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Torrent Pharmaceuticals Ltd Investor Presentation Q1 FY 2012

Torrent Pharmaceuticals Ltd Investor Presentation Q1 FY 2012

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Torrent Pharmaceuticals Ltd

Investor Presentation

Q1 FY 2012

This information may contain certain forward-looking statements/ details in

the current scenario, which is extremely dynamic and increasingly fraught

with risks and uncertainties. Actual results, performances, achievements or

sequence of events may be materially different from the views expressed

herein. Investors/shareholders/public are hence cautioned not to place

undue reliance on these statements/ details, and are advised to conduct

their own investigation and analysis of the information contained or referred

to in this section before taking any action with regard to their own specific

objectives. Further, the discussion following herein reflects the perceptions

on major issues as on date and the opinions expressed here are subject to

change without notice. The Company undertakes no obligation to publicly

update or revise any of the opinions or forward-looking statements

expressed in this section, consequent to new information, future events or

otherwise.

Caveat

1. Performance Highlights

2. Financials

3. Business Segments

– India

– International

4. Facilities – Expansion Plan

Contents

Q1 FY12 Highlights

• Revenues at Rs. 6,475 Mn vs. Rs 5,410 Mn

• Revenue growth of 20% on the back of growth from US, Brazil and Contract

manufacturing operations.

• Non recurring income of Rs. 170 Mn towards dossier out licensing income

• PAT grows by 38% at Rs. 1,025 Mn vs. Rs 742 Mn

• Lower margins in Indian formulations business due to higher manufacturing

overheads.

Financials

Rs. MnSales Progression

Particulars Q1 11 - 12

Q1 10 - 11

10 - 11 09 - 10

India 2,460 2,235 8,389 7,254

Gwth % 10% 13% 16%

International 3,061 2,565 10,702 9,163

Gwth % 19% 18% 17%

Brazil 1,055 867 3,459 3,006

Mexico 27 18 60 6

Germany (Heumann) 825 692 2,986 2,547

USA 422 270 1,093 909

Europe (excl Heumann) 332 312 1,245 1,163

Rest of World 292 246 1,276 1,141

Russia & CIS 108 160 583 391

Contract Manufacturing 610 427 2,104 1,849 Gwth % 43% -14% 14%

Other 3 27 24 63

Total Sales 6,134 5,254 21,220 18,329

Gwth % 17% 13% 16%

P&L Rs. Mn

ParticularsQ1

11 - 12Q1

10 - 1110 - 11 09 - 10

Revenues 6,475 5,410 22,265 19,160 Cogs 1,959 1,640 6,965 5,710

% Revenues 30% 30% 31% 30%SG&A Spend 1,540 1,411 5,924 4,879

% Revenues 24% 26% 27% 25%Employee Cost 1,115 923 3,895 3,162

% Revenues 17% 17% 17% 17%R&D Spend 330 315 1,388 1,202

% Revenues 5% 6% 6% 6%EBITDA 1,531 1,121 4,092 4,208

% Revenues 25% 21% 19% 23%PBT 1,313 977 3,427 3,472

% Revenues 20% 18% 15% 18%Tax 287 235 725 1,160

% PBT 22% 24% 21% 33%PAT (after minority Int) 1,025 742 2,702 2,312

% Revenues 16% 14% 12% 12%PAT (Adj for MAT) 1,025 742 2,702 2,841

% Revenues 16% 14% 12% 15%

Balance Sheet Rs. Mn

Particulars 31.Mar.11 % 30.Jun.11 % ∆SOURCE OF FUNDS: Shareholders' Funds 10,224 62% 11,258 65% 1,034 Loan Funds 5,721 35% 5,491 32% (229) Minority Interest 16 0% 16 0%NET DEFERRED TAX LIABILITY 480 3% 494 3% 14

TOTAL 16,440 100% 17,259 100% 818

APPLICATION OF FUNDS: Net Fixed Assets 8,541 52% 8,822 51% 281 Long Term Investments 200 1% 200 1% - WORKING CAPITAL:

Inventories 5,048 31% 5,413 31% 365 Sundry Debtors 3,404 21% 3,999 23% 595 Other Current Assets 678 4% 628 4% (50) Loans & Advances 1,428 9% 1,448 8% 20 Less: Current Liab. & Prov. 8,907 54% 9,933 58% 1,027

NET CURRENT ASSETS 1,651 10% 1,555 9% (96)

Cash, Bank & Current Investments 6,048 37% 6,681 39% 634

TOTAL 16,440 100% 17,259 100% 818

Business Segments

India

Highlights & Growth Drivers Rs. Mn

India

• Q1 FY 12 Highlights

• Lower revenue growth on account of lower growth in gastro and pain therapies

• Lower margins on account of higher manufacturing overheads

• Growth drivers

• Consolidate entry into newer geographies and therapeutic areas

• Brand building thru increased Specialty Coverage & Creeping Expansion in Customer

Base

• New Product Introductions including filling of Portfolio Gaps

• Entry into new therapeutic areas

IndiaQ1

11 - 12Q1

10 - 1110 - 11 09 - 10

Revenues 2460 2235 8389 7254% Growth 10% 13% 16% 16%

Business Segments

International Operations

International Operations – Expanding ShareFY 11 - Turnover

International Revenues Rs. Mn

Growing share of International – up from 26% to 51%

International Q1 11 - 12

Q1 10 - 11

10 - 11 09 - 10

Revenues 3,184 2,679 11,158 9,676 % Growth 19% 17% 15% 15%

Rs. MnHighlights & Growth DriversBrazil

• Q1 FY 12 Highlights

• Reai growth of ~ 10% with volumes growing 1%, New Introductions 14%, Price de-

growth 5%.

• Adjusted for sales spill over in Q4 LY, sales in Reai de-grew by 16%

• Torrent growing at 8% vs. Covered Market growth of 9%

• Growth Drivers

• Existing Products & Introduction of new products (30-35 new launches by 2014-15)

BrazilQ1

11 - 12Q1

10 - 1110 - 11 09 - 10

Revenues 1,074 887 3,551 3078% Growth 21% 33% 15% 18%

Rs. MnHighlights & Growth DriversMexico

• Q1 FY 12 Highlights

• Actively marketing 4 molecules in CNS

• 2 new products lined up for launch in CNS for the year

• Field force of 30 people covering 70% of Mexican market.

• Growth Drivers

• Entry into CV segment deferred for next year

• Portfolio to grow to 30 products in 4 years with field force of 200 people

MexicoQ1

11 - 12Q1

10 - 1110 - 11 09 - 10

Revenues 28 18 61 6 % Growth 52% 892%

• Q1 FY 12 Highlights

• Launched 2 new molecules in Q1 taking total number of molecules to 17

actively marketed

• Improved margins on account of higher revenues

• 28 ANDA's approved till date (17 actively marketed, 4 under patent)

• Growth Drivers

• 32 ANDA's pending for approval & 22 ANDA's under development

• Break-even likely by 2012-13

Highlights & Growth Drivers Rs. Mn

USA

USAQ1

11 - 12Q1

10 - 1110 - 11 09 - 10

Revenues 443 281 1,143 943% Growth 58% 44% 21% 226%

Rs. MnHighlights & Growth Drivers

• Q1 FY 12 Highlights

• Euro sales growth of 8%, with continuous improvement in market share over last 4

quarters

• Stable margins

• Growth Drivers

• Heumann successful in winning tenders

• New Products going off patent and Therapy coverage expansion

• Shift of manufacturing base to India to boost competitiveness in bidding

Germany - Heumann

Germany (Heumann)

Q1 11 - 12

Q1 10 - 11

10 - 11 09 - 10

Revenues 834 697 3,016 2639

% Growth 20% -2% 14% -1%

Rs. MnHighlights & Growth DriversEurope (excl Heumann)

• Q1 FY 12 Highlights

• Sales growth affected by lower sales contribution from new product introductions

• 2 new products launched during the quarter

• Growth Drivers

• New Product Pipeline – 30 products till 2014-15

• Increasing geographical reach through direct field force presence in Romania and UK in

the immediate term.

Europe (exc Heumann)

Q1 11 - 12

Q1 10 - 11

10 - 11 09 - 10

Revenues 383 365 1,476 1400

% Growth 5% 10% 5% 12%

Rs. MnHighlights & Growth DriversROW

• Q1 FY12 Highlights

• Top line growth of 19%, adjusted for currency movements top line grew by 22%

• Growth Drivers

• Entry into semi-regulated markets like Thailand (Market Size of over USD 2 bio) –

Revenues expected to flow from FY13.

• Increased focus on existing territories with direct field force presence viz. Philippines,

Sri Lanka, Vietnam & Myanmar

• Scale up of operations in regulated markets like Australia & semi-regulated markets like

South Africa.

• Minimize development costs by leveraging on R&D costs incurred for developed markets

ROW Q1 11 - 12

Q1 10 - 11

10 - 11 09 - 10

Revenues 309 261 1,353 1204% Growth 19% 2% 12% 30%

Facilities – Expansion Plan

Dahej SEZ

• Nature: Formulation & API Capacity Enhancement

• Project Cost: Rs. 800 crores

• Planned capacities: 50 TPA plus 11,000 million tablets / capsules p.a.

• Timelines for completion:

• Phase I: Project cost of Rs. 500 crores, commissioning in FY 2014-15

• Phase II: Project cost of Rs. 300 crores, commissioning in FY 2016-17

• Justification:

– With growing volumes in US / EU, API + Formulation capacity constraint is anticipated 2-3

years.

Facilities – Expansion Plan

Thank You