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COMPANY PROFILE

Founded 62 years ago, Torrent Pharmaceuticals Ltd. is the flagship company of the Torrent Group. Is based in the Indian city of Ahmedabad. It was promoted by U. N. Mehta, initially as Trinity Laboratories Ltd, and was later renamed Torrent Pharmaceuticals Ltd.

Torrent Pharmaceuticals operates in more than 40 countries with over 2000 product registrations globally. Torrent Pharma is active in the therapeutic areas of Cardiovascular (CV), Central Nervous System (CNS), Gastro-Intestinal, Diabetology, and Anti-Infective and Pain Management segments. It has also forayed into the therapeutic segments of Nephrology and Oncology while also strengthening its focus on Gynaecology and Paediatric segments. 

PHARMACEUTICALS INDUSTRY IN INDIA

Introduction

India is the largest provider of generic drugs globally. Indian pharmaceutical sector supplies over 50% of global demand for various vaccines, 40% of generic demand in the US and 25% of all medicine in the UK.

India enjoys a significant position in the global pharmaceuticals sector. Presently, over 80% of the antiretroviral drugs used globally to combat AIDS (Acquired Immune Deficiency Syndrome) are supplied by Indian pharmaceutical firms.

According to the Economic Survey 2020-21, the domestic pharmaceutical market is expected to grow 3 times in the next decade. India’s domestic pharmaceutical market is estimated at US$ 41 billion in 2021 and likely to reach US$ 65 billion by 2024 with an additional expansion to reach US$ 120-130 billion by 2030 (approximately).

India’s drugs and pharmaceuticals exports stood at US$ 22.15 billion (approximately) in FY21.

The Union Cabinet has given its nod for the amendment of existing Foreign Direct Investment (FDI) policy in the pharmaceutical sector in order to allow FDI up to 100% under the regular route for manufacturing of medical devices.

Under Union Budget 2021-22, the Ministry of Health and Family Welfare has been allocated Rs. 73,932 crore and the Department of Health Research has been allocated Rs. 2,663 crore. The government allocated Rs. 37,130 crore to the 'National Health Mission’ (approximately).

Medicine spending in India is projected to grow significantly over the next five years, leading India to become one of the top 10 countries in terms of medicine spending.

COMPANY PERSPECTIVE AND REVIEW

Torrent is one of the front-runners in the Indian pharmaceuticals industry , engaged in the research, development, manufacturing and marketing of generic pharmaceutical formulations medicines in India, USA, Germany , Brazil , and internationally. 

The company has successfully managed to remain among market leaders consistently in both speciality and generic drugs segments, with its organic growth fuelled by in house R&D and inorganic growth through acquisitions, which also gives them cost advantage and high profit margins.

During the year 2019-20, the Company reported revenues of 7,939 crores, growth of 3% compared with 7,673 crores in the previous financial year ( approximately ).

The Company is currently developing several in-house New Chemical Entities (NCE) in various therapeutic areas, which will enable it to increase its overall market share.

Torrent is also about to enter the Indian Covid-19 medication market shortly,  with a recent licensing agreement with Eli-Lilly, USA

Torrent Pharma has now 9 brands valued at more than Rs.100+cores. It also has 19 brands in the top 500 categories of medicine in the world.

The company’s revenue, EPS and dividends per share have grown consistently over the past few years.

In the above context, the Torrent Pharmaceuticals Ltd stock would be a good long term buy.