#1torrent PHARMA Investor Presentation JULY 2015#2torrent PHARMA Simplifying Strategy, Diversifying capabilities ×#34 levers: Simplifying Strategy, Diversifying capabilities Acquiring newer and complex development skills leading to diversified product delivery capabilities Segmenting specialty focus and geographies Simplicity Skill for scaling up Scale Speed Speed through inorganic growth in key markets Simplifying and Harmonising Marketing Strategies × 3#4Organizational Transformation - A balanced, integrated program USA India Other Emerging Europe markets Then: Oral Solids only Future: Complex capabilities, New therapies, dosage forms Then: Chronic driven business Then: Lack of Harmonization Then: Driven by Germany & Oral Solids Now: Acute the growth driver Future: Harmonized efforts in marketing, New launches & Practices Future: Germany, UK, OTC Why? Preparing for the future, Better margins Why? Scale & Access post Elder acquisition - A new balance Why? Sustainability & Predictability Why? Margins, Lucrative segment#5Torrent - Current standing & Long term strategy India (1608 Crs) Among Top 15 cos., Strong presence in CV/CNS/VMN/GI market Strategy: Strengthening access in Dermatology, Gynaecology, Oncology, Nephrology, Pain Continuous focus on FF Productivity (10 lacs+), Specialties & Scientific model Revival of "Turrant" NI Pipeline - 180 products in the next 5 years USA (827 Crs) Late entrant, Duloxetine, Aripiprazole among Early entry players Strategy: Strengthening ANDA pipeline, Entry into Differentiated products, In- licensing TPL Emerging markets (954 Crs) No. 1 Indian company in Brazil, Philippines Strategy: Brand building & Specialty focus in CV/CNS/Gastro. Continuous focus on FF Productivity EU, Distributor driven Models (926 Crs) Among top players in Germany Strategy: Out-licensing, Entry into differentiated products, In-licensing CV- Cardiovascular, CNS - Central Nervous system, VMN - Vitamins Minerals Nutrients, GI-Gastrointestinal, BG - Branded Generics, FF Field force* 2014-15 Base S#6torrent PHARMA Performance snapshot St Ajns ×#7606 18% 1024 1161 4 years CAGR 1609 18% PERFORMANCE TREND (CRS.) 2011-12 2012-13 2013-14 2014-15 661 780 876 954 211 327 764 827 66% 558 657 INDIA BG OTHER BG MARKETS USA EU & GENERIC MKTS BG-Branded Generics. %ages reflect CAGR over the period 934 926 19%#8The driving factors 5000 4500 4 years performance 4653 4223 4000 3500 3255 3000 2740 2500 2000 1500 1279 951 1000 655 501 500 0 2011-12 2012-13 2013-14 2014-15 Revenue EBIDTA Topline CAGR %: 20% Bottomline CAGR: 35% Margin driven by USA and India#9EBIDTA - Outperforming Industry Average EBIDTA MARGINS % 20 20 27 20 19 23 22 220 20 21 22 2010-11 2011-12 2012-13 2013-14 2014-15 --Industry Avg -Torrent Pharma Higher than Industry avg EBIDTA Margins • Driven by Brands, Niche products, Field Force productivity Margin Expansion further to be driven by • Elder Acquired portfolio, USA Focus#10torrent PHARMA Future Outlook The factors for sustainability ×#11The Priorities Branded Generics Generics Complex generics Highest Quality standards NDDS & First Specialty focus time launches Strengths in Multiple channels Business Development FF Productivity India: Acute portfolio driving growth Priority markets - 1. India, 2. USA, 3. Other markets BG & Europe GG#12India: Acute as the new growth driver torrent PHARMA India: Chronic therapy as Growth Driver Other BG: De- Centralized Strategy Other BG: Harmonization & Centralized Strategy (Glocal approach) The Priorities Key BG Markets ×#13Branded Generics Markets - Long term sustainability What is the likelihood of the market escaping price intervention by payers? Assessed through: Limited pressure to reduce healthcare spend Strong desire to support local pharma companies High Higher long-term sustainability Germany France Low Low Brazil India Mexico Russia Algeria Saudi Arabia Romania Turkey Poland South Africa Czech Republic Hungary How strong is the preference for brands? Assessed through: ■ Intrinsic local preference for brands Patients' willingness to pay price premium Lack of confidence in ability of regulatory system to safeguard drug quality Unlocking Pharma growth - Mckinsey High ×#14India Business 2,50,000 IPM & TORRENT 16% 18% 16% 1974 14% • Focus on brand building and productivity improvement to continue. (8 brands 100 crs by 18-19, currently 2 brands) Rationalization :: Field Force (500 over 3 years) • • Portfolio realignment to bring in better Synergies 2,00,000 13% 13% 1698 12% 1,50,000 10% 2018-19 Brand Value Estimate 350 8% 86,410 300 1,00,000 300 76,542 6% 250 195 200 4% 50,000 28,83532,678 150 2% 100 IPM (Rs. Cr) CVM (Rs. Cr) TORRENT (Rs. Cr) Mar-14 Mar-15 IPM-Indian Pharma market, CVM - Covered market 50 0% 0 Shelcal Nexpro 120 115 110 110 105 100 Chymoral Deplatt Nikoran Nebicard Rozucor Azulix Torrent to enter top 10 cos. In IPM with this brand building approach#15Granularity of Growth - India Business Company CAGR% (3Y) (2013/14/15) 10 IPM MACLEODS 19 GLENMARK 17 USV 16 SUN 16 TORRENT 16 INTAS 16 LUPIN 14 ALKEM 14 CIPLA 11 DRL 9 ZYDUS 8 Key Performance Parameters (Last 3 years) Highest PCPM growth in IPM top 20 : 24% (rationalized 848 cumulative last 3 years) Among the lowest top 2 cos. On quarterly Standard deviation in Growths reflective of consistency Highest among Top 20 IPM Cos. For 10 Cr+ brands increase in contribution (20% Increase) in line with 2012-2017 5 year plan Half of Industry average in Bonus to sales ratio (Industry avg - 3.7%, Torrent - 1.9%) Among fastest growing company in Q1 as per AIOCD/IMS/CMARC/SMSRC *Mar Dataset - Without Elder portfolio#16Branded Generics Market - Harmonizing with the GLOCAL Approach Initiatives for 2015-16 • Harmonization of Marketing practices Harmonization Product pipeline • NDDS innovation & Investments Brand building Key Priorities in Other BG Markets - Brazil Philippines Launch prioritization for Other BG Markets Brands, Communication Strategy Launch Other BG Markets Priority CNS 1 or 2 CVD 1 or 2 Gastro 3 or 4 Derma 3 or 4 Out- licensing • Marketing model • Specialty focus • NI Pipeline •Lead/Build Brand model across all BG Markets - • Uniform Approach guided by Global Marketing team Execution at Local level in Line with global brand identity Emerging Markets NDDS India#17Brazil & Other Key BG Markets BRAZIL - Streamlining for growth Portfolio Re-alignments - BRAZIL TPL Key BG markets Higher Specialty focus & Investments • 2 Teams aligned as per Specialty Strategy Shapes structure • Dedicated teams for CNS & CND BG Market India Brazil Philippines Sri Lanka Malaysia Russia Romania Cost efficiencies in NI & Field Force Deployment • 100 FF rationalisation in process Consolidation - Other BG markets Sharper Focus Mexico By Exiting from 20 countries from current 40+ countries presence Scaling up investments through new therapies & Portfolio in promising markets#18torrent PHARMA US: Oral Solids US: Complex Products, Onco Europe: OTC Europe: Specialty Generics ×#19The opportunities - USA Upcoming LOE opportunities will be dominated by differentiated generics products Estimated worldwide sales of all products losing US patent protection in the year before patent expiry USD billions 59 59 41 37 37 36 36 33 29 6 55 20 22 15 20 26 Differentiated generics ■ Biologics ■ 22 Inhalers, intranasals Injectables ■ Transdermals ■ Others 27 22 19 - Orals 16 14 15 11 10 2011 12 13 14 15 16 17 18 2019 46 68 47 60 57 36 44 43 51 Number of products Pipeline being augmented with - Intranasal, Derma ointments/creams, Injectables & Specialty Oral Solids (Oncology) Mckinsey LOE - Loss of Exclusivity#20USA - Moving up the value chain.... Strengthening Presence with customers & operational improvements Growth drivers – pipeline size and diversification Growth drivers - Business Development Among top 3 players in 14 molecules 11 products with sales > 5 million USD in 15-16 Increasing # of projects - 53 ANDA approvals + 19 pending + 44 Products under development. Adding 18-20 products per year (earlier 10-12 per year) Augment pipeline with external partners Strengths in multiple channels with anchor customers Improve operational excellence internalize warehousing Increase presence in New segments - Dermatology, Oncology & Ophthalmology. Complex Generics First to file projects M&A#21Europe Germany Rest of Europe Standing • 74% of the generic market into tenders • Torrent Generic Market Coverage 62% • Market share in Tender business: 6.2% •Ranked 6th amongst generic companies •20% CAGR (last 5 years) Growth Drivers •Untapped High volume products in tenders - will be supported by Dahej capacity • OTC • Portfolio augmentation with entry into new segments Till 2015 Licensing Business • Forge partnerships with regional companies in north and south Europe . UK 15+ product launches in 2015-16; 40 products to be launched over the next 4 years • Move business to larger accounts - retail chains & large wholesalers Next 3 years Built good base in difficult to enter markets Portfolio diversification in non-infringing products, OTC, high-volume tender market#22torrent PHARMA R & D / Manufacturing ×#23• • • R&D - Preparing for the future Consistently higher spend in the years ahead • Spend at over 6% planned India Business • 180 products added for next 5 years (Last 3 years: 30) 100 NDDS & First time launches stepped up International Operations • 64 New projects (LY 45) • New projects in Oncology, Dermatology, Ophthalmology, Injectables Manpower Increase of 400+ Scientists Number of Projects for International markets New Projects ■Total running Projects 74 63 96 49 105 14 45 124 64 174 2011-12 2012-13 2013-14 2014-15 2015-16 Manpower • Addition of around 400 scientists Increase in specialty & complex projects • Oncology (solid orals) • Dermatology • Ophthalmics • FTFs • NDDS for Brazil & BG Markets . • Orphan Drugs#24R&D Spend - Going up to 6 to 8% in the years ahead R&D% spend 7.00% 6.00% 4.49% 4.26% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2012-13 6.00% 4.80% 2013-14 2014-15 2015-16 Higher R&D spend • In line with industry standards from 2015-16 Improved Output . Higher number of projects per year • Global development • Inhouse capabilities development#25Manufacturing & Supply Sources . • Audits • US FDA audit completed successfully at Indrad & Dahej plant in April 2015 Additional Capacity & Capex . . . Dahej Commercial Mfg from Dec 2015 New expansion Sikkim Additional capacity coming up Manufacturing plant for Oncology products -Oral solids, injectables and API#26torrent PHARMA Thank You 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.