Torrent Pharmaceuticals Ltd (TORNTPHARM) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator: Ladies and gentlemen, good day, and welcome to the Q2 FY '27 Earnings Conference Call of Torrent Pharma Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference call over to Mr. Sudhir Menon, Executive Director of Finance and CFO. Thank you, and over to you, sir.
Sudhir Menon (Torrent Pharmaceuticals Ltd): Thank you. Good evening, and welcome to Q2 FY '27 earnings call of Torrent Pharma. Consolidated revenues for quarter two were 4,979 crores, up by 51%, while operating EBITDA at 1,666 crores was up by 54%. Operating EBITDA margin for the quarter stood at 33.5%. During the quarter, R&D spend increased to 4.2% of the revenue, compared to 3.5% in the previous quarter. As highlighted in the previous call, following the merger of JB with Torrent Pharma with effect from 8th of July, we had undertaken business level integration during this quarter and as guided earlier, there were some transient impact on JB business topline performance during the quarter. During the quarter, the underlying JB business reported revenues of 1,086, which was largely flat year-on-year. JB's India branded business grew at 7% for the quarter. International business were down by 7%. Torrent base business continued its strong growth momentum with revenues growing 18% for the quarter.
Sudhir Menon (Torrent Pharmaceuticals Ltd): Now stand at 1.8X. I will now hand over the call to Aman for an update on India business.
Aman (Torrent Pharmaceuticals Ltd): Thanks Sudhir. I will first talk about the JB integration update. Post the completion of merger in July 2026, we had initiated the next stage of integration activities which involved merging of divisions and field force in the India business. We believe this has been executed well and as per expectations. Despite the nature of integration activities, the India business of JB delivered robust underlying growth which provides comfort in the long-term growth prospects of the business post recovery. JB's international operations saw an impact from, again, the integration around plant network optimization and alignment of manufacturing and quality control systems. This led to postponement of deliveries in some in certain markets and we see a gradual path to recovery in the subsequent quarters. We believe the impact is transient due to one time nature of integration requirements which were unavoidable. The objective here was to harmonize Torrent and JB systems, reduce redundancies and enable long term utilization and gross margin efficiencies. On overall cost energies, we are tracking well ahead of our plan which can also be seen from the EBITDA margin during this quarter. Sequentially, the JB business EBITDA margins have improved despite the the transient impact on sales. Moving on to the base business, Torrent's India revenue for Q2 were 2181 crores registering a growth of 20% versus the IPM growth of 12% as per the PharmaTrac data set. The high growth was delivered as a result of an overall increase in IPM growth, new launch performance and volume growth ex acceleration from field force expansion. The Curatio business continued its strong growth trajectory growing at 34% in Q2 and also in H1 driven by OTC ad spends and field force expansion. We are hopeful that this business should continue with a similar high growth trajectory for the rest of the year. Our combined field force strength at the end of Q2 for Torrent + JB the combined entity is now 9,100 in the India business. On semaglutide, our India franchise recorded Q2 market share of 32% for the oral and injectable combined as per the PharmaTrac data set. For the oral segment, we continue to maintain more than 90% share within the generic players. In the injectable semaglutide segment, following the supply disruption we were able to onboard a new manufacturing partner and fully restored market supplies by September. Due to being out of the market for nearly 2 months, we did see some market share loss minor market share share loss in the injectable space. However, the September month relaunch and sales recovery provide confidence that a large part of this loss should be recovered in the coming months. Our focus during H2 FY 2027 will be to continue improve improving our market share in focus therapies, improving field force productivity in expanded divisions, and continuing the scale up of the Curatio business. I'll now hand over to Mr. Sanjay Gupta for the international business. Thanks Aman. We will start with the branded
Sanjay Gupta (Torrent Pharmaceuticals Ltd): generic market of Brazil. Based on internal sales, Q2 constant currency revenues were at Brazilian real 436 million registering a 21% year on year growth. IQVIA data shows Q2 market growth at 5.7% with Torrent growing at 26%. This is aided by the strong performance of our top brands, our recent launches as and as well as the strong growth in generic division. In Brazil, Torrent has a rich pipeline of 53 molecules under ANVISA review and we should be getting we expect approval in the next three years. In the US, we registered constant currency revenues of $44 million, up by 13%. Growth is coming from our new launches where we have achieved or exceeded our target market share. In Germany, our business registered a constant currency revenue of 26 million, down by 13%. The growth continues to be impacted by the loss of high-value tenders and disruption at third-party suppliers. With that, I would like to conclude the opening comments and open the call up for questions.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.
Moderator: The first question is from the line of Neha Manpuria from Bank of America. Please go ahead.
Neha Manpuria (Bank of America): Yeah. Thanks for taking my question. My first question is on the JB. Given the disruption of the impact on growth because of disruption, if you could give us some color in terms of how we should think about the recovery, both in the India business, and also I think you mentioned some postponement of supplies in certain markets. You know would that takes you know, slightly longer to recover? You know just wondering you know, the flat growth that we've seen, should we continue to see similar trends you know, in the near term or we start seeing improvement here?
Aman (Torrent Pharmaceuticals Ltd): Yes, on the India side we have guided in the earlier quarter that this would be the kind of impact that we estimated. It's been pretty much in line with you know how Q1 was at 13%, Q2 at 7%. So, it's more or less been as expected. And we think this will recover gradually quarter-on-quarter from here. So, if H1 is at 10% growth for the India branded business, I would expect that H2 should be perhaps higher than that. On the international front, yes, there are definitely some one-time challenges that we've faced and it was part of the integration that we had taken a call to to take these decisions. These are all one-time in nature. So while the actions have been taken, the recovery may take slightly longer in the international business. But overall, we still feel that in H2, the overall JB growth should be double-digit. While India would be higher than double-digit, we believe the the total JB business growth should recover to double-digit in H2.
Neha Manpuria (Bank of America): Okay. That's good to know. And my second question is you know, you mentioned cost synergies are running ahead of expectations. I think our estimate was about 450 crores. It seems like, you know, pretty much half of that is already reflected in margins. Would that be a fair assumption and given that Sudhir, is there an upside to our cost synergy number that we are expecting over the next 3 years?
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