25^th Consecutive Quarter of Record Sales, 15^th Consecutive Quarter of Record Net Income

Highlights

• Q1 2002 Sales Increased to $44.5 million, a 57% Gain Over Q1 2001
• Q1 2002 Net Income Increased to $9.9 million, or $0.34 per Share,
  a 256% Increase Over Q1 2001
• Taro’s Warfarin Tablets Approved in the UK in January
• Taro’s Ketoderm™ (Ketoconazole Cream 2%) Approved in Canada in April

Hawthorne, New York, April 25, 2002 - Taro Pharmaceutical Industries Ltd. (NASDAQ/NMS: TARO) today reported record sales and earnings for the Company’s first quarter ended March 31, 2002.

Financial Results
The first quarter results represent Taro’s 25^th consecutive quarter of record sales and 15^th consecutive quarter of record net income.

The strong improvement in earnings per share comes despite an increase in diluted weighted average shares to 29,421,941 in the first quarter of 2002, from 24,903,068 diluted weighted average shares in the year-ago quarter, resulting primarily from a public offering of 5,750,000 shares in October 2001.

Selling, general and administrative expenses for the first quarter of 2002 were $11,745,000, or 26% of sales, compared with $8,818,000, or 31% of sales, in the first quarter of 2001. Operating income before R&D expenses increased to $17,095,000, or 38% of sales, up from $8,205,000, or 29% of sales, for the first quarter of 2001. R&D expenses for the first quarter of 2002 increased to $5,351,000, or 12% of sales, compared with $4,014,000, or 14% of sales, for the first quarter of 2001.

Operating income increased 180% to $11,744,000 in the first quarter of 2002 from $4,191,000 in the year-ago quarter. Taro’s gross profit in the first quarter of 2002 increased 69% to $28,840,000, or 65% of sales, from $17,023,000, or 60% of sales, for the first quarter of 2001.

Strong Financial Position
At March 31, 2002, total assets were $316,635,000, compared with $307,762,000 at December 31, 2001. Cash and cash equivalents were $143,734,000, compared with $150,732,000 at the end of 2001. Total liabilities were $87,493,000, compared with $88,622,000 at the end of 2001. Shareholders’ equity was $228,310,000, compared with $218,364,000 at the end of 2001.

Current assets at March 31, 2002 were $235,302,000, compared with $231,494,000 at December 31, 2001. Current liabilities at March 31, 2002 were $32,375,000, compared with $34,783,000 at year-end 2001.

"We believe that Taro’s financial performance results from the investments we have made in research," said Barrie Levitt, M.D., Chairman of the Company. "Continued increases in both sales and earnings reflect growing acceptance of our products in the marketplace."

Market Conditions
Generic Lotrisone® Cream
Competition is a common occurrence during the lifecycle of generic products. Taro has encountered competition on its products in the past and has effectively dealt with the entry of new generics into the marketplace.Since the approval for Taro’s Clotrimazole and Betamethasone Dipropionate Cream ("CB Cream"), bioequivalent to Schering Plough’s Lotrisone® Cream, in May 2001, Taro has anticipated and subsequently encountered generic competition.As a responsible competitor in the generic pharmaceutical market, any action Taro may take regarding CB Cream will be designed to preserve the value of our products while protecting our market position and the integrity of our customer relationships.

Regulatory Inspections and Approvals
Taro has a record of successful inspections by the U.S. Food and Drug Administration ("FDA"). The most recent FDA inspections of the Company’s facilities in both Israel and Canada resulted in no findings of non-compliance, and no Form FD-483 was issued for either facility.In the first quarter of 2002, Taro, having been approved by the United Kingdom Medicines Control Agency as a manufacturing site, received approval in the UK for Warfarin Tablets in the four strengths currently used in that country.

Soon after the end of the first quarter, Taro received approval in Canada for Ketoderm™, its brand of Ketoconazole Cream 2%. Ketoderm™, bioequivalent to McNeil Consumer Products’ Nizoral® Cream, is a prescription topical antifungal medication.

Taro has submitted three Abbreviated New Drug Applications ("ANDAs") during the first quarter of 2002, with additional filings expected in the coming months, and currently has 15 filings with the FDA. The Company believes that the approval process for products Taro has filed at the FDA is proceeding satisfactorily.

Because of the Company’s track record with the FDA, Taro believes that the current situation in the Middle East has not affected the FDA approval process for its products. Moreover, Taro has operated its manufacturing facilities in Israel without interruption since 1950. In the face of changing conditions in the Middle East, during the past 52 years, Taro has maintained continuous supply to its customers in a timely manner.

Proprietary Research
Taro is actively continuing its development of NonSpilÔ products using its patented, spill-resistant liquid drug delivery system. The delivery system’s spill-resistant formula will allow increased accuracy, reliability and ease in administering medicines to children and the elderly, and provide an alternative for patients who may have difficulty swallowing tablets or capsules. The Company holds several patents relating to this unique delivery system and has additional patents pending in the U.S. and worldwide. There can be no assurance that NonSpil™ products will be commercially successful.

Taro also continues development of T2000, the first of its novel class of non-sedating barbiturates. The Company is nearing the end of Phase I clinical testing for the product. While there can be no assurances of successful development or commercialization of any member of this new class of barbiturates, T2000 has not produced significant toxicity in humans in the testing conducted to date.

Outlook
"Taro is in a stronger position for long-term growth than at any time in our history. As in the past, the pace of Taro’s growth will depend upon the rate of new product introductions. We have the people, products, pipeline and financial resources to continue our record of growth and profitability in the pharmaceutical marketplace," Dr. Levitt concluded.

Conference Call
The Company will conduct a conference call to discuss first quarter results on Thursday, April 25, 2002 at 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time). The call will be available live via the Internet by accessing www.taro.com. For those who cannot listen to the live broadcast, an online replay will be available through May 2, 2002 on www.taro.com. A telephone replay will also be available through May 2, 2002 by dialing 800-428-6051 (domestic U.S.) or +973-709-2089 (international) and entering the passcode 238774 when prompted.

Taro is a multinational, science-based pharmaceutical company dedicated to meeting the needs of its customers through the discovery, development, manufacturing and marketing of the highest quality healthcare products.

Certain statements in this release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements that are not describing historical facts, such as descriptions or comments describing what the company or its officers "believe," "expect," "anticipate," or similar statements; comments concerning Taro’s expectations regarding profitability and growth; FDA filings, approvals, and inspections in Israel and Canada; the pricing and market size of generic Lotrisone® Cream; market acceptance of Taro’s products; operations in Israel; and contribution of new products. Although Taro believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors that could cause actual results to differ include industry and market conditions, slower than anticipated regulatory approval of new generic products, other regulatory actions, slower than anticipated penetration of new markets, changes in the Company’s financial position, the situation in the Middle East and other risks detailed from time to time in the Company’s SEC reports, including its Prospectus dated October 1, 2001.