Key highlights from Torrent Pharmaceuticals Ltd (TORNTPHARM) Q2 FY23 Earnings Concall
Q&A Highlights:
- [00:06:41]Damayanti Kerai from HSBC asked about split of India business growth in 2Q in terms of price, volume and new launches. Sudhir Menon CFO replied that the company had 19% growth and the breakup of 19% is 6% volume, 9% price and 4% new products.
- [00:07:01] Damayanti Kerai with HSBC also enquired if the company has sufficient lever to sustain its current growth or if it will move higher. Sudhir Menon CFO answered that the company is confident of maintaining this level of 13-14% double digit growth going forward.
- [00:09:47] Prabodh of Tattva Capital asked that regarding Curatio, amortization of goodwill has been disallowed for IT deduction, so how the consideration paid to Curatio will be considered. Sudhir Menon CFO said that as a process there is a purchase price allocation that will be carried out. If one is creating intangibles that are in the form of brands and non-competence stuff, those amortizations can be claimed.
- [00:10:42] Kunal Dhamesha from Macquarie asked that in Germany, when the company is expecting good ramp up from 4Q, if it will be on the back of new products or older ones. Sanjay Gupta ED replied that it’s a cumulative impact. So the impact will be coming from tender wins and new launches.
- [00:12:34] Saion Mukherjee from Nomura asked that in the US market, what’s the intensity of price erosion. Sanjay Gupta ED replied that price erosion continues at a substantially higher level. TORNTPHARM is compensating it with some volume increases and few launches in the last 2-3 years from external parties.
- [00:12:39] Saion Mukherjee from Nomura also asked that on the Indrad side, how many ANDAs are pending. Sanjay Gupta ED answered that in Indrad, there are about 19 products that are pending approval. So the company would hear back from the FDA in 90 days and don’t want to speculate.
- [00:19:43] Neha Manpuria of Bank of America asked about retaining share due to higher competition in the products. Sanjay Gupta ED replied that categorically the company has retained share and are continuing to perform the products in large competitive markets.
- [00:20:42] Neha Manpuria of Bank of America enquired how the trade generics is progressing in India. Aman Mehta CEO answered that it’s on track. The growth has been quite robust in last two quarters. The company also believes that the target of 2.5-3% contribution in the near term is something that would be possible and sustainable.
- [00:32:42] Damayanti Kerai from HSBC enquired about the funding of the Curatio deal. Sudhir Menon CFO replied that it’s substantially through debt. And the cost of that debt would be around 7.2.
- [00:36:20] Kunal Dhamesha of Macquarie asked that in the branded generic market in Brazil and India, how business is done differently. Aman Mehta CEO replied that both markets are intrinsically similar markets as they are both through physician coverage and there is not much difference.
- [00:41:22] Karan Vora with Goldman Sachs enquired about capacity utilization across all plants in the US and outlook in next 2-3 years. Sudhir Menon CFO said that the plants are fungible and all plants put together, the capacity utilization is roughly 54%. On outlook, the capacities are enough for the next 3 years and no major expansions are planned.
- [00:44:29] Karan Vora with Goldman Sachs asked that on forex hedging, what percentage of forex revenues are hedged and for how long. Sudhir Menon CFO replied that the company does a 12 month forward cover every month on a rolling basis. Therefore, at any point in time the company is covered for the next 12 months.