ICICI Direct is bullish on Torrent Pharmaceuticals has recommended buy rating on the stock with a target price of Rs 1940 in its research report dated May 21, 2019.
ICICI Direct's research report on Torrent Pharmaceuticals
Revenues grew 7.8% YoY to Rs 1856 crore (I-direct estimate: Rs 1971 crore) due to decent growth in India, US. India grew 8.8% YoY to Rs 754 crore (I-direct estimate: Rs 797 crore). US business grew 21.2% YoY to Rs 372
crore (I-direct estimate: Rs 376 crore). EBITDA margins improved 435 bps YoY to 25.5% YoY (I-direct estimate: 24%) mainly due to a sharp fall in other expenditure. EBITDA grew 29.9% YoY to Rs 473 crore, in line with I-
direct estimate. Adjusted net profit (excluding exceptional item of Rs 357 crore) fell 8% YoY to Rs 209.8 (I-direct estimate: Rs 149 crore). Delta vis-à-vis EBITDA was low base tax outgo (Rs 2 crore in Q4FY19 vs. -Rs 94 crore
in Q4FY18).
Outlook
The company’s portfolio is finely balanced between India, Brazil, Germany and the US with Indian being the leader. With consistent FCF generation and moderation in core capex, we expect leverage situation to
improve substantially. We arrive at our target price of Rs 1940 (25x of FY21E EPS of Rs 77.6).
For all recommendations report, click here
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