Torrent Pharmaceuticals · tone and specificity signals across the available quarters.
Language signals
Our volume traction is ahead of the market. Our internal volume trend is positive. Our overall growth numbers, when you look at either the reported or the underlying growth, are close to 16%, so obviously, volume will be positive there.
This level [30.5% EBITDA margin] should be maintained for the rest of the year, for sure. Over and above that, there's some amount of improvement can still come.
Our key priorities remains our expansion in the branded generics market. All in all, we have added about close to 100 reps in the last 18 months. It's not going to be a disproportionate share of investment towards the US.
FY 2026, I think I should be net cash, right? And therefore, whatever EBITDA generation or cash flow generation is happening, that would await capital allocation to be done, right? And acquisitions have been a integral part of our growth story.
We would expect a response in the October timeframe from the FDA, and we think there's a high likelihood that the FDA would approve the plant, and the plant would be VAI or NAI. But we'd still like to wait and see, because there were five observations, and so we cannot be sure that it'll be 100%.
Pre-R&D expenses, we are break even, kind of break even for the U.S. business. That's what Sanjay was implying, that we want to move towards a profitable path, as far as U.S. is concerned, post R&D.
Minimum what we have reported in quarter one should continue for the rest of the quarters.
We are the fifth-largest generic company with about 6% of the German generic market. We have an aggressive growth strategy in terms of new launches and cost improvements of existing portfolio.
The MR additions take at least 12-18 months to onboard and kind of get familiarized... It is best to look at it from a two-year horizon rather than anything shorter than that.
The risk of trade generics cannibalizing branded generics is overestimated right now. In our view, the real market growth would be closer to around 7% or 8% this quarter.
We capitalized in the month of July. So all the costs pertaining to manufacturing is already captured as part of the gross margin, I would say or the EBITDA margin. So nothing incremental month-on-month, going forward from here.
In the U.S., we're just waiting for two things. One is for new molecules and new products to get approved from the Dahej... And as you know, Indrad, we've completed all the formalities. We're just waiting for inspection.
I don't expect the U.S. to ramp up anywhere very fast in the next two years. So we do have a few which might be a unique product, but we cannot predict because it depends upon the number of competitors that show up, and if we get CDMO or not.
As far as Germany is concerned, Germany is good, I would say, in terms of winning tenders, and there's good amount of visibility for the next two years.
The only thing which is why it is not going up on relative basis is that the spend on the U.S., we had lowered, right, and because of the internal issues which we've had, so I don't see substantial increase in R&D at least over the next one year.
We think the current infrastructure that we have would allow us reasonable opportunities to launch a few good products in the next, say, three-year period, five-year period. We are also looking at partnering for certain products in which capabilities we do not have today.
We think that because of this slightly prolonged period of no launches, we're in this position right now. Given the nature of the business in the U.S. and filing duration and approval uncertainty, your investment generally would take minimum three years, five years to show reasonable kind of movement in profitability.
Pricing growth has to be in line with the market growth. Some years it may be higher. Some years it may be lower. This year we felt this was the appropriate kind of price growth that maybe the market may allow. I think within this range, plus minus 1% or 2% should continue for the next couple of years.
Our operating EBITDA margins at 31.8% looks to be the new sustainable base going from here.
We are referring to positive operating profits before R&D. We are kind of breakeven I would say, at this point. From here, we should start looking up.
The focus has been to ensure that new product launch performance is the maximum possible. Our pipeline is robust, and our field force expansion, which has now been ongoing for the last 18-24 months, does give us enough headroom to continue the other market volume growth for the foreseeable coming quarters.
Our plan is to be there on day one of launch in GLP-1. Cannot comment on anything further at this stage, but that's certainly the endeavor. That's for India and for Brazil.
I don't know about 5x, but certainly there will be a gap between the existing products on the market, the tablets especially, and the injections, for example, in GLP-1. So that obviously reduces your addressable market overall, though it's still a large-sized market when you look at diabetes plus obesity put together.
I'm optimistic on Brazil, and I'm not as optimistic on India. So hopefully.
We have not looked at the revenue synergies yet. We'll wait for first year business top line to stabilize, and then we can look at revenue synergies.
JB's margin is closer to 28-29% EBITDA margin. I think our margin this year has been in the range of 32.5-33. So there is definitely a scope to bring JB's margin closer to our base business margin in the next financial year.
Germany revenues have declined by 6%, mainly due to the continued disruption at the third-party supplier. Unfortunately, Damayanti, I cannot give a timeline because our supplier is caught up in regulatory issues.
US should start contributing positively to the overall growth in FY 2025
We believe we should be well placed to grow a couple of percent, maybe 2-3% higher than IPM. In terms of growth breakup, we registered a growth of 15% in the AIS three data in Q4. The breakup of that is 3% volume, 8% price and 4% new products.
Over the medium term, we would anticipate a business of, say, $250 million-$300 million, if, you know, as new product launches come in.
Usually, end of quarter four, I try and avoid giving any guidance. And then based on quarter one results, it's more clearer where we are heading for.
The exact date is not certain, but it would most likely be in the first wave of any generic launch.
I would expect not much impact this year, more impact next year, and even higher impact in the year afterwards.