Torrent Pharmaceuticals Ltd Investor Presentation March 2010

Torrent Pharmaceuticals Ltd Investor Presentation March 2010

Caveat 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.

Contents 1. Performance Highlights 2. Financials 3. Business Segments – – 4. India International Facilities – Expansion Plan

Q 3 09 -10 Highlights • Revenue at Rs. 4801 Mn vs. Rs 4326 Mn – Revenue growth of 11% on the back of sustained growth from major markets. – International sales boosted by noticeable performance in US and Brazilian operations. • PBT at Rs. 966 Mn vs. Rs 529 Mn – Growth of 83% fuelled by: • Stable margins in Indian operations led by improved product mix and lower input costs. • Margin expansion in International operations on the back of higher volumes and favorable currency movement.

Financials

Sales Progression Rs. Mn

P&L • YTD 09 -10 includes one time out-licensing income of Rs 15 crs in Q 2 09– 10 Rs. Mn

Balance Sheet Rs. Mn

Business Segments India

Highlights & Growth Drivers India Rs. Mn • Highlights • Stable margins on the back of improved product mix coupled with lower input costs offset by higher marketing spend. • Continued improvement in quarterly sales growth. 08 -09 Q 1 : 1%; Q 2 : 3%; Q 3 12%; Q 4 17% ----- 09 -10 Q 1 15%; Q 2 15%; Q 3 15% • 60% of sales from Cardiac (Rank No. 1) and CNS (Rank No. 3) • Torrent growing at 21% vs. Covered Market growth of 19% on MAT Nov 09 basis • Launched new division “Sensa” catering to Gynecology • Growth drivers • Building Specific Franchises • Penetration into Tier I & Tier II to VI cities / rural markets • Brand building thru increased Specialty Coverage & Creeping expansion in Customer Base. • New Product Introductions & portfolio development • Developing new TAs Respiratory & Derma.

Business Segments International Operations

International Operations – Expanding Share FY 05 - Turnover FY 09 - Turnover Growing share of International – up from 26% to 50%

Highlights & Growth Drivers Latam Rs. Mn • Highlights – Reai sales growth of 7% (volume growth 5%, new introductions 3%, price de growth of 6% due to price cuts on select products offset by price rise of 5%) – Appx. 90% of sales from Cardiac and CNS. – Largest Indian player in the Brazilian pharmaceutical market • Growth Drivers – Existing Products & Introduction of new products (40 new launches by 2013 -14) – Differentiated Products (1 product in pipeline to be launched by 2010 -11) – Entry into Mexico beginning FY 11

Highlights & Growth Drivers USA Rs. Mn • Highlights – Higher top line due to • Increased volumes from Citalopram, Risperidone, Zolpidem & Topiramate. • Contributes nearly 80% of total sales. • Market Share Citalopram 27%, Risperidon ~ 10%, Zolpidem ~ 12%, Topiramate ~ 8% – 13 ANDAs approved till date. 2 ANDAs filed during the quarter. • Growth Drivers – Control over API costs with in house production. – 27 ANDAs pending for approval & 35 ANDAs under development.

Germany - Heumann Market Developments & Management Actions • Market Developments - Major healthcare reforms introduced in Jan 2004 and further reforms introduced in July 2007 - Shift of power from Doctors / Pharmacies to Insurance Companies. - Clout of Insurance companies has gone up with ability to do direct supply contract with pharma companies at lower prices Insurance companies and Pharmacists drive market - Market dynamics have changed completely compared with the time of acquisition due to changes in regulatory environment • Management Actions – Business model restructured with minimum field force leading to variable cost driven model with minimal fixed cost. (staff of 66 people after restructuring from over 200 at the time of acquisition) – Reduced promotional spend resulting in increased margins. – Entered into contracts with sick funds. – Shift of production from Germany to India 30% of the total sales value shifted by March 09

Germany - Heumann Highlights & Growth Drivers Rs. Mn • Highlights – Euro revenues (adjusted for one off income in Q 3 FY 09) de grew by 15% with volume de growth of 5. 5%, price de-growth of 12. 2% and new introduction growth of 2. 7%. – Covered Market Unit Growth ~3. 9% Heumann De Growth : 1. 8% – Adjusting for one time gain in Q 3 FY 09 margins for Q 3 FY 10 have improved in absolute terms on the back of site shifts and favourable product mix. – AOK with MS 14%, TK with MS 6% and IK with MS 2% awarded tenders during the quarter; • Torrent was awarded 5 products each in AOK and TKK with 9 products in IK – Participated in DAK (10% MS). • Growth Drivers – New Product Introductions – Aggressively bidding for tenders floated by sick funds – Shift of manufacturing base to India to boost competitiveness in bidding

Highlights & Growth Drivers Europe (excl Germany) Rs. Mn • Highlights - Ropinirole, Indapamide and Lamotrigine contributes nearly 80% of total sales. - Higher gross margins due to favorable product mix. • Growth Drivers - New Product Pipeline – 30 products till 2012 -13 with genericized market size of approximately USD 2. 5 bio. - Increasing geographical through direct field force presence in UK in the immediate term.

Highlights & Growth Drivers ROW Rs. Mn • Highlights – Higher topline (22% adjusted for currency) as well as profitability on the back of: - Increased sales from Philippines & SEA territories. - Higher gross margins due to improved product mix. • Growth Drivers - Entry into semi-regulated markets like Thailand (Market Size of over USD 2 bio) – Revenues expected to flow from FY 12. - 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

Facilities – Expansion Plan

Facilities – Expansion Plan Sikkim Chatral • • • Nature: New Formulation Nature: Formulation Capacity Enhancement Facility Nature: API Capacity Enhancement • Project Cost: Rs. 135 crores • Project Cost: Rs. 56 crores • Project Cost: Rs. 113 crores • Planned capacities: 3000 • Planned capacities: 1800 million • Planned capacities: 60 TPA tablets / capsules p. a. million tablets p. a. • Timelines for completion: • Justification: • IT and Excise exemption for 10 Timelines for completion: 2010 - batch manufacturing • 11 2010 -2011 • plus separate facility for exhibit • 2010 -11 Justification: – With growing international Timelines for completion: • Justification: – years • sales capacity constraint in With growing domestic market, existing facility is anticipated in US / EU, API capacity 2 -3 years constraint is anticipated 2 - Baddi plant is expected to 3 years achieve 100% capacity utilization in 2 -3 years With growing volumes in – Greater control over API Costs Dahez SEZ • Nature: Formulation & API Capacity Enhancement • Project Cost: Rs. 339 crores • Planned capacities: 15 TPA plus 4000 million tablets / capsules p. a. • Timelines for completion: 2012 -13 • Justification: – With growing volumes in US / EU, API + Formulation capacity constraint is anticipated 2 -3 years

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