Torrent Pharmaceuticals: Navigating Growth and Strategic Expansion in Q2 FY26

Torrent Pharmaceuticals Limited has reported a robust performance for the second quarter and half year ended September 30, 2025, showcasing significant growth across its key markets. The company's consolidated revenues for Q2 FY26 stood at Rs. 3,302 crores, marking a commendable 14% year-on-year increase. This strong top-line growth was complemented by an impressive 15% rise in operating EBITDA, reaching Rs. 1,083 crores, with an operating EBITDA margin of 32.8%. The net debt to EBITDA ratio remained healthy at 0.45x, underscoring the company's disciplined financial management.

The branded markets continue to be the cornerstone of Torrent Pharma's success, contributing a substantial 73% to the overall revenue this quarter. India, the company's largest market, delivered a strong 12% growth, with revenues touching Rs. 1,820 crores. This performance outpaced the Indian Pharmaceutical Market's (IPM) chronic growth of 11%, driven by exceptional results in the cardiac and gastro segments. Brazil also emerged as a significant growth driver, registering a 21% increase in revenues to Rs. 318 crores. The Curatio business, a key focus area, demonstrated remarkable traction with a 29% growth in Q2 and 27% in H1, fueled by robust demand generation and strategic field force expansion into previously uncovered regions.

Strategic Initiatives Driving Future Growth

Torrent Pharma is not resting on its laurels, with several strategic initiatives underway to sustain its growth trajectory. The company is actively expanding its field force, aiming to reach 7,000 representatives by the end of the financial year, up from 6,800 currently. This expansion is strategically focused on chronic divisions like cardiac, diabetes, and CNS, which have been key contributors to outperformance. Furthermore, the company plans to enter one new therapeutic area this quarter, with details expected to be shared by Q4 FY26, signaling a continuous drive for portfolio diversification.

In the international markets, the company is making significant strides. The US business, while facing a period of limited new product launches, is set for a ramp-up in Abbreviated New Drug Application (ANDA) filings, targeting 4-5 this fiscal year, increasing to 10 next year, and potentially 15 the year after. This move is crucial for restoring profitability and maintaining a decent growth profile. In Brazil, the company has filed its application for Semaglutide with ANVISA, aiming to be a first-wave entrant in what is projected to be a billion-dollar market opportunity. Both injectable and oral versions are planned for launch within the next financial year.

Navigating Challenges and Looking Ahead

While the growth narrative is strong, the company acknowledges certain challenges. The Germany business experienced a 5% decline in constant currency due to ongoing supply disruptions from a third-party supplier, an issue expected to persist into Q3 FY26. Additionally, working capital saw a temporary deterioration in H1, attributed to extended credit periods post-GST implementation and accelerated insurance discounts in Germany, though normalization is anticipated in Q3. Management has been transparent about these issues, providing root-cause explanations and outlining steps for resolution.

Looking ahead, the company is poised for further strategic moves. The acquisition of JB Pharma is progressing well, with all necessary regulatory approvals secured. The transaction is expected to close by January 2026, after which the company will provide guidance on synergy values. Torrent Pharma's capital expenditure for FY26 is estimated at Rs. 300 crores, with an average of Rs. 250-300 crores per annum over the next three years, indicating sustained investment in growth. The company's focus on chronic therapies, strategic market expansions, and a robust pipeline of new products positions it well for sustained growth and enhanced shareholder value in the coming years.

Torrent Pharmaceuticals continues to demonstrate strategic clarity and disciplined execution, effectively balancing robust growth in its core markets with proactive measures to address challenges and capitalize on emerging opportunities. The management's forward-looking approach, particularly in high-potential segments like GLP-1, reinforces confidence in its long-term vision.