Torrent Pharmaceuticals (500420) Q1 24/25 earnings summary

Executive summary

• Q1 FY25 revenue grew 10% year-over-year to INR 2,859 crore, with strong branded market performance in India and Brazil, and steady growth in Germany; U.S. business remained stable sequentially but declined year-over-year due to a high base.

• India business posted 15% growth, driven by chronic therapies and new launches, with Curatio fully integrated and showing 19% growth.

• Brazil's secondary sales grew double digits, but primary sales were impacted by floods and currency depreciation; normalization expected in Q2.

• Net profit attributable to owners for Q1 FY25 stood at ₹457 crore, compared to ₹378 crore in Q1 FY24 and ₹449 crore in Q4 FY24.

• The Board and Audit Committee approved the results on July 23, 2024, with no qualifications from auditors.

Financial highlights

• Operating EBITDA rose 14% year-over-year; EBITDA margin reached 32.3%.

• Net debt to EBITDA improved to 0.65x.

• Gross margin at 75.7%, with 0.7% improvement attributed to higher branded mix; 75% margin expected to be sustainable.

• R&D spend at 5% of sales, expected to remain stable for the year.

• Consolidated basic and diluted EPS for Q1 FY25 was ₹13.51, up from ₹11.18 in Q1 FY24.

Outlook and guidance

• India business expected to sustain low-teen growth for the rest of FY25.

• Germany projected to grow at mid- to high-single digits, with incremental tender wins.

• Brazil expected to grow 12-13% in constant currency, in line with market trends.

• U.S. business profitability targeted post-R&D, dependent on new product approvals over the next 2-3 years.

• Margin expansion of 50-100 bps for the full year reaffirmed.