Torrent Pharmaceuticals (500420) Q1 26/27 earnings summary

Executive summary

• Consolidated revenues reached INR 4,921 crore, up 55% year-over-year, driven by strong India and international growth and the integration of JB Pharma.

• Operating EBITDA rose 61% YoY to INR 1,664 crore, with margins at 33.8%.

• Net profit after tax stood at INR 566 crore, up 3% YoY, reflecting higher operating leverage and scale.

• The merger of JB with Torrent Pharma was completed ahead of schedule, with integration activities and cost synergies progressing faster than planned.

• India business delivered 19% growth, outpacing the IPM's 12% growth, driven by new launches, volume growth, and field force expansion.

Financial highlights

• JB business reported revenues of INR 1,201 crore, up 10% YoY, with operating EBITDA of INR 424 crore and margin of 35.3%.

• Torrent-based business revenues grew 17% YoY; operating EBITDA was INR 1,240 crore, up 20%, with margin at 33.3%.

• Gross margin improved to 78% in the base business and 76.4% overall, driven by price increases and favorable forex.

• R&D spend increased 10% YoY to INR 172 crore, representing 4% of revenue.

• Exceptional items of INR 21 crore included regulatory fees and inventory write-off due to a fire at a JB Pharma warehouse.

Outlook and guidance

• High single-digit to low double-digit constant currency growth expected for the full year.

• Double-digit revenue growth for JB's India Rx business anticipated for FY 2027.

• Revenue synergies from the merger are expected to materialize from next year, post full integration.

• Cost synergy realization expected to increase quarter-on-quarter, with no essential cost cuts impacting growth.

• India and international markets, especially US and Brazil, are projected to maintain momentum due to new launches and robust demand.