Detailed Narrative
India Chronic Business Outperformance
Torrent's India business grew by 13% to ₹1,632 crores, significantly outperforming the IPM growth of 8%. The chronic segment was a key driver, growing at 14% compared to the market's 9%, led by the cardiac division which grew 15%. Management attributes this to successful restructuring and divisional expansion undertaken last year.
Brazil Growth and Pipeline Strength
The Brazil business registered a strong 17% year-on-year growth in constant currency terms, reaching 174 million BRL. During the quarter, the company launched lisdexamfetamine for ADHD, targeting an 800 million BRL market. Torrent maintains a rich pipeline of 21 molecules filed and awaiting ANVISA approval to sustain double-digit growth.
Operational Efficiency and Margin Expansion
Operating EBITDA margins stood at 32.5%, even after absorbing the cost of 300 new medical representatives added this year. Management has guided for a consistent 50-100 bps annual margin improvement over the next three years. This expansion is expected to be driven by annual price increases in branded businesses and inherent operating leverage.
Aggressive Deleveraging Strategy
The company has made significant progress in debt reduction, repaying ₹900 crores in the first half of FY25. Gross debt has decreased from approximately ₹3,900 crores in March 2024 to ₹3,000 crores. Management expects to repay another ₹500-600 crores in H2 and aims to be net cash positive by FY26.
US Regulatory and Product Outlook
The US business delivered stable revenues of USD 32 million, up 7% in constant currency. Regulatory progress was noted with the Indrad facility receiving an EIR with VAI classification. However, management cautioned that US growth will be a 'slow ramp up' as most filed ANDAs are older, with mid-single digit approvals expected over the next 12 months.