Cipla vs Torrent Pharmaceuticals Q3 FY26

Cipla's Q3 FY26 revenue was flat YoY at INR 7,074 crore, with EBITDA margin of 17.7% (down ~150-200bps vs internal expectations) due to lower generic revenues and elevated R&D spend (7% of sales, +37% YoY). PAT of INR 676 crore included a one-time INR 276 crore labor code charge. U.S. revenue fell to $167 million as Lenalidomide tapered and lanreotide supply was disrupted (partner Pharmathen paused production after FDA observations; resupply expected H1 FY27). India business grew 10% YoY, with respiratory crossing INR 5,000 crore. FY26 EBITDA margin guidance revised to ~21%. Key upcoming U.S. launches (4 respiratory, 4 peptide assets) are expected to offset revenue declines, but near-term headwinds persist. Risk: lanreotide disruption may extend beyond H1 FY27 if remediation is delayed.

Guidance read

FY26 EBITDA margin guidance revised to ~21%: Management lowered FY26 EBITDA margin guidance to ~21% from earlier expectations, citing lower lanreotide and Lenalidomide impact. U.S. launches: 4 respiratory and 4 peptide assets in FY27: Pipeline includes generic Advair, two other large respiratory assets (likely Symbicort), and three peptide launches including generic Victoza. Lanreotide resupply expected in H1 FY27: Partner Pharmathen paused production; resupply expected in H1 FY27, with alternate site evaluation underway. FY27 guidance to be provided next quarter: Management will provide FY27 guidance after finalizing the annual operating plan.

Risk read

Key risks include Lanreotide supply disruption may extend beyond H1 FY27 — Pharmathen's manufacturing pause and 483 observations could delay resupply, impacting U.S. revenue.; U.S. launch pipeline may face delays or competition — Respiratory and peptide launches are critical to offset Lenalidomide decline; any delay or increased competition could pressure revenue.; Elevated R&D spend may persist, pressuring margins — R&D at 7% of revenue is above historical 5-6% range; management expects normalization but lumpy spending could continue.; Semaglutide generic launch could impact tirzepatide uptake — Analyst questioned whether Cipla's agreement with Lilly restricts entry into semaglutide; management was evasive..

Promise ledger

Of 1 tracked promise, management 0 met, 0 close, 1 missed.

TO

Torrent Pharmaceuticals

Q3 FY26 · Healthcare

Torrent Pharma delivered a strong Q3 FY26 with 18% revenue growth to ₹3,333 crore and 19% EBITDA growth to ₹1,088 crore, driven by double-digit expansion in India (+14%) and Brazil (+27% reported, +10% constant currency). The US business grew 19% (12% constant currency) to $36 million, while Germany declined 6% constant currency due to a third-party supplier disruption. The JB Pharma acquisition (48.8% stake) closed in January, with cost synergies of ₹400-450 crore targeted over 2-3 years, though Q4 may see a muted impact from integration. Management expects India to continue outperforming the IPM, and US sales to cross $200 million annually next year. Key risk: Germany supply disruption remains unresolved, with no clear timeline for resolution.

Guidance read

India business to continue outperforming IPM: Management expects India revenue growth to remain above the IPM growth rate, driven by volume outperformance in chronic therapies. US revenue to cross $200 million annually next year: Management targets US annual revenue exceeding $200 million in FY27, driven by 5-7 new launches per year. JB Pharma cost synergies of ₹400-450 crore over 2-3 years: Cost synergies from JB acquisition expected to be ₹400-450 crore, with ~20% in first year, up to 80% in second year, and rest in third. Brazil growth target of 10-15% over next 2-3 years: Brazil business expected to grow 10-15% driven by new product launches and moderate price increases.

Risk read

Key risks include Germany supply disruption unresolved — Third-party supplier disruption continues with no clear timeline for resolution; alternative supplier may take 3-4 quarters.; JB Pharma integration disruption in Q4 — Management expects Q4 to be muted due to change of control and process integration, potentially impacting sales.; GLP-1 launch delays in Brazil — Semaglutide launch delayed to next financial year; regulatory approval timeline uncertain despite prioritization.; US growth dependent on launch timing and competition — US revenue growth is contingent on timely new launches and competitive landscape, which are unpredictable..

Promise ledger

Scorecard data is being built as historical quarters are processed.