Torrent Pharma posts Rs 118 cr Q4 loss vs Rs 324 cr profit a year ago

The red line comes amid headwinds in EU operatopns and discontinuation of liquids business in the US; revenue, however, grows by 10%

On the back of headwinds in its EU business and discontinuation of liquids business in the US, Torrent Pharmaceuticals Ltd. (TPL) posted a net loss of Rs 118 crore for the fourth quarter ended March 31, 2022. On a year-on-year (YoY) basis, the company had registered a profit after tax (PAT) of Rs 324 crore in the corresponding quarter of last year.

The company's revenue, however, grew by 10 per cent to Rs 2,131 crore in Q4 of FY22 aided by strong growth momentum in branded generic markets. Torrent Pharma's revenue for Q4 FY21 was Rs 1937 crore. On an annual basis too, the company's PAT fell by 38 per cent to Rs 777 crore for full FY22 from Rs 1,252 crore in FY21.

Revenue for the full financial year was up six per cent to Rs 8,508 crore in FY22 from Rs 8,005 crore a year ago.

The company had to bear an exceptional item of Rs 485 crore on account of impairment provision and costs related to discontinuation of liquid business in the US.

"We have taken the difficult decision of discontinuing our liquids business in the US. We believe the incremental investments required will exceed the potential economic benefits in this segment due to changing market conditions, as economics and competitive intensity have turned unfavorable compared to the time of conceptualization," said Samir Mehta, Chairman, Torrent Pharmaceuticals Ltd.

According to Mehta, the branded businesses contributed to 70 per cent of total revenues in Q4 and grew by 15 per cent with India and Brazil continuing on a strong footing. The US business registered sequential growth aided mainly by launch of a new product.

"While our EU business faced some headwinds, we remain optimistic that the cost efficiency measures being taken will bring us back to growth in this market in the coming quarters," Mehta added.

Aided by new launch momentum, robust performance of top brands and continued market outperformance across focus therapies, the company's India revenue grew by 12 per cent to Rs 1,034 crore during the quarter. Brazil posted the second best growth at 33 per cent to Rs 251 crore revenue in Q4 on the back of strong growth and market outperformance complemented by performance of top brands and new launches.

Torrent Pharma's US revenue was up five per cent to Rs 282 crore in Q4 even as the company considered discontinuing the liquid facility operations. The operational cost of the facility has been at Rs 135 crore per annum.

As on March 31, 2022, Torrent Pharma had 57 abbreviated new drug applications (ANDAs) pending approval with US FDA and five tentative approvals received in Q4. During the quarter, six ANDAs were filed while one was approved.

Meanwhile, its German operations were down 18 per cent to Rs 218 crore in Q4, impacted by loss of products in a recent tender.

The company's research and development (R&D) fell by seven per cent YoY to Rs 138 crore during Q4FY22 from Rs 148 crore a year ago. The FY22 R&D spend rose by six per cent to Rs 516 crore from Rs 487 crore in FY21.