- 28 Oct 2024
- ICICI Securities
TORRENT PHARMA Q2FY25- MARGIN IMPROVEMENT CONTINUES DESPITE REVENUE MODERATION
News: Revenues grew ~8% YoY to ₹ 2831 crore, mainly driven by growth in India and stable growth in Generics markets of Germany and the US. Brazil growth was lower due to adverse currency movement. EBITDA grew ~14% YoY to ₹ 939 crore driven by GPM improvement (~134 bps to 76.5%). EBITDA margins expanded by ~149 bps to 32.5%. PAT grew ~17% to ₹ 453 crore. India Business grew by 15% YoY to ₹ 1635 crore on the back of 8.5% price hike, 4% from new launches and 2.5% volume growth. Brazil Business grew mere 4% YoY to ₹ 263 crore but in constant currency terms the growth was a healthy 17%. Germany Business improved by 8% YoY to ₹ 28 crore complemented by new tenders. U.S Business grew by ~8 % YoY to ₹ 268 crore driven by some launches on a lower base. Others segment (which includes Insulin CDMO besides other EM markets) sales were negatively impacted due to planned shutdown in the month of August.
Views: Branded business performances continue to have strong correlation with the company’s margins (GPM and EBITDAM). India continues to perform well with focus on power brands besides consumer business foray. The company has added 300 MRs during the quarter and the plan is to improve the combined MR productivity to 9.50-10 lakh p.m. from the current 8-8.5 lakh p.m. in 18-24 month. Brazil numbers (excluding the flood impact) were driven by the launch of ADHD drug Lisdexanfetamine besides other launches and better generics performance. planned focus on branded generics and field force expansion. In Germany, the volatility has reduced due to normalcy in tender allocation. US situation is set to improve in FY25 on the back of favourable resolution of Dahej and Indrad plants. The management expects margin improvement momentum (50-100 bps every year) to persist as besides branded generic markets in India and Brazil, the future looks far better for generic markets of Germany and now US as well
Impact: Positive