Torrent Pharmaceuticals (500420) Q2 24/25 earnings summary

Executive summary

• Branded businesses contributed 74% of Q2 FY25 revenue, with strong growth in India (13%), Brazil (17% in constant currency), Germany (8%), and the U.S. (8%).

• Consolidated revenue for Q2 FY25 was ₹2,889 crore, up from ₹2,660 crore in Q2 FY24; H1 FY25 revenue reached ₹5,748 crore, up from ₹5,251 crore.

• Net profit for Q2 FY25 was ₹453 crore, up from ₹386 crore in Q2 FY24; H1 FY25 net profit was ₹910 crore, up from ₹764 crore.

• The Board approved the results on October 25, 2024, with no auditor qualifications.

• Insulin revenues were impacted by a planned facility shutdown, with recovery expected in Q4 and no full-year impact.

Financial highlights

• Q2 FY25 revenue reached ₹2,889 crore, up 9% year-over-year; operating EBITDA was ₹939 crore, up 14%.

• Operating EBITDA margin stood at 32.5%, absorbing the cost of 300 new medical reps added this year.

• Adjusted for insulin impact, underlying revenue growth was 10% and operating EBITDA growth was 16%.

• Gross margin improved to above 75%, driven by a higher branded mix.

• Forex loss of ₹22 crore included in other income.

Outlook and guidance

• Insulin shortfall to be recovered in Q4, with no expected full-year revenue impact.

• India business expected to continue outperforming market growth, focusing on chronic therapies, new launches, and field force productivity.

• U.S. business expected to remain stable to slightly increasing, with slow ramp-up over the next two years.

• Brazil guided for double-digit top-line growth, outpacing market growth of 8-9%.

• Operating margin expected to improve by 50-100 basis points annually over the next three years.