Thank you. Good evening, and welcome to Quarter 2 FY 2027 earnings call of Torrent Pharma.

Consolidated revenues for Quarter 2 were ₹4,979 crores, up by 51%, while operating EBITDA at ₹1,666 crores was up by 54%. Operating EBITDA margin for the quarter stood at 33.5%.

During the quarter, R&D spend increased to 4.2% of the revenue, compared to 3.5% in the previous quarter. As highlighted in the previous call, following the merger of JB with Torrent Pharma with effect from 8th of July, we had undertaken business-level integration during this quarter.

As guided earlier, there were some transient impact on JB business topline performance during the quarter. During the quarter, the underlying JB business reported revenues of ₹1,086, which was largely flat year on year.

JB India branded business grew at 7% for the quarter. International business was down by 7%.

Torrent base business continued its strong growth momentum with revenues growing 18% for the quarter. The base India business with 20% growth continued to outperform IPM, while Brazil revenues were up 38%.

On the generic side, US delivered strong 24% growth, while Germany revenues were down by 7%. The overall leverage, that is net debt to EBITDA, now stands at 1.8x.

I'll now hand over the call to Aman for an update on India business.

Thanks, Sudhir. I'll first talk about the JB integration update.

Post the completion of merger in July 2026, we had initiated the next stage of integration activities, which involved merging of divisions and field force in the India business. We believe this has been executed well and as per expectations.

Despite the nature of integration activities, the India business of JB delivered robust underlying growth, which provides comfort in the long-term growth prospects of the business post-recovery. JB's international operations saw an impact from, again, the integration around plant network optimization and alignment of manufacturing and quality control systems.

This led to postponement of deliveries in some in certain markets, and we see a gradual path to recovery in the subsequent quarters. We believe the impact is transient due to one-time nature of integration requirements, which were unavoidable.

The objective here was to harmonize Torrent and JB systems, reduce redundancies, and enable long-term utilization and gross margin efficiencies. On overall cost synergies, we are tracking well ahead of our plan, which can also be seen from the EBITDA margins during this quarter.

Sequentially, the JB business EBITDA margins have improved despite the transient impact on sales. Moving on to the base business, Torrent's India revenues for Q2 were ₹2,181 crores, registering a growth of 20% versus the IPM growth of 12% as per the PharmaTrac dataset.

The high growth was delivered as a result of an overall increase in IPM growth, new launch performance, and volume growth acceleration from field force expansion. The Curatio business continued its strong growth trajectory, growing at 34% in Q2 and also in H1, driven by OTC ad spends and field force expansion.

We are hopeful that this business should continue a similar high growth trajectory for the rest of the year. Our combined field force strength at the end of Q2 for Torrent plus JB, the combined entity, is now 9,100 in the India business.

On semaglutide, our India franchise recorded Q2 market share of 32% for the oral and injectable combined, as per the PharmaTrac dataset. For the oral segment, we continue to maintain more than 90% share within the generic players.

In the injectable semaglutide segment, following the supply disruption, we were able to onboard a new manufacturing partner and fully restored market supply by September. Due to being out of the market for nearly two months, we did see some market share loss, minor market share loss in the injectable space.

However, the September month relaunch and sales recovery provide confidence that a large part of this loss should be recovered in the coming months. Our focus during H2 FY 2027 will be to continue improving our market share in focus therapies, improving field force productivity in expanded divisions, and continuing the scale-up of the Curatio business.

I'll now hand over to Mr. Sanjay Gupta for the international business.

Thanks, Aman. We will start with the branded generics market of Brazil.

Based on internal sales, Q2 constant currency revenues were at Brazilian reals 236 million, registering a 21% year-on-year growth. IQVIA data shows Q2 market growth at 5.7% with Torrent growing at 26%.

This is aided by the strong performance of our top brands, our recent launches, as well as the strong growth in the generics division. In Brazil, Torrent has a rich pipeline of 53 molecules under ANVISA review, and we expect approval in the next three years.

In the US, we registered constant currency revenues of $44 million, up by 13%. Growth is coming from our new launches, where we have achieved or exceeded our target market share.

In Germany, our business registered a constant currency revenue of €26 million, down by 13%. The growth continues to be impacted by the loss of high-value tenders and disruption at third-party suppliers.

With that, I would like to conclude the opening comments and open the call up for questions.

Thanks for taking my question. My first question is on JB.

Given the impact on growth because of disruption, if you could give us some color in terms of how we should think about the recovery both in the India business and also I think you mentioned some postponement of supplies in certain markets. Would that take slightly longer to recover?

Just wondering, the flat growth that we've seen, should continue to see similar trends in the near term, or we start seeing improvement here?

On the India side, we had guided in the earlier quarter that this would be the kind of impact that we estimated. It's been pretty much in line with how Q1 was at 13%, Q2 is at 7%.

It's more or less been as expected, and we think this will recover gradually quarter on quarter from here. If H1 is at 10% growth for the India branded business, I would expect that H2 should be perhaps higher than that.

On the international front, yes, there are definitely some one-time challenges that we faced, and it was part of the integration that we had taken a call to take these decisions. These are all one-time in nature.

While the actions have been taken, the recovery may take slightly longer in the international business. Overall, we still feel that in H2, the overall JB growth should be double-digit.

While India would be higher than double-digit, we believe the total JB business growth should recover to double-digit in H2.

That's good to know. My second question is, you mentioned cost synergies are running ahead of expectations.

I think our estimate was about ₹450 crores. It seems like pretty much half of that is already reflected in margins.

Would that be a fair assumption? Given that, Sudhir, is there an upside to our cost synergy number that we're expecting over the next three years?

Neha, I think you're right when you say we are tracking higher than what we had initially guided, and possibly when you say half of that seems to getting realized in this year, I think it's fair to assume that. Having said that, we believe most of it could come through by the next year.

Therefore, do you see upside from a three-year perspective? Some of the synergies that you were thinking probably'll take up later, probably on the revenue side, etc., does that come forward or revenue synergies will still take some more time outside of the cost?

No, I think we'll maintain the current synergy views on ₹450 crores. Perhaps next year, if there's a more concrete reason to believe there's further upside, we can comment say by Q1, Q2 next year.

Revenue synergies will we believe they should be on track for next year as well on the India business first and then followed by the international.

That's helpful. Thank you so much, Aman.

Hi, thank you for the opportunity. My question is again on JB.

You mentioned sequentially, despite the transient impact on the business, it reported higher EBITDA margins. Just wanted to understand what has led that sequential improvement, whether it was more on say the gross margin part or if it was more on rationalization of other operating expenses?

How should we look at the JB EBITDA margin in coming quarters? That's my first question.

I would say a large part of it was driven from the field force merger that has taken place. The savings are realized now, though the actions were taken from Jan and of course after the merger also, there were further steps taken.

It's largely driven from the India field force divisional merger that has been kind of implemented. Also, there has been further improvement in procurement savings as well.

That's a small part of overall sequential improvement. From Q1 to Q2, the biggest component is the field force savings.

Got it. How should we look at the margin trajectory for JB in second half of this year?

I would say it should continue gradual improvement as well from here as well. Difficult to give an exact number, but directionally, it's already improved substantially from Q4 last year to Q1, and now from Q1 to Q2, it's been more gradual.

I would expect quarter on quarter, this same run rate of improvement can continue maybe for the next two, three quarters.

Sure. My second question is clarity on your MR head count up to the merger.

You mentioned 9,100. Whether this is the level which we are looking to maintain, or there is some more room to optimize this number further?

Where do you like to have your MR count in optimum situation?

Yes, this year it will be maintained. By the end of this financial year, we don't expect any change.

We will review this maybe in a couple of months. We expect potentially some expansion may be required in the base business.

Say maybe by 500 MRs or so. We're not fully certain on what the next year's picture looks like, but it could be say something between 9,500 to 9,600.

Got it. My last question is on your overall guidance which you mentioned, 33 and a half kind of number we are seeing.

Should we assume there is more room to improve from current level, or it will be more steady, considering all the synergies, etc., which will come from the merger part?

I think there should be a gradual increase in the EBITDA margin. I think we're not guiding on the number part, but at least definitely we feel H2 should be a little higher than 33.5%.

Got it. Thank you, that's helpful.

I'll get back in the queue.

Hi, thank you for taking my question. First one on the JB EBITDA margin, which you suggested that there will be continued improvement from here as well for the next two, three quarters.

Once that is done, would it be fair to say that JB's India business profitability would be very similar to Torrent's India business?

Yes, that would be fair to assume. Torrent's India base business versus JB base business, right?

That's correct. Sure,

sure. On JB EBITDA margin this quarter, could you quantify the improvement on a sequential basis?

No, that's something which we are not guiding for.

Okay. Would it be meaningful, like 100 basis point plus or?

See,

I think there's two data points which I can one data point which I can give you, right? What we've said is the R&D expenses versus Quarter 1 has gone up by 0.7%.

Quarter 1 the overall EBITDA margin was 33.8% and this time it's 33.5%. That's one data point which I would like to give you.

Having said, the increase in R&D which has come in Quarter 2, we believe it will continue for the rest of the quarters as well. Sure, sure,

sure. Thanks for that.

Lastly on the synergies part, let's say cost synergies or initial guidance will be realized by FY 2028 is what my understanding is, what you commented, if I'm wrong, please correct me. Without quantifying beyond the let's say next year, what are some of the levers that you would have identified which is not part of your ₹450 crore guidance?

Secondly, you suggested the revenue synergies part for the next year. If you could quantify the impact of the revenue synergies and some of the levers.

Nothing incrementally new in terms of buckets that have been identified for cost synergies. Perhaps it's more of a quantum of costs that were estimated before and after, where there may be some variation.

That's where we feel it's still premature to comment whether there's any higher scope of cost synergies compared to the 450 number. Directionally, yes, we've been able to achieve that much faster.

Instead of three years, I think we should be able to get there in two years' time. Any upside to that, I think we'd wait for at least a couple more quarters.

On the revenue synergy side, again the same view. We believe that the India business, once now the large part of the integration is done, the revenue synergies should start gradually coming through from cross-selling, from new territories where JB brands are added to Torrent divisions, and so on.

These things normally take 6 to 12 months depending on the brand and the competitive intensity. I think next year should see a reasonable improvement in the topline growth through revenue synergies.

Difficult to quantify at this stage, but if things go as per plan and as we expect them, then I think gradually year on year, there should be acceleration in topline growth in the India business. On the international side, it will be a slightly longer journey for that to get achieved because product filings take slightly longer in most markets that we're looking at.

If say we're looking at JB territories to add some existing products that we have, those would take say two to three years to materialize. That's why the timelines may be longer.

That's extremely helpful. Thank you, and all the best.

deal that JB Chem has done with Novartis on the ophthalmology franchise. This was done, I think, about a couple of years back.

Hello, can you hear me well now?

Okay. Just a question on the ophthalmology portfolio deal that JB Chem had done with Novartis a couple of years back.

Is there any risk to that deal given the changes happening in Novartis India?

No, the contract is quite clear, I doubt there would be that possibility.

Okay. If I remember correctly, there is a second tranche of payment of about ₹950, ₹960 crores that is pending.

Would that be due anytime soon?

That would be in December of this year. Yes, that's right.

Okay. Great.

Thank you.

Thanks for taking my question, sir. On the increased R&D spend, and you said this is going to be sustainable from here on at these levels, any new avenues where we're looking to invest larger amounts than before, from a priority perspective?

No, this is in line with what we had shared earlier that we are looking at increasing our filings in the US, which are very low single digits right now to maybe high single digits for some years to kind of recover some of the lost time in the last couple of years due to our operational issues. In that sense, it's more of a temporary spend that would be required for a couple of years, two to three years.

In percentage spend, right now if this quarter is about 4.2% of revenues, we believe that the range should not exceed say between 4% to 4.5% even in the following year.

Got it. Sir, secondly on the export business, Brazil business has done well, Germany still struggled.

Any more color that you want to just provide us in terms of the outlook for these two markets?

Brazil, we are optimistic, it will continue to grow double-digit, mid-teens or in that range, because we have strong momentum from our new launches as well as from our other businesses. We have four business units in Brazil: cardio and diabetes, CNS, generics, and non-retail.

All four business units seem to be doing well. Again, a high level of optimism on Brazil.

On Germany, I would say that we are struggling because there's been quite a lot of factors which have impacted us, from supply-related issues to government-mandated price decreases, which have severely impacted our non-retail business, I really cannot give guidance today. Best case, I would say slight decline in the coming quarters and eventually some stability after maybe three or four quarters.

Okay. Then on the other markets with the ROW markets or the non-Brazilian branded markets, any broad color on how last three, four quarters, any meaningful changes in the size, scale of business in these businesses?

The rest of the world markets for us, our examples are Philippines, Mexico, Russia, South Africa now. All these markets are growing high single-digit or double-digit.

Underlying business is pretty strong in ROW markets. Let's say conservatively you can take 6% to 9% growth, non-JB total.

Then

lastly on any color on the sema launches in Brazil? Where are we in terms of what is the timeline if our outlook on our approvals and launches?

There is one true generic launch in Brazil, which is by a local very large player. It's been three months since they've launched and they've accelerated the growth of the market.

Optimistically, we expect to launch in the next 6 to 9 months.

Thank you so much.

Hi. Thank you for taking my question.

Can you show how large Curatio is now as part of your domestic business, because it's been growing very rapidly since you've acquired? Can you give some color, and how should we think about the growth here given all the initiatives going ahead with this?

I think this should be now between, say, 7% to 8% of the total base India business without JB. When we acquired it, it was about I think 4% to 5% contribution.

The contribution of the Curatio portfolio has increased quite a bit in the last two, three years. From where things are and the kind of strength that the brands have developed over the last couple of years through the additional marketing impetus, I think it should be possible to sustain high growth for at least a couple of years.

Difficult to say what range, but whether 30% growth can be sustained beyond say three to five years, that's difficult to say. Definitely, it's seen that the demand is real, and the trend is likely to continue for the foreseeable future.

Great, thank you. My other question was on the US.

We have seen some improvement with new product launches. How do you see the outlook?

I think last time you mentioned they are not many large, high-value launches. If you can just update on that for this year and next year at least.

Any comment you would like to make on pricing environment, market dynamics in general?

On the second part of your question, no major change in US market dynamics. We continue as before.

We've had a few good launches in the US. Our market shares, which we can consider in IQVIA, are actually above our expectations.

Which is why we are showing high rates of growth. The good part is that our filings have so far improved in the US.

Year to date, we've filed already four products, and we think we can file four to five at least more before this fiscal year ends. There is optimism in terms of new product launches.

I cannot give you color on the scale of these new launches. It will depend upon the number of competitors when these come to market, but they would keep up the momentum of new product launches, which is the most important factor for US growth.

I expect some new competitors on our recent launches in H2, there would be a pricing pressure increase in H2, which is not atypical in the US market, right? There's always new people coming with existing molecules and it leads to price erosion.

Price erosion and accompanied by volume growth and new launches should keep us in the positive territory as far as growth is concerned.

Right, sir. Thank you very much.

Thanks for the opportunity. Sir, firstly on semaglutide industry outlook, how do you see the growth in this molecule at industry level?

I think it's been stabilized now, the demand levels of generic semaglutide. I think what I recall is that we had estimated a market size of generic sema at somewhere around ₹800 crores for the first year.

It seems that it's on track to get there. Then after that, it should be in line with some of the earlier new launches how they've grown, which is a very high growth in the first couple of years of the market, followed by stabilization in say third or fourth year.

If you just take the past reference of say sitagliptin, where there is a shift happening from say an earlier gen molecule to something new, which is what we expect to happen here as well. It's again still very early to say what the market size may appear to be in 5 years or 4 to 5 years' time, but there's definitely a lot more room for market expansion from here as well.

Even if it grows let's say by 25% let's say next year, it's 1,000, and then growth further lowering down. Broadly 2,000, 2,500 sort of a market is what you're expecting over next three to four years.

Is that right understanding?

That should be possible. At least three to five years, that number is not out of range.

Secondly, on the India industry itself, the IPM growth has been on uptrend even if I look at year-to-date base effect of the past year. How do you read this industry growth and what do you think the growth would be for let's say next 12 to 15 months at the industry level?

Definitely the H1 this year has been far higher market growth than what we have seen in the couple of preceding years. 12% is the market growth this year so far.

We think this market growth is likely to sustain for the rest of the year. Perhaps from next year, it may drop a little bit, say 1%, 2%, but minimum 10% is what we think should continue from here on as well, at least for the next financial year.

This year may be potentially a one-off case in increase in IPM growth to this extent, but below 10% is in our view it's not looking likely at this stage.

This is relatively much better compared to earlier years. Any factors you would like to call out which would drive this higher growth for the industry?

I think it's very difficult to pinpoint still. In our case, there are multiple factors that are also contributing to our growth, like sema launch and field force expansion.

A large part of our growth difference can be explained through those. What is causing the higher say 2%, 3% market delta is still difficult to pinpoint exactly.

Okay.

Okay. Thirdly, just on Brazil, how much of the growth in the 2Q would have come from new launches and how much from existing brands, if I break that growth of 20%?

Right, right. Broadly speaking, it's 1/3, 1/3, 1/3.

1/3 on price, 1/3 on volume, and 1/3 on new launches.

Got it, sir. Just lastly, any new products that have been launched in the OTC segment and you see the scale-up happening the way we've seen for Curatio?

There are many brand extensions launched in the OTC space, which are, I would say, reasonable in size, they're not very big. The idea is to launch multiple of these where you can create a sizable base in two, three years.

Those are always part of our new product planning part of the OTC business. Has there been any completely new product launch which is not an extension?

Probably not in the last 6 to 8 months. I believe these are spaces where entering completely new is very challenging, we do keep a lookout for acquisitions wherever possible to bolt on to our OTC platform.

Got it, sir. Just lastly, if I may, with respect to the marketing expense within India for OTC and for prescription, any broad breakdown you could give, either as a percentage of total spend or absolute, whichever is convenient?

Oh, Tushar, we don't have the numbers separately.

Sir. That's it from my side.

Thanks, thanks a lot.

Hello, thank you for the opportunity. I wanted to understand about the 13% constant currency growth we saw in the US.

How much of this growth is coming from the products with durable competitive advantage versus products where price erosion could accelerate as competition enters?

Unfortunately, I don't know how to answer that question because in the off-patent business, there's no thing as a durable competitive advantage. It's really depends upon the number of competitors and how quickly they come to market.

Customers are very finite, right? Because we operate in the retail channel with three customers or four customers accounting for 90% of the market.

Any new player has to call upon the same customers. Usually, the way to penetrate is to offer a better price.

Hence, I would say that I'm not sure how to tell you what is a durable competitive advantage generic product in the US. However, that said, we are constantly working on improving our costs, and that is one way in which we are able to maintain a base business.

Our base business generally has been flat. Growth is coming from new products, but our base business, the price and the volume, etc., kind of neutralize each other.

I would say it's a decent result for mature products.

Could we see this growth rate sustaining going forward or, as the launches normalize, we'll see some moderation?

We have new launches planned. Again, when we forecast new launches revenue, we build scenarios based on the number of competitors.

Honestly, before we launch, we are not 100% sure as to how many people will show up at the opening. What I said earlier in the call is that we so far year to date already filed four products in the US, and then we think we can file at least four to five more for the remaining of this fiscal year.

These let's say 9, 10 products would be higher than what we have filed in several previous years. Hence, this kind of gives me a positive optimism for future growth.

Thank you. Then just one quick question on sema.

As the competition is increasing, what matters more for your economics? Will we focus more towards defending our market share or will we focus on maintaining realization per patient?

Then on the share as well, can we expect to sustain the share even as profitability per unit declines?

This is, I assume, about the India business. We've launched sema only in India so far, and our objective would be to endeavor to expand the market as much as possible.

That would also mean that we would need to defend our share at the same time. I think we're seeing good traction there on that front in the last couple of months.

I don't think there'll be any change in pricing per patient or pricing per product, because these are all branded businesses, there's no real price erosion in that sense. In fact, the price would only be stable or gradually increase over the next couple of years.

Thank you. Then just one last question on the Brazil business.

We have approximately 53 products, right, that are awaiting ANVISA approval. How meaningful could these launches be to growth over next two years per se, and what kind of growth can we expect for this geography, any rough number?

I think we have said it that it should be at least superior to 10%, closer to 15% growth in the coming years.

Okay. What is the key constraint for this geography?

Would you say approval timelines or commercial execution? What is the key challenge over here?

I would say both, because approval timelines with ANVISA taking at least two years, so that's a long process. Then in terms of commercial challenges, of course, we are competing with at least very strong local companies who are entrenched in the Brazilian market with a much larger field force footprint than we have.

They're also has started to be a trend in the last two, three years about price competition, which was historically quite benign, but it has become much more, I would say, aggressive and competitive in the last two, three years.

Okay. Makes sense.

Thank you. Thank you for giving me the opportunity.

This is all for me.

Hi, good evening. I just had one question.

For our combined business, including India's Torrent base business and JB Chemicals, could you give any outlook on the EBITDA margin over the next maybe two to three years given JB has the ophthalmology portfolio savings, etc. lined up?

If you could just share on the base business and including JB how that could look like. No,

as a policy, we don't share geography-wise EBITDA.

No, just combined business. Any outlook on the EBITDA margins from 33.5%, how that could track over the next two, three years?

That's what I had called out earlier that Quarter 2 33.5%, for rest of the two quarters, it can improve a little bit for this year.

Okay. For FY 2028 and 2029, is there any outlook, do you see any improvement margins lined up?

No, we're not giving any guidance for FY 2028.

We're

just waiting for the full-year base to come in, and then probably next year Quarter 1, we'll guide you.

Got it. Okay.

Thank you.

Hi, thank you for the follow-up. On JB's international business disruption, could you localize in which segment the disruption was maximum?

Was it ROW, was it US, was it CDMO?

JB international business, I would say the disruption, if I was to say, it was across the board because it was linked to issues which are not particular or peculiar to any one geography. It was linked to issues like software integration, accounting integration, merger of the companies, change of processes.

Then you will also recall we had some quality issues linked to one product in the US for which we had a recall. It was I would say outside of the US recall, it was a generalized across geography, I won't point the finger towards one more than the other.

We're talking about back-office issues, we're not talking about front-office, customer-facing issues. Sure, sure,

sure. Thank you.

Second question, while you've given out some outlook on Indian pharma market that the strong growth would continue, but what has caused the sudden spike, let's say, if I look at GLP-1s, I think the impact would be probably not be more than 100 basis point in terms of growth acceleration, right? Is it market share shift happening, some of the smaller companies which were earlier operating, they are not operating anymore, or the focus from other players on trade generics has gone down, or Jan Aushadhi there is less traction?

What is driving this sudden spike?

That's exactly the question that was asked earlier, but we are not too sure on how to pinpoint or break up the spike in IPM growth by, say, this 2%, 3% difference in this year. It could be a factor of all of these, as you mentioned.

One indication at least that we have is that our trade generic business has not really slowed down materially. Our business is pretty small right now, but if that was some indication, we would have got a sense through that.

It's not really the trade generic that's slowing down and shifting to brands either. It seems that both segments are growing.

Again, because of so many factors at play, it's difficult to pinpoint. What we did mention is that we believe perhaps it may not be able to continue next year, but certainly our view is that it should not go below double digits, the IPM growth.

Sure, thank you, and all the best.

Thank you for participating today. With that, we conclude today's call.

Thank you.