Torrent Pharmaceuticals Ltd. share price target

Visible Growth in Revenues and MarginsTorrent Pharma s woes in various markets appears to be receding and is all set to show double digit topline growth in key markets which will give impetus to increase in margins.

Torrent Pharmaceuticals Limited (TRP) engages in the research, development, manufacturing and marketing of generic pharmaceutical formulations in India, the US, Germany, Brazil and internationally. The...

Downside risks: delay in resolution of Dahej (OAI) and Indrad (WL), slower growth in India and launch delays in the US. We resume coverage on Torrent Pharma (TRP) with a Buy. Torrent has re-rated substantially in the past three years on the back of strong execution particularly in branded markets. Despite rich valuation, we recommend Buy as TRP offers a solid India franchise, robust earnings growth and superior return profile which justifies the premium over peers. TRP would generate Rs56bn of FCF over FY19-22E. Our TP of Rs 2,250 is based on 15x FY22 EV/EBIDTA implying a target PE of 28x.

India growth steady; acquisitions to enhance coverage Domestic branded formulations including CRAMs constitute 48% of sales. The acquisition of Elder Pharma's branded portfolio has added new therapies like neutraceuticals, gynaecology and helped fill up portfolio gaps. The Unichem acquisition has added branded portfolio comprising some power brands besides achievement of long term synergy benefits. We...

27 January 2020 Torrent Pharma (TRP) has exhibited a robust 23% CAGR (FY14-19) in domestic formulation (DF) sales, executing well both organically and inorganically. However, this benefit is getting offset to some extent by the ongoing regulatory issues at its Dahej/Indrad sites for the US generics business. We maintain our EPS estimate for FY20/21/22 to factor in better operating leverage in DF and increased market share in US generics. Maintain Neutral given the limited upside from current levels. India business (INR8.7b) grew by a moderate 4.3% (partly due to a high base of past year). Adjusting for one-offs due to the integration of TRP and Unichems stockists, India business growth stands at 8.5% YoY. Brazil business was up 12.5% YoY at INR1.9b. US business was down 22% YoY to INR3.

India growth steady; acquisitions to enhance coverage Domestic branded formulations including CRAMs constitute 48% of sales. The acquisition of Elder Pharma's branded portfolio has added new therapies like neutraceuticals, gynaecology and helped fill up portfolio gaps. The Unichem acquisition has added branded portfolio comprising some power brands besides achievement of long term synergy benefits. We...

Torrent Pharmaceuticals (TRP) has delivered an in-line 2QFY20 performance in sales and EBITDA terms. Sales grew by 6% YoY to Rs 20.0bn. Domestic business grew by 10% YoY. Adjusted for base impact of discontinuation of certain products (2% negative impact) and change in sales cut-off recognition (1% negative impact), domestic revenue grew 13% YoY vs our estimate of 12%. US sales declined by 3% YoY to US$54mn (in-line) due to lack of new launches. Brazil revenue rose 6% YoY to Rs1.6bn, Germany was flat YoY at Rs2.5bn and RoW grew by 18% YoY to Rs2.0bn. Gross margins rose 210bps YoY to 73.2%, which led to EBITDA margin improvement of 200bps YoY to 27% against our estimates of 26.5% aided further by better product mix. EBITDA...

by India (+10% YoY to INR9b) and Brazil (+7% YoY at INR1.6b) businesses. However, the performance in the US (-3% YoY to INR3.8b) and Germany (-1% YoY to INR2.5b) was weak. 23 October 2019 (GM) expanded 200bp YoY to 73% due to a superior product mix. EBITDA better GM and reduced R&D; expense (6.5% of sales v/s 7.2% in 2QFY19). Accordingly, EBITDA grew 14% YoY to INR5.4b. PBT grew at a higher rate of 44% YoY to INR3b due to lower interest outgo and higher other income. PAT and a lower tax rate. For 1HFY20, sales/EBITDA/PAT grew 7%/14%/35% YoY to INR40b/INR10.8b/INR4.

Torrent Pharmaceuticals Limited (Torrent Pharma) reported a strong set of numbers for Q2FY2020. Sales at Rs. 2,005 crore grew by 6% y-o-y and are marginally below estimates. Operating profit at Rs. 541 crore grew by 14% y-o-y and is broadly in line with estimates. Operating margin expanded by 200 BPS to 27%. PAT at Rs. 244 crore beat our estimates of Rs. 209.5 crore because of lower than expected tax. During the quarter, performance across geographies was subdued. Recently, Torrent's Indrad plant has received a warning...

Torrent Pharmaceuticals Limited (TRP) engages in the research, development, manufacturing and marketing of generic pharmaceutical formulations in India, the US, Germany, Brazil and internationally. The...