Torrent Pharma Q2 net drags 12% to Rs 1.7 bn on rupee decline, US recall

Torrent Pharmaceuticals posted a 12 per cent dip in net profit in the September quarter to Rs 1.7 billion, on the back of a product recall in the US causing a one-time impact of Rs 250 million, the rupee depreciation, as well as higher depreciation on account of acquired business.

Revenues for the quarter came in at Rs 18.94 billion, clocking 34 per cent growth year-on-year. The India business (including Unichem or acquired business) came in at Rs 8.1 billion (up 34 per cent YoY), while US revenues clocked a 54 per cent jump to Rs 3.9 billion. Seven abbreviated new drug approvals were filed during the quarter.

Gross margins during the quarter were at 71.1 per cent, up 0.6 per cent YoY. Ebitda stood at Rs 4.78 billion, up 25 per cent. Adjusted for a one-time product recall in the US, the Ebitda growth is 24 per cent and Ebitda margin 26.6 per cent. Torrent had to recall a hypertension drug in the US, as the active pharmaceutical ingredient — made by a Chinese firm — contained an impurity.

During the quarter, the research and development spend came in at Rs 1.3 billion, as against Rs 1 billion in Q2FY18.

For the half year period, revenues grew 36 per cent to Rs 37.6 billion, while net profit came in at Rs 3.4 billion as against Rs 3.9 billion in H1FY18.

The dip in net profit for the half year was due to depreciation, and amortisation cost being higher by Rs 1.38 billion, the product recall and rupee depreciation impact, said Torrent.