Torrent Pharmaceuticals Ltd. share price target

ff India Biz (40% of Sales): TRP's domestic business grew by 16.5% YoY, which adjusted for Unichem acquisition and GST roll-out related changes, grew by 13% YoY. During 3QFY18, TRP booked Unichem sales from 14th to 31st Dec-17, as part of its domestic business. As per management, sales growth of the acquired business is still slow due to integration with TRP. Further, despite re-stocking post GST roll-out, inventory is yet to match pre-GST level (14 days vs. 21 days). Led by Unichem acquisition, product overlap stood at ~70% while doctor overlap at ~90%. TRP expects any cost synergies driven by the overlaps to be limited due to higher rural penetration of Unichem's products (70% vs. 30% of TRP). The Management...

ICICI Securities Ltd | Retail Equity Research Revenues grew 2.4% YoY at | 1477 crore (I-direct estimate: | 1598 crore). Domestic business grew 17% YoY to | 586 crore (I-direct estimate: | 622 crore), while US business decline 14% YoY to | 266 crore (I-direct estimate: | 249 crore) EBITDA margins improved 241 bps YoY to 24.3% YoY (I-direct estimate: 23.0%) mainly due to 561 bps improvement in gross margins to 73.5% (I-direct estimate: 69.0%)...

Q3FY18 revenues were up 2.4% YoY lower than our forecast by 8.8%. EBITDA margin of 24.3% were above our estimates, mainly due to strong gross margins (73.5% in Q3FY18 Vs 70.7% in Q2FY18) and continuing reduction in the salary overheads. However, PAT was down 74.7% YoY at Rs580mn a miss from our...

Maintain BUY with a revised TP of Rs 1,660 (22x Dec-19E EPS). Torrent Pharma (TRP) reported good numbers in 3QFY18, with the top-line coming in at Rs 14.8bn, up 2% YoY. This was largely in-line with estimates, as the domestic business continues to drive growth (+17% YoY). The US business picked up slightly, growing 4% QoQ. EBITDA came in at Rs 3.6bn, up 14% YoY, a margin of 23.4%.

Margins expand; Improvement in US business remains key TRP reported sales of INR14.3b (+4.5% YoY; ~5% miss) in 3QFY18. The miss on revenue can be attributed to a decline in the US and Brazilian businesses. India business grew 22% YoY to INR6.1b (~23% growth adj. for GST). EBITDA increased 14% YoY to INR3.53b (est. of INR3.62b). Margin expanded ~195bp YoY (+130bp QoQ), primarily due to a favorable product mix toward higher-margin branded products. PAT declined 72% YoY to INR580m, mainly due to a one-time impact of the Unichem acquisition and the re-measurement of deferred tax on account...

Upward estimates for FY19 and rating to ACCUMULATE We expect the Unichem dheal to take a closure by 31/12/2017, hence expecting some pain on the BS for FY18E with increased Debt and reduced Cash, however, with synergies with the deal and traction in the other regions and higher number of launches in the US would provide impetus to the valuation. We expect sales to grow...

ICICI Securities Ltd | Retail Equity Research Revenues came in flat YoY at | 1429 crore, below I-direct estimate of | 1542 crore mainly due to 21% YoY decline in the US to | 255 crore (I-direct estimate: | 281 crore) and 24% YoY decline in Brazil to | 120 crore (I-direct estimate: | 188 crore). Domestic business, on the other hand, grew 22% YoY to | 607 crore (I-direct estimate: | 546 crore) EBITDA margins were flat at 23% YoY (I-direct estimate: 21.0%). EBITDA remained flat YoY at | 329 crore...

Owing to the enhanced business mix, which will ensure the sustainability of future cash flows, we have increased our assigned earnings multiple from 20x to 22x, and maintain BUY with a TP of Rs 1,480 (22x Sep-19E). After the acquisition of Unichem Labs (UL) domestic portfolio, Torrent Pharma (TRP) will become the fifth largest player in the Rs 1.14tn Indian Pharma market (IMS data). Closed at a value of Rs 36bn, this deal will (1) Further strengthen TRPs position in CVS, CNS and GI categories owing to a complementary sub-therapy presence, (2) Add ~3,000 employees (including MRs) and provide access to an additional 2,100 stockists pan-India, (3) Give TRP an entry into the Indian OTC market, with the growing Unienzyme brand of UL.

Big leap- to become top-5 player: Torrent has entered into a definitive agreement with Unichem to acquire its branded business of India and Nepal for INR36b on slump sale basis (transaction closure expected by 2017 end). Through this acquisition, Torrent will acquire >120 brands in India and Nepal and manufacturing plant at Sikkim. Building leadership position through strings of acquisitions: This is the fifth acquisition in India by Torrent pharma in last 4 years (Brands from Elder and Novartis, manufacturing plants from Zyg Pharma and Glochem). According to...

Maintain BUY with a TP of Rs 1,450 (20x Jun-19E). Despite a 9% decline in the India business, sequentially flat sales in the US and strong rupee appreciation during the last quarter, Torrent Pharma (TRP) reported 100bps QoQ improvement in EBITDA margin (21.6%) and 500bps higher gross margin, leading to a PAT of Rs 1.8bn (57% beat on our earnings estimates). Management has attributed this to the improved product mix in the US and Brazil markets, and price hikes in the India business.