Torrent Pharma Q1 net grows marginally by 3% as price erosion in US weighs

Price erosion in its base business in the US market dragged down the first quarter performance of the new fiscal year 2021-22 for Torrent Pharmaceuticals Ltd as its consolidated net profit rose marginally by three per cent.

As compared to a profit after tax (PAT) of Rs 321 crore in Q1 of previous financial year 2020-21, Torrent Pharma posted a PAT of Rs 320 crore for Q1 of current fiscal year FY22. The company's revenues also grew in single digits at four per cent, from Rs 2,056 crore in Q1 of FY21 to Rs 2,134 crore in Q1 of FY22.

While India, which forms the largest market for Torrent Pharma, grew by 18 per cent during the quarter to Rs 1,093 crore, the US revenues fell by 29 per cent to Rs 266 crore. Last year, the quarter ended June 30, 2020 had seen Torrent Pharma post India revenues at Rs 925 crore and US revenues at Rs 373 crore.

As per AIOCD data, Torrent’s Q1FY22 growth was 24 per cent as compared to 37 per cent growth of the Indian Pharmaceutical Market (IPM), wherein the latter's growth during the quarter included high contribution from Covid treatments and a low base last year. Among Covid drugs, the quarter also saw Torrent launch baricitinib and is currently conducting clinical trials for molnupiravir even as more partnerships are under evaluation to widen its Covid portfolio.

On the other hand, sales were lower in the US market due to price erosion in the base business and lack of new approvals pending re-inspection of facilities. As on June 30, 2021, 54 abbreviated new drug applications (ANDAs) were pending for approval with USFDA and seven tentative approvals were received, including one tentative approval received during the quarter.

Other top markets for Torrent Pharma include Brazil and Germany which grew by nine per cent and five per cent, respectively. While Brazil revenues stood at Rs 153 crore during the quarter, that for Germany was around Rs 260 crore, even as the company saw growth momentum in both the branded and generic segment in Brazil.

Meanwhile, the company's research and development (R&D) spend grew by 16 per cent year-on-year (YoY) in Q1 of FY'22 to stand at Rs 125 crore, up from Rs 108 crore in the corresponding period last year.