innovation and operational excellence, Torrent Pharma continues to deliver high-quality healthcare solutions worldwide. At Prittle Prattle News, featuring you virtuously, we spotlight inspiring stories of innovation and resilience. Led by Editor-in-Chief Smruti Bhalerao, we are dedicated to delivering impactful narratives. Follow us on LinkedIn, Instagram, and YouTube.