TORRENT PHARMACEUTICALS Ltd - QUARTERLY RESULTS - Q2 FY 15 ( SPE 2014) - Net Sales up 29% Net Profit Up 75% YoY

TORRENT PHARMACEUTICALS LIMITED

SAMIR MEHTA,CHAIRMAN

QUARTERLY RESULTS

Q2 FY 15 ( SPE 2014)

TORRENT PHARAM has posted impressive results for Q2 FY 15.

Net Sales have increased 10% QoQ and 29% YoY.

Total expenses have increased steeply, more than proportionately by 27% QoQ and less than proportionately by 23% YoY.

Consequently, operating profit has decreased by 33% QoQ and increased by 38% YoY.

Profit Before Tax has also fallen by 33% QoQ and increased by 55% YoY.

Due to Lower Tax, Net Profit has fallen only by 23% QoQ and increased impressively by 75% YoY. Thus, the year on Year performance, which is more relevant has grown by 75%. 

As per the Press release, the business of Elder pharma acquired by the company has also recorded impressive growth during the first half of current year.

We can expect better and more impressive performances from Torrent Pharma in the future.

RESULTS TABLE

Torrent Pharma	Q2 FY 15	Q1 FY 15	Dif % QoQ	Q2 FY14	Dif% YoY
NET SALES	1203	1092	10.16	936	28.53
TOTAL INCOME	1217	1114	9.25	972	25.21
TOTAL EXPENSES	1000	790	26.58	815	22.7
OPT	217	324	-33.02	157	38.22
PBT	235	349	-32.66	152	54.61
TAX	37	93	-60.22	39	-5.13
NPT	198	256	-22.66	113	75.22
EQUITY(fv.rs.5)	85	85	0	85	0
EPS	11.69	15.12	-22.69	6.64	76.05

Corporate Profile ::

Torrent Pharma, the flagship company of Torrent Group, is ranked amongst the top pharma companies of India. It is a dominant player in the therapeutic areas of cardiovascular (CV) and central nervous system (CNS) and has achieved significant presence in gastro-intestinal, diabetology, anti-infective and pain management segments. 

Recently it has also forayed into the oncology therapeutic segment while also strengthening its focus on gynecology and pediatric segments.

It has three world-class manufacturing facilities at Indrad (Gujarat), Baddi (Himachal Pradesh) and Sikkim. The facilities are approved by USFDA, WHO, MHRA, TGA and other global regulatory bodies. A new facility is taking shape at Dahej SEZ in Western India, which will cater to the international markets.Torrent Pharma is the sole manufacturer of Insulin Formulations for Novo Nordisk in India since the early ‘90s and has also set up a dedicated formulation and packaging facility for Insulin. 

Its modern and well-equipped R&D Centre is ranked amongst the best in the country and has a team of highly qualified scientists working on various Drug Discovery and Development projects. The R&D Centre has been approved by USFDA and various other regulatory authorities. 

Recently, Torrent Pharma acquired the branded domestic formulations business of Elder Pharmaceuticals in India and Nepal. The acquisition comprises a portfolio of 30 brands including market-leading brands in the Women's Healthcare, Pain Management, Wound Care and Nutraceuticals therapeutic segments. The transaction also involves the transfer of employees engaged in sales, marketing and operations of the India Business.

Torrent Pharma has a strong international presence spanning over 70 countries across five continents with over 1200 product registrations. It has wholly owned subsidiaries in USA, UK, Germany, Brazil, Russia, Mexico, Philippines, Australia and other major markets. These wholly owned subsidiaries spearheads the company’s entry into several new regulated and semi regulated international markets.

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MARKSANS PHARMA LTD - QUARTERLY RESULTS - Q2 FY 15 (SEP 14) - NET SALES UP30.44% & NET PROFITS UP 54.19% YoY (CONSOLIDATED)

MARKSANS PHARMA LTD

QUARTERLY RESULTS

Q2 FY 15 (SEP 14)

CONSOLIDATED PERFORMANCE Q2 FY 15

MARKSANS has improved its financial performance considerably in Q2 FY 15 as can be seen from the Table below .

Ø Net Sales have gone up 30.44% YoY and Net Profit has gone up 54.19% YoY.

Ø The QoQ performance also is impressive. QoQ, Net sales has gone up by 4% Net profit by 22%

CONSOLIDATED RESULTS TABLE 
-In Millions.Rs.

MARKSANS	Q2 FY 15	Q1 FY 15	Dif % QoQ	Q2 FY14	Dif% YoY
NET SALES	2104.75	2023.95	3.99	1613.54	30.44
TOTAL INCOME	2105.39	2024.16	4.01	1613.79	30.46
TOTAL EXPENSES	1635.44	1636.57	-0.07	1348.98	21.24
OPT	469.95	387.59	21.25	264.81	77.47
PBT	422.08	352.21	19.84	224.87	87.7
TAX	105.49	93.03	13.39	19.55	439.59
NPT	316.59	259.18	22.15	205.32	54.19
EQUITY	385.32
EPS	0.81	0.66	22.73	0.52	55.77

Background

 Marksans Pharma Limited promoted by Mark Saldanha is a Manufacturer of generic pharmaceuticals across regulated markets – soft gelatin capsules & tablets in niche segments; Also undertakes Formulation CRAMS

 Export oriented business (exports contribute more than 99% of revenues) with a focus on regulated markets

 Supplies its products to 25+ countries globally with UK followed by US being its largest markets

 USFDA, UKMHRA & TGA accredited manufacturing facility for oral solids and soft gelatin capsules in Goa, India − UKMHRA approved manufacturing facility for Liquids / Ointments / Sachets at South Port, UK

 The business is classified under 4 heads: US Generics, UK / Australia Generics (Relonchem & Bells in UK and Nova in Australasia), CRAMS (external as well as for own subsidiaries) and ROW  Generics (CIS & South East Asia are key regions

Ø  Manufacturing facilities with global major regulatory accreditations

Ø  Well poised to capture the niche softgel opportunity

Ø  Expanding presence in the US market to be a key focus area

Ø  Targeting existing global markets for growth

Ø  Focused & experienced senior management team

Goa Plant - Capsules & Tablets

 Facility for manufacturing soft gelatin capsules & tablets

 Fully-automated unit spread across 18,000 sq. meters

 Generic pharmaceuticals manufactured from this facility are exported across the globe

 Fully automated packaging capabilities and a R&D centre that comprises of 3 key divisions for formulation development, devising analytical methods & conducting stability studies

 Employs 30+ staff in its R&D lab

Southport, UK Plant–Liquids, Ointments & Powders

 Primarily used to produce formulations (non-sterile liquids, ointments & powder products)

 Supplies to UK, West Africa & Middle East

How Marksans can effectively leverage the Softgels opportunity

An active Softgel player from India

: Marksans is currently one of the few active Indian firms focused on the Softgel segment

Differentiated offerings

: Focused on Softgels with a view to build a differentiated set of offerings in the crowded generics market

Selectively targeting the world’s biggest markets

: Filed SGC products in all major markets including USA, UK, Europe, Canada, Australia & Russia

Manufacturing capabilities with major approvals in place

: Marksan’s Goa SGC facility has various global regulatory approvals from USFDA, UKMHRA, TGA, etc

CRAMS : Leveraging R&D and manufacturing capabilities

 The CRAMS business broadly comprises: – External CRAMS

: Global pharmaceutical companies like Sandoz, Teva and Actavis

Subsidiary CRAMS

: MRKS’ subsidiary companies Relonchem , Bells, Nova etc.

 The CRAMS business with its strong margins is the largest contributor to the company’s EBITDA. With only a 26% contribution to the revenues, it adds 38% to consolidated EBITDA

 The Company undertakes selected contracts for highly specialized molecules, like narcotics, thus commanding higher margins than the industry average and hence offering better profitability

 Apart from taking manufacturing contracts for its own subsidiaries, it also has licensing agreements with other 6-7 MNCs for the next few years, including with leading players such as Teva , Sandoz and Actavis

Subsidiary CRAMS contributed 67% of the revenues in FY14

About Mr.Mark Saldanha

 Mr.Saldanha is the founder promoter of the company

 He is also the Chairman & Managing Director of Marksans

 A science graduate with more than two decades of experience across business and technical functions

 Prior to Marksans, he had been associated with Glenmark

Pharmaceuticals Ltd. as a Whole Time Director

BUSINESS STRATEGIES :

Focus on increasing sales from existing approved ANDAs (e.g., scale up contracts with branded retail players for Ibuprofen softgel)

 To be the first to file the product in the US aiming for Day 1 launch after patent expiry

 Tie up with the US pharma majors for exclusive supply & marketing arrangements

Set-up front end presence in the US

 Set up front-end presence in US, especially for the OTC segment in the near term, to maximize returns from fresh ANDA approvals in softgels expected over the next couple of years

Increase presence in Europe

 Expand presence in Europe, targeting other key markets besides UK such as Germany where Softgels as well as other pipeline products have a good market potential 

Continue building CRAMS Business

 Continue to build CRAMS business and expand CRAMS in regulated markets which could be at higher realizations and profitability

Explore out-licensing opportunities & Focus on drugs going off-patent

 Explore out-licensing opportunities for growth wherever the Company’s presence is limited

 Marksan’s Pharma is focusing on drugs going off patent between 2013 and 2018 

Inorganic Growth Strategies

 Initiatives already taken in this direction with the acquisitions of Bell’s, Relonchem & Nova

 Out-licensing ANDA’s to increase market penetration

 Leveraging manufacturing and R&D competencies in India (Low

-cost)

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