Torrent Pharmaceuticals Limited

Torrent Pharmaceuticals reported a robust Q4 FY26 with consolidated revenue of INR 4,197 crores, marking a 42% year-on-year increase. Operating EBITDA grew 41% to INR 1,356 crores, maintaining a healthy combined operating EBITDA margin of 32.3%. For the full fiscal year 2026, overall revenue grew 15%, with EBITDA margins sustained at 32.7% and operating EBITDA also growing 16%. The net debt to EBITDA, considering JB Pharma's full-year EBITDA for FY25-26, stood at 2.3x.

The India business revenue for Q4 FY26 stood at INR 2,215 crores, a 43% growth. Torrent's base business, excluding JB Pharma, grew 15% during the quarter, significantly outperforming the Indian Pharmaceutical Market (IPM) growth of 10% as per PharmaTrac data. The Curatio business was a strong performer, growing 27% in FY26, driven by robust demand generation through OTC ad spends and field force expansion. The company expects to continue its field force expansion in the upcoming financial year, building on the 7,100 reps (ex-JB) at year-end.

The Brazil branded generic market recorded BRL 259 million in Q4 constant currency revenue, an 11% year-on-year growth, with IQVIA data showing Torrent growing 17% against a market growth of 6%. New launches like Rosuvastatin and Ezetimibe are gaining traction, and 58 molecules are awaiting ANVISA approval. In contrast, the German business saw a 1% decline in constant currency revenue to EUR 31 million, impacted by third-party supplier disruptions. The US business grew 9% in constant currency to USD 38 million, benefiting from new launches and increased purchase volumes.

The merger of JB Pharma with Torrent is in its final stages, having received requisite shareholder approval. Management reiterated a synergy target of INR 400-450 crores by year three, with approximately 20% expected in the first year. Early indications suggest that the margin trajectory is tracking ahead of expectations, with some cost savings realized sooner than anticipated. A one-off^📎 acquisition charge of INR 46 crores for Torrent and INR 19 crores for JB was recorded in this quarter.

Torrent is actively pursuing new product launches in India, including being the first to market with generic Brexpiprazole in April, a moderate-sized opportunity in the CNS segment. The company is also conducting a Phase 3 clinical trial for Resmetirom for NASH, a large-sized opportunity, with a potential launch 12-18 months post-patent expiry after patent expiration. R&D spend for FY26 was about 5% of sales, with an incremental 0.5% expected in FY27, primarily directed towards India and US markets, reflecting a ramp-up in R&D pipeline and spending.

The Semaglutide launch in India has been very successful, with Torrent holding 38% share among generic players in April, including 100% share in the oral format and 28% in the injectable format. Total sales for Semaglutide in April were INR 17 crores (INR 6 crores oral, INR 11 crores injectable). While initial gross margins for both injectable and oral formats are lower due to higher API prices at launch, management expects them to improve, with oral API prices anticipated to reach a reasonably high level within 6-12 months, and overall Semaglutide EBITDA margins expected to start reversing by next year.

For FY27, the company anticipates mid-teens organic growth for its India business, assuming no external demand shocks. Brazil is projected to achieve 10-15% top-line growth in FY27. In Germany, a low single-digit growth (below 5% in constant currency) is expected for the next year. Torrent plans to expand its India MR force to 7,500 by FY27 and is exploring biosimilar opportunities in Europe, aligning with the market's shift towards tender-driven, substitutable products, with first tenders expected in June-July.