The Hindu Business Line : Torrent Pharma’s Q1 net increases 65%

Ahmedabad, Aug 1 The Ahmedabad-based pharma major Torrent Pharmaceuticals Ltd’s consolidated sales for the first quarter ended June 30, 2007, increased by 11 per cent to Rs 331 crore compared with Rs 299 crore posted during the corresponding quarter of the previous year.

Consolidated net profit for the quarter jumped by 65 per cent to Rs 27 crore (Rs 16 crore).

The consolidated international sales grew by 5 per cent to Rs 129 crore, the company said in a release here.

Growth Rate

Adjusting for the effect of sales spillover due to implementation of VAT in 8 States during first quarter of previous year, the domestic formulation sales grew by 22 per cent. This growth rate was largely due to buoyant performance in diabetology and cardiology divisions and increasing market share of new products introduced in the previous year.

During the quarter, Torrent achieved the top position in the cardiology segment. Production for domestic market in the new facility in Himachal Pradesh continues to bolster margins for the quarter due to fiscal benefits by way of excise duty exemption and lower income tax.

Price Erosions

During the quarter, Brazilian operations clocked a slower growth of 19 per cent with sales of Rs 37 crore (Rs 31 crore). The growth rate is expected to pick up in the remaining quarters. In the German market, which faces severe price erosions, Heumann grew by 5 per cent, driven by volume expansion, to Rs 59 crore (Rs 56 crore).

Price erosions are expected to continue going forward, which will be offset with a time-lag through reduced manufacturing costs by shifting manufacturing to India plants, restructuring of operations to reduce SGA & volume expansion.