In Q4FY23, Torrent Pharma’s revenues grew 16.9 per cent year-on-year (YoY) to Rs 2,491 crore, mainly driven by growth in India, Germany and Brazil markets. Earnings before interest, taxes, depreciation, and amortization (ebitda) increased 29.6 per cent YoY to Rs 727 Crore. Ebitda margins expanded by 286 bps to 29.2 per cent, due to change in revenue mix, higher revenues across geographies.
India revenue stood at Rs 1,257 crore, up 22 per cent YoY. The company said robust growth aided by strong performance of new launches in chronic therapies and integration of Curatio. Brazil revenue growth of 27 per cent YoY at Rs 318 crore, was complemented by strong underlying market growth, new launches and growth of generic segment. While, US revenue growth was down 1 per cent YoY at Rs 280 crore, impacted by price erosion on base portfolio and lack of new launches pending inspection of facilities.
Torrent’s branded generics business India continues to perform well with focus on curatio acquisition and focus on power brands besides consumer business foray. Brazil numbers beat our estimates driven by generic brands and CMS franchise. US continues to witness price erosion in high single digit, growth is due to low base and currency tailwinds. In Germany supplies for the tender has started, but it continues to witness price erosion in high single digit, ICICI Securities said.
The brokerage firm said it remains positive on the company’s branded generics business focus which is +70 per cent of sales now. The managment is looking for 60- 100 bps margins improvement banking on branded generics business traction.
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The company continues to focus on the branded generics business in its key markets of India/Brazil. The strategy of building a consumer healthcare segment in India would further enhance volume growth potential for certain established brands, Motilal Oswal Financial Services said.
While a successful resolution of compliance issues is vital for growth in US generics, it has outsourced certain products, which would aid growth in US generics to some extent. Having said this, the current valuation adequately captures the upside in earnings, the brokerage firm said in result update. It maintains Neutral rating on the stock.