Torrent Pharmaceuticals Ltd (TPL), a Rs 500-crore plus pharma entity, is set to gain significant growth in domestic and international operations in 2005-'06 and 2006-'07. The company is spreading its wings through acquisition, tie-ups, state-of-the-art manufacturing facilities, investments in own research and development activities and strong product pipeline. When few Indian pharma corporates failed to generate higher exports, TPL is generating much faster growth in exports. With better prospects, the TPL share continues its upward march after liberal bonus issue on the BSE.
The company is investing huge amount for setting up subsidiaries in foreign countries to launch cost effective products successfully and meet stiff competition. The aggressive entry into highly regulated market with filing of increasing number of DMFs and ANDAs will boost TPLs operations in the coming years.
Based on the nine months results and acquisition of German company in December 2005, TPL is set to push its consolidated net sales by 50 per cent to Rs 950-1000 crore in 2005-'06 with net profit jump in the range of 40-45 per cent at Rs 70-75 crore. Its standalone net profit is likely to touch Rs 90-100 crore in 2005-'06 as compared to Rs 50 crore in the previous year. This will create strong sentiment among the investors and the share price will once again take momentum in near future.
During March 2006, the management offered liberal bonus shares in the ratio of 1:1 and also split the face value of share from Rs 10 to Rs 5. The liberal bonus inflated TPL share to its 52-weeks peak level at Rs 1078 on February 13, 2006. However, after splitting the face value and bonus issue, the share was quoted at Rs 239 on BSE during the second half of February 2006. Currently, TPL share is moving up continuously and on May 12, it reached Rs 336, but declined on profit taking to Rs 282. With the expected strong financial performance, new product launches and aggressive marketing efforts, the share will give healthy returns in short time.
Currently, Indian promoters are holding 74.09 per cent of total 846.11 lakh equity shares. Foreign financial institutions are holding 11.02 per cent, which includes Merrill Lynch 1.06 per cent, Lotus Global Investments 5.2 per cent and Mavi Investment Fund 3.07 per cent. Indian public is holding only 8.11 shares as at the end of March 31, 2006.
TPL is focusing on highly regulated markets like the US, Europe and building up robust basket of products to be launch in the coming years. It filed four ANDAs viz., metformin instant release, sertraline, zolpidem and citalopram and three DMFs viz., sertraline, venlaflaxin and ropinorole in the API segment recently. These molecules have big market potentials. The worldwide sales of sertraline touched $ 3 billion and that of zolpidem at $ 2.5 billion during 2005. TPL is expecting a sales of $5-6 million from each of the ANDA candidates in the first year of their respective launches.
The company has seven discovery projects in pipeline - three in Diabetes & related complications, one in cerebro-vascular, two in obesity and one in cardio-vascular. It filed 208 patents for NCEs in all major market worldwide and received 129 patents from USA, Japan, Europe, Czech Republic, Australia, Hong Kong, Russia and India.
The company has established marketing operations in more than 50 countries. To expand its international operations, TPL has set up sixth foreign subsidiary in Australia during December 2005 and now setting up subsidiaries in Mexico and other mature markets in the current year.
Recently, TPL entered into agreement with Novo Nordisk A/S, Denmark for setting up formulation and packaging facility for Insulin at Indrad, in Gujarat, exclusively for Novo Nordisk.This plant will be able to supply International Quality Insulin to the needs of millions of people with diabetes in India. TPL also launched its super-specialty diabetes division - AzuCa, during February 2006 to sharpen focus on one of the fastest growing disorders. This division will strengthen its position and help to increase its market share to 15-20 per cent in the Oral Hypoglycaemic Agents segment with next three years.
TPL acquired Heumann Pharma GmbH & Co Generika KG (Heumann), Germany, Euro 50 million Pfizer Group company, during July 2005. This acquisition provided necessary marketing support to TPL in Germany. The 'Heumann' brand has a strong equity in the generic medicines segment with the doctors. Its product portfolio consists of 116 products, predominantly sold under prescription. These products provide good strategic fit and strong market position to TPL, with cardiovascular, gastro-intestinal and anti-infective therapies constituting around 75 per cent of the portfolio.
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The company's standalone net sales for the first nine months of 2005-'06 increased by 64.5 per cent to Rs 528.02 crore from Rs 371.03 crore in the corresponding period of last year. Its standalone net profit also increased by 36.1 per cent to Rs 67.52 crore despite lower other income and higher manufacturing & selling costs. The earning per share for the first nine months worked out to Rs 31.92 as compared to Rs 23.46 in last period. Its exports increased by 130 per cent in the first nine months to Rs 124 crore from Rs 53.87 crore in the similar period of last year and income through contract manufacturing activity went up by 30 per cent to Rs 92.44 crore.
The nine months figures have already crossed the net sales and net profit figures of full year ended March 2005. The company recorded net sales of Rs 472 crore and earned a net profit of Rs 52.92 crore for the year 2004-'05. Thus, TPL will achieve smart allround gain in 2005-'06 and likely to maintain the same momentum in following years. With strong reserves position and strong shareholding of 74 per cent by the promoters, other investors will get higher returns even after bonus issue.