Torrent Pharmaceuticals (500420) Q2 26/27 earnings summary

Executive summary

• Q2 FY27 revenue rose 50.8% YoY to Rs 4,979 crore; operating EBITDA before exceptional items grew 53.8% to Rs 1,666 crore, while PAT fell 9.6% to Rs 534 crore.

• Base-business revenue grew 18% to Rs 3,893 crore; post-merger integration temporarily affected JB business revenue, particularly international sales.

• Cost synergies are ahead of plan; management expects gradual margin improvement and double-digit H2 growth for the combined JB business.

Financial highlights

• Q2 revenue was Rs 4,979 crore, up 50.8% YoY; gross profit reached Rs 3,755 crore, up 50.1%, with gross margin at 75.4% versus 75.8%.

• Operating EBITDA before exceptional items was Rs 1,666 crore, up 53.8%; margin was 33.5% versus 32.8% YoY.

• Q2 PAT was Rs 534 crore, down 9.6% YoY; EPS was Rs 14.05 versus Rs 17.45.

• H1 revenue rose 52.8% to Rs 9,900 crore and operating EBITDA grew 57.4% to Rs 3,330 crore; PAT declined 3.4% to Rs 1,100 crore.

• Q2 R&D spend was Rs 211 crore, or 4.2% of revenue; H1 spend was Rs 383 crore, or 3.9%.

Outlook and guidance

• H2 EBITDA margin is expected to be slightly above Q2’s 33.5%, with gradual improvement; no specific FY28 margin guidance was provided.

• JB business growth is expected to recover to double digits in H2; JB India growth is expected to exceed its H1 rate of 10%.

• Cost-synergy guidance remains Rs 450 crore; ~half was considered achievable in the current year, with most expected by next year and delivery in two years versus the original three-year period.

• India revenue synergies are expected next year through cross-selling; international revenue synergies may take 2–3 years due to filing timelines.

• R&D spend is expected at 4%–4.5% of revenue next year; U.S. filings are targeted to rise to high single digits for 2–3 years.