Torrent Pharma Q3 PAT skyrockets 3- times; declares interim dividend

Ahmedabad based drug major Torrent Pharmaceuticals posted its Q3FY16 results on Thursday evening after market hours. Company posted a stupendous set of numbers as profits zoomed up 3- times to Rs 483 crore led by growth in US markets with the launch of new drugs.

Company’s consolidated total revenue from operation stand at Rs 1539 crore in comparison to Rs 1168 crore attained in the corresponding quarter of the previous fiscal, representing a strong growth of 31.76 per cent on a yearly basis. Sales for the quarter in review was higher on account of new drug launches in the US markets, which currently has limited competition for the drugs.

Operationally too company continued its good run as EBITDA increased by 155.42 per cent Y-O-Y  to Rs 613 crore as against Rs 240 crore in the same quarter of the last fiscal. Strong operational profits were aided by decrease in key expenses. Consumption of raw material as a percentage to sales saw a decline of 340 basis points on a yearly basis. Other expenses too saw a decrease of 795 basis points to 22.61 per cent. Margins almost doubled for the quarter in review to 39.83 per cent, as higher sales in US boosted its overall margins. Profit after tax for the December quarter amplified by more than 189 per cent to Rs 483 crore as against Rs 167 crore achieved in the same period of the last fiscal year.

In a separate filing, the firm said its board has approved an interim dividend of Rs 20 per equity share of Rs 5.

Revenue from foreign sales contributed 63 per cent to the total revenue of the company in Q3, demonstrating a growth of 48 per cent Y-O-Y, whereas Indian business operations added the residual 37 per cent towards the overall revenue, which saw a growth of 10 per cent on a yearly basis.

In the Branded Generic segment, domestic formulation business recorded a revenue of Rs 446 crore for Q3FY16, showing a growth of 7 per cent. Discontinuance of certain promotional schemes and hygiene initiatives has impacted the business in short term, however it will have a positive impact in the long run, according to the company. Brazil business remained a matter of deep concern for the company as it recorded a decline in revenue by 25 per cent mainly due to currency movements and realignment of channel inventory.

Generic business in the all-important US markets registered a remarkable growth of 226 per cent in Q3. US markets remain a key growth driver for the company with many drugs under the pipeline and awaiting regulatory approvals.

Responding to the Q3 results, Torrent Pharmaceuticals scrip opened with gains of almost 4 per cent to hit an intra-day high of Rs 1402 before profit booking by the investors bought down the stock.