Torrent Pharmaceuticals Ltd Q1 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Neha Manpuria - BofA Global Research - Analyst : Yes. Thanks for taking my question. Aman, my first question is on the India business. We saw 15% growth in this quarter, which seems pretty strong, given we already have Curatio in the base. Could you give us some color on how we should assume growth for the India business? Is this growth rate stable? And also, any color that you can give us on the Curatio asset that now it has been fully integrated, what's the traction that we are seeing there?

Question: Neha Manpuria - BofA Global Research - Analyst : Understood. That's helpful. And Sudhir, on the margins, gross margin expansion, again this quarter, was pretty significant, if I look at it from a quarter-to-quarter, year-on-year perspective. How much of this is sustainable? Is that -- is this the level we should be able to maintain? I understand there's some mix benefit because of higher India growth this quarter. And also, if you could give us some color on what the INR20 crore one-off was related to?

Question: Neha Manpuria - BofA Global Research - Analyst : Okay. Got it. And sorry, if I may squeeze in one more. I know I might sound like a broken tape here, Sudhir. But, capital allocation, how should we think about it? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Neha Manpuria - BofA Global Research - Analyst : And given that you mentioned we -- there was an international opportunity that we were pursuing, it's fair to assume that we are also open looking at larger deals outside of India? And which focus markets would these be in then?

Question: Neha Manpuria - BofA Global Research - Analyst : Understood. Thank you so much, Sudhir.

Question: Damayanti Kerai - HSBC - Analyst : Hi. Good evening. And thank you for the opportunity. My first question is on the US business. So quarter-on-quarter, it's broadly stable. So just wanted to understand how supplies from Dahej plant is picking up? Because Indrad is yet to clear. So I assume when we got clearance for Dahej, there was expectation of better pickup to happen here. So some color on the US business, please.

Question: Damayanti Kerai - HSBC - Analyst : So are we expecting like run rate to pick up slightly better than what is the trend in the last two quarters or so? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Damayanti Kerai - HSBC - Analyst : Sure. And you mentioned one of the objectives for this year is to grow profitability of US business. So right now, it's profitable or like it's a loss-making segment?

Question: Damayanti Kerai - HSBC - Analyst : I was asking one of the objectives, which you mentioned in your opening remarks, is improving profitability of the US business. So currently, I just want to understand whether it's profitable or it's a loss-making segment.

Question: Damayanti Kerai - HSBC - Analyst : Sure. And my second question on India business. So on the consumer health segment, if you can just talk about the progress in key brands. And what kind of marketing and promotional expenses you intend to incur for the brands there? Thanks.

Question: Damayanti Kerai - HSBC - Analyst : Okay. So A&P will broadly remain at the current quarter level, going ahead? And then, you intend to go like top line by better engagement, et cetera?

Question: Damayanti Kerai - HSBC - Analyst : Okay. And consumer is what percentage of India business right now, in terms of value contribution?

Question: Damayanti Kerai - HSBC - Analyst : That's very helpful. Thank you.

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : Thanks for the opportunity. Sir, just on the Germany business, if you could -- while already highlighted in the comments that you would pick up in the coming quarters. But broadly, what kind of sort of growth for FY25 one should think about for Germany business?

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : And also on Brazil, while I missed the opening remarks, wherein the floods have impacted, say, Q1. But let's say, on a full-year basis, how to think about the growth, given that we have a good number of launches plus an interesting launch, in 2Q of FY25? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : All right. That's it for me. Thank you.

Question: Saion Mukherjee - Nomura - Analyst : Hi. Good evening. Just one question on the acquisition. So if you're looking at international markets, are this -- are you interested in new markets? Are you looking at branded piece like what you have in Brazil? Or you would be interested in generics and some sort of technology acquisition? What are the areas that would interest you at this point?

Question: Saion Mukherjee - Nomura - Analyst : Okay. And would that be in the markets you already have presence, like Brazil, Mexico? Or you could look at completely new markets, where you would sort of set your base?

Question: Saion Mukherjee - Nomura - Analyst : Okay. The next question would be to Sanjay. Sanjay, I mean, I think a few quarters back, you mentioned US business, once the facilities are cleared, ramping up to 250 million or 200 million kind of an annualized revenue in two years or so. How do you assess that at this point? Do you think that's still achievable? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Saion Mukherjee - Nomura - Analyst : Okay. And the limited competition opportunities you expect in this fiscal or next fiscal?

Question: Saion Mukherjee - Nomura - Analyst : Okay. Good. And just one last question. Can you share your R&D number? And also, what's the expectation? Or what is it that you are factoring in as a full year spend?

Question: Saion Mukherjee - Nomura - Analyst : Okay. Thank you.

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Hi. Good evening. Thank you for the opportunity. Sir, in the domestic market, what is the MR count currently? And by FY25, how much do you plan to take it to? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Okay. And sir, second question is on the tax rate. So you still maintain 25% tax rate for the FY25?

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Okay. Thank you, sir.

Question: Vibha Ravi - Citeline - Analyst : So I just wanted to know what is the acquisition strategy going to be going forward? Whether the company will be looking at brands via slump sale? Or is it also looking at stake acquisitions from, say, promoters or from PE firms?

Question: Vibha Ravi - Citeline - Analyst : Okay. Thank you.

Question: Bansi Desai - JPMorgan - Analyst : Hi. Thank you for taking my question. My first question is on Indrad. We did see observations, and a couple of them were repeat in nature. So how should we think of resolution time frame for this particular plant of ours? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Bansi Desai - JPMorgan - Analyst : Okay. But response has gone from our side, and we are now awaiting FDA to kind of comment on that.

Question: Bansi Desai - JPMorgan - Analyst : Okay. Thanks for that. And my second question is on Curatio. You mentioned that even quarter-over-quarter, we have seen improvement in profitability there. Do we still have scope of improvement in that asset?

Question: Bansi Desai - JPMorgan - Analyst : Okay. Thank you so much.

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : Thanks for your question. Sir, just on price hikes in the India market, we've seen now almost three, four years where similar kind of price hikes have been taken at the portfolio level. Just like to understand how sustainable this is in terms of subsequently having the growth in India business based on the price hike.

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : Even largely on the similar set of the products within the portfolio, if you could clarify that?

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : Across the portfolio, across the therapies, there are different brands and products that like so past two years the kind of price hikes we have taken is broadly for the same set of products or brands or it's different in different years.

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : And just lastly on the US business, sales have been pretty stable quarter-over-quarter. Any comment on the price erosion on the base products?

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : And do you still continue to see the API prices falling for your US generics portfolio per se?

Question: Tushar Manudhane - Motilal Oswal Securities Ltd. - Analyst : Understood. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Neha Manpuria - BofA Global Research - Analyst : Thanks for taking my question, again. Aman, on the India business, if you were to hear the commentary and the strategy of some of the peers in the industry, everybody seems to be focusing on the chronic business. And we still see Torrent doing really well in the chronic segment. One, have we changed the approach of how we are continuing to gain market share, given competition? I know competition has always been there. But has there been any change and therefore, change in the way we look at the India business strategy? And is there a risk that either trade generic or the new competition could slow that growth in the chronic business? Just your views on the -- our chronic growth versus the competition.

Question: Neha Manpuria - BofA Global Research - Analyst : Understood. Thank you so much.

Question: Praful Bohra - Incred Capital - Analyst : Sudhir-bhai, the 12% to 13% growth that you mentioned in Brazil, this is in constant currency or the reported?

Question: Praful Bohra - Incred Capital - Analyst : Sudhir, the recent movement in Brazilian ReIal, it's almost come up from 16.5 to 14.9. How does this impact our overall growth numbers and the

Question: Praful Bohra - Incred Capital - Analyst : Sure. Thank you.

Question: Vibha Ravi - Citeline - Analyst : Hi. This is with relation to Takeda -- can you hear me?

Question: Vibha Ravi - Citeline - Analyst : Right. So this is with regard to the Vonoprazan deal. Since Takeda is now licensed to others like Zydus and Dr. Reddy's, so do you expect your growth trajectory, you spoke about positive response on launch. But how do you expect this trajectory to be affected? And second question is also in continuation kind of to what Neha has asked earlier. So do you expect -- you also spoke about more licensing deals. So do you expect them to be in the same areas that you're already currently strong? Or are you looking at certain white spaces where you would like to grow? Thanks.

Question: Vibha Ravi - Citeline - Analyst : Yes, it does. Thank you so much.

Question: Aarti Rai - Equentis Wealth Advisory Ltd. - Analyst : Hi. Thanks for taking my call. I just had a question around the margin. So during the last quarter, Q4, you did mentioned that there's a possibility of a margin expansion, say, around 50 basis points to 100 basis points. This was post, I mean, factoring for the consumer health business, the spends around that. And US being a very important driver at top and bottom line. So does that still hold true? Or there have been some changes there with respect to the margin expansion that we're looking at, for the full year?

Question: Aarti Rai - Equentis Wealth Advisory Ltd. - Analyst : So given -- I mean the question comes in light there, US sequentially remains flat. So -- and that was supposed to be one of the key drivers as well.

Question: Aarti Rai - Equentis Wealth Advisory Ltd. - Analyst : Okay. Thanks.

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Hi. Thank you for the opportunity. Sir, just one clarification on the US business. So you said that you expect the US business to be profitable post R&D. So by when? Is it next quarter? Or like can you please explain the timeline?

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Okay. And sir, for the next five to -- or the over 5 to 10 approvals that you were targeting, so it will be including oncology, right?

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Okay. And so apart from oncology also, are there other therapeutic areas, significant therapeutic areas?

Question: Sumit Gupta - Centrum Broking Private Limited - Analyst : Okay. Thank you.

Question: Shrikant Akolkar - Nuvama Group - Analyst : Hi. Good evening. Just one question on the domestic portfolio. The two products that we have in our portfolio, Unienzyme and Vizylac, both have been doing quite well. And in fact, in the ongoing quarter, we have done quite a strong growth. So if you can explain what is happening here? And how should we look at the future for these two products? Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JULY 23, 2024 / 1:00PM, TORP.NS - Q1 2025 Torrent Pharmaceuticals Ltd Earnings Call

Question: Abdulkader Puranwala - ICICI Securities Limited - Analyst : Thank you for the opportunity. Just one question. In your earlier remarks, you mentioned that Losar will slip to number three next year. So could you highlight which are the brands in the cardiac portfolio, which is growing faster? And when you're talking about derisking the entire cardiac portfolio, I mean going ahead, how should we look at it from a new product launches perspective? That's all.

Question: Abdulkader Puranwala - ICICI Securities Limited - Analyst : Understood. Thank you.

Question: Vibha Ravi - Citeline - Analyst : Please forgive me if you answered this question earlier, but at least I didn't hear it on this call. So the 10G plan ports to begin commercial production from the first quarter -- from this quarter, right, Q1 FY25? So has that happened, if you can give us an update on that? And second is, what is the reason of transferring antibiotic and -- move on antibiotic business to (inaudible) India?

Question: Vibha Ravi - Citeline - Analyst : Yes. I said please forgive me if you answered this question I'm asking right now earlier. But the penicillin plant was to begin commercial production in the first quarter which is the quarter you're talking about, right? Has that happened, if you could give us an update on that? And second --

Question: Vibha Ravi - Citeline - Analyst : Please forgive me for the question. Yes, that's it. I don't have a question then. I apologize. Thank you.